Anuncio
Anuncio

Puerto Rico gov’t: Population will suffer without debt relief

Share

The Puerto Rican government warned that if legal tools are not granted to it to restructure its $72 billion debt, the population of the Caribbean island will suffer the consequences for a decade.

This week is key in having the U.S. Congress adopt a position on whether Puerto Rico may resort to Chapter 9 bankruptcy protection, government chief of staff Victor Suarez told reporters on Monday.

The Puerto Rican press reported that congressional leaders and White House officials will meet this week to adopt a joint stance on whether Puerto Rico may invoke Chapter 9.

Anuncio

Suarez emphasized that that is the proper way to deal with the problem, since otherwise the scenario is that, after a possible default, a legal battle with unpredictable consequences between creditors and the government would result.

The concern in Washington over what happens in the U.S. commonwealth is such that Treasury Secretary Jack Lew was ready to travel to San Juan last week if Gov. Alejandro Garcia Padilla’s administration failed to make a $354 million interest payment on bonds.

The payment was able to be made thanks to the removal of funds from several public firms, a move that analysts interpret as a gesture of goodwill.

The payment, for the moment, has quieted creditors’ fears of a default, although the issue remains open.

The government last week announced that it would not pay the traditional Christmas bonus to public employees on Dec. 4, contrary to custom, due to a lack of liquidity and said it would not deliver the bonuses until Dec. 20, at the earliest.

The government’s liquidity problems come at the same time as a corruption scandal, made public last week.

On Dec. 3, FBI agents arrested Anaudi Hernandez, a friend of Garcia Padilla, who allegedly said he had raised funds for the governing party with an eye toward illicitly obtaining contracts for his companies.