Beautiful Puerto Rico
The island is a land of natural beauty, but
they can't balance a checkbook.
(The Guardian) - Puerto Rico’s Democrat governor, Alejandro García Padilla, told the US Senate on Tuesday that the troubled Caribbean island has “no cash left” and can no longer repay its $72bn debts.
The territory announced it would honor a $354m debt payment due on 1 December as Padilla was testifying, but Padilla said austerity measures had not only eaten into essential services but caused tax revenues to crater. With more than $900m due in January, the governor said his options were restructuring or disaster.
Padilla gave the Senate a deadline of Dec. 11 to provide Puerto Rico a viable restructuring plan.
“The consequences of a default without any legal framework to restructure our liabilities are so disastrous that for the past six months we have been executing emergency measures to continue meeting our obligations with our creditors and avoid a disruption of essential services to our citizens,” Padilla said in a prepared statement. “These emergency measures are unsustainable.”
Face to face with the Senate judiciary committee, however, he was more blunt: “Absent an orderly process, [the default’s] effects will be catastrophic. That is why, starting today, the commonwealth of Puerto Rico will have to claw back revenues pledged to certain bond issues in order to maintain essential public services. We have taken this difficult step in the hopes that Congress will act soon, but let us be clear: we have no cash left.”
The troubled territory, where 45% of its 3.5 million population live in poverty, looked almost certain to miss its latest debt payment on Tuesday as the US Congress discussed ways to save Puerto Rico from being crushed by its $72bn debt.
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|Puerto Rico has so much to offer the U.S.|