THE HAGUE – The government of Curaçao has intentionally steered the country into a situation where it will not be able to repay the 140 million guilder loan from the Netherlands that matures later this year.
According to the Board for Financial Supervision (Cft), “Curaçao’s liquidity position allowed for repayment for a long time. The country consistently included the repayment in its annual budget, but ultimately opted to pursue refinancing instead.”
The Pisas administration’s conscious decision is evident, says the Cft, from the fact that the loan repayment was structurally included in the annual budgets, as advised by the board. “Since 2022, the Cft has consistently warned Curaçao’s government about the maturing bond loan and its repayment obligation in 2025. This was reflected in our advice on the 2022 approved budget, the draft budget for 2023, and subsequent years,” the board added.
A similar situation has developed in Sint Maarten, which has also indicated it cannot repay its 73.5 million guilder loan due in October. The Cft has also repeatedly reminded Sint Maarten of its obligation to repay and highlighted the lack of multi-year liquidity projections in its budgets, which made it difficult to assess the country’s repayment capacity.
Both Curaçao and Sint Maarten submitted requests earlier this year to the Dutch government to refinance the loans. However, State Secretary for Kingdom Relations Zsolt Szabó was not initially convinced of the necessity and requested further advice from the Cft. In late April, the Cft concluded that refinancing is “unavoidable.” Szabó has yet to make a formal decision, the Ministry of the Interior confirmed.
Looking ahead, larger loan maturities are on the horizon. For Curaçao, bond loans totaling 1.427 billion guilders are set to mature in 2030, 2035, and 2040. For Sint Maarten, the total is 178.6 million guilders. To prevent another last-minute refinancing, the Cft has urged both governments and the State Secretary to conduct an integrated analysis of the total loan portfolio and its repayment schedule.
“This will allow for realistic agreements that contribute to structurally sound public finances and a sustainable debt level,” the board stated.
Any decision to refinance the loans must receive not only approval from the Council of Ministers, but also the endorsement of both the Dutch House of Representatives and the Senate.
