Aruba receives second tranche liquidity support

THE HAGUE--The Kingdom Council of Ministers last Friday approved a second tranche of liquidity support for the country Aruba. It concerns a soft loan for the amount of Aruban florins Afl. 49.5 million (US $28 million) with which entrepreneurs can pay 80 per cent of their employees’ salaries.
Aruba Prime Minister Evelyn Wever-Croes, Finance Minister Xiomara Maduro and Minister of Social Affairs Glenbert Croes announced the Kingdom government’s decision at a press conference in Oranjestad on Friday. There was no word from Dutch State Secretary of Home Affairs and Kingdom Relations Raymond Knops, but his ministry confirmed the decision.
The Kingdom Council of Ministers on Friday, May 1, handled the request of the Aruba government for a second tranche of liquidity support. The Kingdom government had made the first tranche of Afl. 41.8 million ($23.3 million) available on April 9.
At the time, St. Maarten received NAf. 50.2 million ($28 million) and Curaçao NAf. 177 million ($99 million). This financial support was provided in zero-per-cent interest loans for two years. No request from Curaçao or St. Maarten was handled in the meeting of the Kingdom Council of Ministers on May 1. Both countries are still awaiting a decision on the second tranche of financial support from the Netherlands.
The Kingdom government has set conditions for the Dutch Caribbean countries to obtain loans from the Netherlands. One of these is the drastic cutting of government expenditures and a substantial pay-cut for elected representatives and directors of government-owned companies.
Aruba has recently approved a series of austerity measures that were secured in the amended 2020 budget last week. Ministers will hand in 20 per cent of their earnings from May 1 until at least the end of 2020, and Members of the Aruba Parliament 25 per cent. Directors of government-owned companies will also take a 20 per cent pay cut and a maximum norm will be set for their salaries.
Civil servants in Aruba and personnel of government-owned companies and subsidised foundations will see their salaries reduced by 12.6 per cent until the end of the year. Furthermore, government will drastically cut other expenditures, including travel, representation and advisors/consultants.
Prime Minister Wever-Croes expressed deep appreciation for the Netherlands’ gesture, and said the funding would assist the local government in providing wage subsidies to enable employers to pay 80 per cent of their employees’ salaries for the next three months. The jobs of some 37,000 persons in Aruba are at stake, mostly in the tourism sector.
The wage subsidy should contribute to the saving of jobs during the coronavirus crisis, explained Finance Minister Maduro. Government will assist employers to cover a maximum of 60 per cent of the salaries. Companies are expected to contribute 20 per cent. The employee covers the remaining 20 per cent through a reduction in working hours.
In the week of May 4 companies eligible for wage subsidy will receive an email from the Aruba Social Insurance Bank SVB with details on how to apply for this financial assistance. According to Minister Maduro, many situations of exploitation are being exposed in these harsh economic times, including the illegal employment of persons, moonlighting and companies that are not registered at the Tax Office or the SVB.
Besides the wage subsidy, the Aruba government has implemented several other measures to assist employers and employees, including tax alleviation for three months, the Social Emergency Assistance Fund FASE for unemployed persons and financial support for small and medium-size businesses.
The next Kingdom Council of Ministers meeting is slated for May 15, at which time the advice of the Committees for Financial Supervision CFTs (Curaçao and St. Maarten) and CAFT (Aruba) regarding further financial assistance will be handled.
The Daily Herald

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