The Consensus Kingdom Act goes hand in hand with the National Ordinance safeguarding sustainable public finances (Lwho). This is a law of the country Aruba itself in which the standards for the Aruban government budget are included. These standards are based on guidelines from the International Monetary Fund and contribute to maintaining balanced expenditures.

Secretary of State Van Marum of Interior and Kingdom Relations: “The fact that there is now a bill marks an important step in the cooperation between Aruba and the Netherlands. It is an example of how good and constructive collaboration can lead to a result that everyone can be proud of. With attention and respect for each others viewpoints, we have a proposal for a Consensus Kingdom Act that is in the interest of both countries. Aruba takes responsibility for financial management and gains more space for making investments in education, healthcare, and the economy.”

Prime Minister Eman: “Finalizing this agreement is an important investment by Aruba in its reliability. A reliability that must form the basis for a sustainable relationship within our Kingdom, with a renewed vision focused on strategic cooperation in pursuing the Common Good of Aruba, the Netherlands, and the entire Kingdom.”

Budget Standards

The Consensus Kingdom Act on sustainable public finances in Aruba regulates the standards for achieving and maintaining sustainable public finances. It also regulates how the Council of Ministers supervises the public finances of Aruba. The Aruba Financial Supervision College (CAft) will continue to advise both Aruba and the Council of Ministers in the context of financial supervision. This advisory role is temporary and will cease once Aruba meets the standards. A Budget Chamber to be established by Aruba will then take over the role of the CAft.

Lower Interest Rates on Loans

The Consensus Kingdom Act offers many advantages to Aruba. For example, Aruba will eventually pay a lower interest rate for the loans it has taken out from the Netherlands during the Covid pandemic, and the Netherlands is willing to refinance loans that Aruba has on the American capital market. The saved interest can then be spent by Aruba on investments in its own country. Additionally, it will be possible for Aruba to take advantage of the favorable conditions that the Netherlands has when subscribing to loans. In this way, it will be possible for Aruba to borrow capital for public investments at a lower interest rate. This keeps Arubas debt burden limited.

Aruba will also include additional provisions in its own national legislation. For instance, upon the entry into force of the Consensus Kingdom Act, Aruba will establish its own Budget Chamber, as an advisor to the Aruban States and the government. Upon the expiration of the Consensus Kingdom Act, the Budget Chamber will take over the position of the CAft. Changes or establishment of national legislation can only occur with the consent of the Council of Ministers. The proposal for the Consensus Kingdom Act includes that the operation of the law will be evaluated every five years during its term.