In a recently published advisory report, the Advisory Division of the Council of State of the Kingdom cast a critical light on the proposal for the new kingdom law (rijkswet) that is intended to regulate financial supervision and the refinancing of loans for Aruba. The highest advisory body of the Kingdom is sounding the alarm on two cardinal points: the threat to Aruba’s autonomy and the structural lack of transparency in the financial agreements with the Netherlands.
In its advice, the Council of State reminds both governments that the constitutional foundation of the Kingdom is based on the autonomy of the countries. Therefore, the limitations imposed by this new law must remain fair and structurally delimited.
Stop Obstructing Aruba’s Autonomy
Currently, drafting and approving national laws (landsverordeningen) is an exclusive right and task executed jointly by the Government and Parliament (Staten) of Aruba. The new kingdom law introduces restrictions on this freedom, something that must be approached with great caution.
The Council of State emphasizes that the Kingdom Government (Koninkrijksregering) must adopt a highly restrained (terughoudend) stance when limiting a country’s autonomy. The limitations may not be greater than what is strictly necessary to comply with the agreements made.
For this reason, the advice stipulates that the requirement where Aruba must seek approval from the Council of Ministers of the Kingdom (Rijksministerraad) from the Netherlands must be limited solely to defining the figures (kwantificering van de normen) regarding the debt quota (schuldquote) and the primary balance. The Netherlands must not be given a blank check to sit in the seat of Aruba’s legislator for other matters. However, opening a window for the Netherlands to enter—what does this mean for the future?
Financial Uncertainty: Which Loans Will the Netherlands Refinance?
The second point of criticism addresses the refinancing of Aruba’s foreign loans. Although the proposal speaks of an obligation for the Netherlands to refinance “a part of” (een deel van) the expiring loans, the text itself lacks clarity in its explanation.
According to the Council of State, this lack of transparency is detrimental to both sides:
Aruba remains in the dark and does not know exactly what it can legally expect from the Netherlands.
The Netherlands itself lacks insight into what the exact financial consequences of this law will be for its own budget.
Direct Recommendation to Amend Article 38
The Advisory Division formally advises clarifying the explanation of the law better and, if necessary, changing the content of Article 38. The body demands that the legal texts clearly stipulate which specific foreign loans are eligible for refinancing.
With this advice in hand, the vote is structurally in the court of the ministers to come up with a much more transparent text before it moves on to structural processing.
