VVD, CDA critical of COHO pull-back

VVD, CDA critical  of COHO pull-back

Members of the Second Chamber’s Permanent Committee for Kingdom Relations during Thursday debate. From left: Jorien Wuite, Roelien Kamminga, Joba van den Berg, Kauthar Bouchallikht. (Suzanne Koelega photo)

THE HAGUE--The liberal democratic VVD party and the Christian Democratic Party CDA in the Dutch Second Chamber of Parliament on Thursday voiced their concerns about the April 4 agreement of the four countries in the Kingdom to secure reforms in a Mutual Regulation.

On the request of Member of Parliament (MP) Roelien Kamminga (VVD), the Second Chamber’s Permanent Committee for Kingdom Relations had a debate with Dutch State Secretary for Kingdom Relations and Digitisation Alexandra van Huffelen about the Mutual Regulations that were signed with Aruba, Curaçao and St. Maarten and the progress of the reforms in the countries.

“It was a long trajectory and, unfortunately, the concerns that the VVD had beforehand are not gone. Because the supervision seems very thin, the enforceability remains unclear and the way in which we want to solve disputes can be called naïve. Unfortunately, the past of this dossier teaches us that trust is nice, but control is better,” said Kamminga.

Now that the Caribbean Body for Reform and Development COHO is off the table because of lack of support, the reforms will continue to be guided by the Temporary Work Organisation (TWO), an organisation linked to the Ministry of Home Affairs and Kingdom Relations BZK. “We can wait for parties to be opposing each other and endless yes-no discussions,” said Kamminga.

The VVD MP asked Van Huffelen whether the Mutual Regulations were binding, whether one party could unilaterally get out and what the consequence would be. “Would the loans have to be repaid immediately and would further financing be ceased? I would find that logical,” she said.

MP Joba van den Berg (CDA) shared Kamminga’s concerns. “Our concerns have only increased. The Kingdom Law COHO has been withdrawn and so there is no involvement of the parliaments, the legal agreements in the Mutual Regulations are soft as butter and there is still no clarity on financial supervision for Aruba,” she said.

Citing a number of worrisome data points about the three countries in relation to public finances, Van den Berg emphasised the need for reforms. “CDA wants perspective for the next generations and that is why real transformation is essential for the future of the islands. No pain without gain. Changes can hurt, but it is with the objective of increasing the overall well-being and to share it more equally,” she said.

Van den Berg asked Van Huffelen whether she agreed that an extension of the liquidity support loans the Dutch Caribbean countries received during the COVID-19 pandemic would not happen without adequate financial supervision.

Van den Berg wanted to know what sanctions would be implemented in the extension of the loans if the reform process faltered in the meantime, and whether a debt quota norm would be set as a condition.

Kamminga made clear that the VVD opposed refinancing the loans for Aruba without the country’s acceptance of securing financial supervision in the Financial Supervision Kingdom Law for Aruba, the RAFT. “The need for strict supervision has not gone away,” said Kamminga, who announced that she was considering a motion in this regard.

She said that ultimately, the progress of the reforms was the real goal. “There is a lot of poverty

in the countries and that needs to be tackled through structural reforms, investments and decent government, starting with the reduction of corruption, the proper collection of taxes and eliminating favours for friends and family.” She said that while there was progress in implementing the reforms, there were still many difficult measures that needed to be taken.

MP Jorien Wuite of the Democratic Party D66 said collaboration within the Kingdom was crucial to strengthen economic resilience and government capacity, but added that this should be based more on ownership, equivalence and togetherness. “D66 underscores these fundamental values.” The Mutual Regulations showed progress in the collaboration between the countries, she said.

Wuite asked Van Huffelen what lessons had been learned from the difficult process of the COHO and whether in the meantime there were examples of successful reforms in the countries as a result of the country packages.

MP Kauthar Bouchallikht of the green left party GroenLinks expressed her support for the Mutual Regulations. “We agree with the way in which they were set up,” she said. She emphasised that the countries were part of the Kingdom and that the relations should be based on equality.

According to Bouchallikht, the Netherlands should not impose too many conditions and should look more at its own historic faults like the slavery past. “Let’s talk about and work towards establishing good cooperation.”

Van Huffelen confirmed that the Mutual Regulations were binding. She explained that if a conflict arose, parties would try to solve it through a mediator. She said that she had learned from the COHO process that it was very important to have overall support when making an agreement.

Referring to the imposing of sanctions, Van Huffelen said that parties would have to confer if there was insufficient progress in implementing the reforms. If projects are not executed, there will be no subsidy, she said.

The reforms are not tied to the refinancing of the loans, but the countries need to have their finances in order and they will remain subject to financial supervision. The financial supervision for Curaçao and St. Maarten is already regulated in the Financial Supervision Kingdom Law RFT.

That is not the case for Aruba, and Aruba will have to concede to financial supervision being anchored in a Kingdom Law, she emphasised. “The RAFT is a prerequisite for the refinancing of the loans,” she said.

But because this law will prove difficult to realise before the loans lapse in October this year, there may have to be a transition period. In this transition period, Aruba will pay market-rate interest on the loans. This will serve as an incentive to accept the RAFT, because during the transition period, the repayment provisions will be more unattractive than with the RAFT in place, she explained.

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