PM: It is reasonable to reassess if the Monetary Union remains viable

GREAT BAY--Prime Minister Dr. Luc Mercelina has reaffirmed St. Maarten’s commitment to the Central Bank of Curaçao and St. Maarten (CBCS), while stressing that the future of the monetary union must always be guided by fairness, mutual respect, balanced representation, and the best interests of the people of St. Maarten.

At the same time, Prime Minister Mercelina acknowledged that the tension surrounding the functioning of the CBCS is not new. He noted that these strains have existed since the constitutional transition to country status and were present even before the introduction of the Caribbean Guilder. According to the Prime Minister, it is therefore reasonable to examine whether the current monetary union remains viable and whether it is realistic for two autonomous countries to continue sharing one monetary unit.

The Prime Minister’s remarks come against the backdrop of a statement issued Monday by the Government of Curaçao, which said the ongoing structural blockage in forming a well-functioning Supervisory Board for the CBCS, along with the resulting administrative and political deadlocks, has become a serious obstacle to the effective functioning of the central bank. Curaçao described the current situation as untenable and argued that, because it represents approximately 80 percent of the economic interest in the CBCS and carries the largest share of the supervised financial sector within the monetary union, it bears a special responsibility for the stability and proper functioning of the institution.

Curaçao further stated that the joint central bank arrangement between Curaçao and St. Maarten, established after the dissolution of the Netherlands Antilles, has proven to be an unsuccessful form of cooperation imposed within the Kingdom since 10-10-10. The statement was issued in response to recent reporting on discussions during the February 26 Meeting of Beneficiaries of the CBCS and to public comments made earlier this month by St. Maarten Minister of Finance Marinka Gumbs.

It is within that context that Prime Minister Mercelina emphasized a core principle: the Central Bank is not merely an institution serving two autonomous countries, but a mechanism grounded in shared economic interest, financial stability, and regional cooperation.

While St. Maarten remains committed to the partnership, the Prime Minister made clear that such commitment cannot be unconditional. He said it must always be anchored in fairness, mutual respect, and balanced representation. He added that there is nothing wrong with asking whether the current construction remains the best one for St. Maarten and cautioned against interpreting questions or statements about the CBCS as hostility at the level of the central bank itself.

The Curaçao government’s statement took direct aim at governance arrangements within the CBCS, particularly surrounding the issue of the chairmanship of the Supervisory Board. According to Curaçao, Minister Gumbs has since last year sought to have a representative from St. Maarten appointed as chairman of the Supervisory Board. Curaçao said such an appointment cannot be made unilaterally and depends first on a recommendation from the board itself, after which both governments may take a decision. Curaçao also disputed the suggestion that there had been a written agreement under a former Curaçao finance minister to transfer the chairmanship to St. Maarten, stating that no such written agreement exists.

Curaçao also said it does not consider it acceptable for St. Maarten, as the smaller shareholder with an approximate 20 percent interest in the CBCS, to hold the chairmanship while also appointing half of the supervisory directors. In Curaçao’s view, such an arrangement would run counter to its economic stake and create an imbalance in governance. The government further argued that St. Maarten is already overrepresented on the Supervisory Board because of its right to appoint half of the ordinary supervisory directors and because its consent is required for the appointment of a chairman.

Prime Minister Mercelina addressed that broader governance issue from St. Maarten’s perspective, stating that the structure of the Central Bank must reflect equity between both countries, not dominance by one. He warned that an 80/20 dynamic shareholding relationship, whether perceived or actual, must never determine governance outcomes within the institution.

He stressed that the integrity of the CBCS depends on shared decision-making and transparency, not disproportionate influence. In that context, St. Maarten will continue to advocate for a structure that ensures balanced oversight and accountability in the interest of both nations.

The Prime Minister also emphasized that conducting a national assessment of the monetary union and carefully considering future options is a normal process for any country focused on progress and the well-being of its people. His remarks make clear that St. Maarten’s position is not that legitimate questions should be avoided, but that they should be approached responsibly and without inflaming tensions unnecessarily.

Curaçao, for its part, said the current governance structure has repeatedly led to deadlocks between the two countries on board appointments. It noted that many board members have ultimately been appointed not by the governments themselves, but by the President of the Common Court of Justice in accordance with Article 10-10. At the same time, Curaçao stressed that the present dispute does not threaten the administrative structure of cooperation between the countries, nor does it undermine the stability of the Caribbean Guilder or the continuity and effectiveness of supervision carried out by the CBCS. Even so, Curaçao said the governance impasse remains a serious matter that requires attention and indicated that it will soon consult with Parliament on its position and possible next steps.

Turning to the Caribbean Guilder, Prime Minister Mercelina noted that St. Maarten recently transitioned from the Netherlands Antillean Guilder to the Caribbean Guilder, describing it as a significant step in the modernization of the monetary system. He pointed out, however, that the decision to move to the Caribbean Guilder was taken well before his time and in a climate of tension not unlike the one seen today.

He said that St. Maarten is also carefully examining the issue of dollarization as part of broader and longer-term considerations about the country’s economic future. However, he stressed that this is not a decision to be taken lightly.

Prime Minister Mercelina referenced the experiences of Saba, St. Eustatius, and Bonaire, where transitions to the U.S. dollar brought both benefits and challenges. He said one of the key lessons from those examples is the importance of managing inflation and protecting purchasing power during any such transition.

Should dollarization ever be pursued in the future, Prime Minister Mercelina said St. Maarten must ensure that a direct and fair conversion from the Caribbean Guilder to the U.S. dollar is executed at the official rate. He further stressed that measures must be put in place to prevent artificial price increases and that strong regulatory oversight must exist to protect consumers and businesses.

He warned that St. Maarten must avoid any scenario in which the cost of living rises disproportionately and places an unnecessary burden on the people.

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