Sint Maarten and Curaçao monetary union needs 'less political wisdom', more co-ordinated action

The current account deficit in Sint Maarten has declined in recent years while the deficit in Curaçao remains "well above" 5% of GDP, Emsley Tromp, president of the countries' shared central bank, noted in a speech this weekend, but added that "both countries bear responsibility for addressing the situation of the balance of payments in the monetary union".

To shrink the deficit, the central bank has aimed to reduce liquidity by gradually increasing the reserve requirements of banks, Tromp said. He added that "monetary policy has produced the intended results by moderating credit growth, improving the current account deficit on the balance of payments, and stemming the decline in reserves in the monetary union".

"Regular consultations and co-ordination of policy actions between the two countries are imperative," he argued, adding that the "focus of the discussion has been on the political wisdom of a monetary union between Curaçao and Sint Maarten rather than on how this current situation should be addressed through co-ordinated actions".