Budgets can be adapted, but must remain balanced

THE HAGUE--Curaçao and St. Maarten are free to make as many changes to their budgets as they wish after these have been approved by the Committee for Financial Supervision CFT, as long as they remain balanced, Dutch Minister of Home Affairs and Kingdom Relations Piet Hein Donner says.

Responding to questions by the Second Chamber in relation to the 2011 Kingdom Relations budget, Donner explained that CFT reviewed the budgets of Curaçao and St. Maarten in accordance with the Kingdom Consensus Law on Financial Supervision and the norms stated in this law.

"The law states Curaçao and St. Maarten need to have balanced budgets," he said. "The first question in case a part of the budget is not being executed is whether this affects the balance of the budget. If this is not the case, the governments are free to do so. If this leads to loss of revenue or higher expenditures, the governments are free to take compensating measures elsewhere in the budget."

CFT can only report to the Kingdom Council of Ministers if the actions in executing the budget lead to a deficit. CFT can submit this report together with a motivating advice to have the Kingdom Council of Ministers issue an instruction. The latter can then decide to issue an instruction to the government in question via a Kingdom Decree, Donner explained.

Answering the question by Parliament how long the CFT will remain in place, the Minister said an evaluation committee would render advice to the Kingdom Council of Ministers five years after the Kingdom Law went into effect, which was October 2010. The Kingdom Council of Ministers will take a decision at that time whether financial supervision can be lifted for one or both countries.

If the Council determines that financial supervision needs to remain in place, financial supervision will be prolonged by three years each time until the Council decides to lift the measure.

Donner made clear that The Hague wasn't planning on paying the debts of other (Kingdom) countries ever again. "It is important in the new constitutional structure that the countries get their finances in order and keep it that way. Debt reorganisation doesn't fit in this framework and this has been a one-time intervention," Donner stated.

15 November 2010

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