THE HAGUE - In a recent communication to the Dutch Parliament, State Secretary Alexandra van Huffelen shed light on the critical issues surrounding ENNIA, emphasizing its implications for both society and finances. The situation at ENNIA, a major insurance company, is deemed a potential risk to the countries' budgets and is viewed as systemically relevant. The prospect of an uncontrolled bankruptcy raises concerns about the stability of the local financial sector, impacting approximately 30,000 policyholders in Curaçao and Sint Maarten.
The Netherlands has linked an agreement on ENNIA's solution as a prerequisite for offering the lowest interest rate on refinancing. The absence of a viable solution introduces uncertainty into the development of government finances, jeopardizing the ability of the countries, along with the Netherlands, to fulfill repayment obligations.
In the summer of 2023, initial discussions between Curaçao, Sint Maarten, and the Central Bank of Curaçao and Sint Maarten (CBCS) hinted at a potential restart for ENNIA. The Netherlands expressed its willingness to extend loans for this purpose, with the loan required for Curaçao posing a substantial challenge due to potential conflicts with the interest burden norm outlined in the Kingdom Act on Financial Supervision.
Despite exploring various solution options during negotiations, none were acceptable to Curaçao, leading to the country withdrawing from the proposed solution at the last moment. Consequently, no agreement on a solution was reached at the time of refinancing, as communicated to the Dutch Parliament.
Subsequent discussions among Curaçao, Sint Maarten, SXM, and CBCS persisted, resulting in a new draft agreement on December 15. This draft is currently under evaluation by Dutch experts from the Ministry of Finance and the Dutch Central Bank, with a focus on ensuring the solution's financial solidity and sustainability.
The updated solution involves a combination of restarting ENNIA and settling its affairs. Key considerations during the evaluation include providing certainty for policyholders and ensuring affordability for the national budgets. The assessment remains ongoing due to incomplete information received.
An initial expert meeting between the parties involved in the agreement and Dutch experts is scheduled for February 6. Upon a positive assessment and the agreement's endorsement by all parties, new loan agreements for Curaçao and Sint Maarten can be finalized at the prevailing interest rate, albeit with a slight margin.
The overarching goal remains securing long-term refinancing at a favorable interest rate aligned with the financial capacity of the countries. Further updates on this matter will be communicated to the Dutch Parliament through official channels.