‘Credit freeze far too heavy’

WILLEMSTAD--A financial expert has told Radio Netherlands that the step taken by the Central Bank of Curaçao and St. Maarten (CBCS) to improve the balance of payments and protect the Antillean guilder is "way too heavy-handed" and will unavoidably lead to economic decline. Curaçao's Finance Minister George "Jorge" Jamaloodin (MFK), who does not agree with the six-month credit freeze either, announced he is working on his own plan to address the problem with the foreign exchange reserve.

After inquiries by The Daily Herald, the St. Maarten Bankers' Association stated it was "currently seeking further clarification from the Central Bank and is unable to comment any further at this time."

The expert in Curaçao Willem-Jan Paardekooper likened it to using a machine gun to kill a fly. He said it's always better to ask the banks to give less credit than to impose a ceiling.

"In China the economic growth went down from 10 to 7 per cent when a similar measure was taken. Our growth is calculated at 0.3 per cent; this is going to hurt.

"Especially the middle class and the small man will feel it, spreading out payments is excluded for the next six months. Even a small credit pending one's salary will no longer be possible, nor will car loans," the analyst continued.

He fears more people will revert to doing business with financial institutions other than banks. "Their monthly interest is as high as that of banks over a whole year; this is going to distort the economy."

Paardekooper does agree with CBCS-director Emsley Tromp that government needs to once-and-for-all seriously tackle the collection of taxes, "but you only see the effect of that on a longer term."

Jamaloodin meanwhile said he is working on a structural solution for the balance of payments and has started meetings with stakeholders. "The Central Bank is in charge of monetary affairs, but government carries responsibility for the financial-economic policy," he added.

A press release by CBCS did state that "loan commitments already made by banks to their clients and loans for projects that strengthen the economies of Curaçao and St. Maarten will be exempted from this measure."

"Moreover, the measure is not applicable on credit extension by secondary financial institutions (e.g. mortgage banks, development banks and credit unions), pension funds and insurance companies. Therefore, credit will still be available but to an extent that is consistent with maintaining the stability of our guilder."

Source: http://www.thedailyherald.com/islands/1-islands-news/26562-credit-freeze-far-too-heavy-.html

Russell Brand Mervyn King Oscars Niclas Alexandersson Mark Bright Robert Schumann