Puerto Rico Will Default on Debt Payment

[Anonymous]

Puerto Rico has halted a $422m (£289m) debt payment due on Monday after talks to ease the US territory's crisis ended without a deal.



Governor Alejandro Garcia Padilla said in a televised speech he had issued an executive order suspending payments.



He described it as a "painful decision", but had been warning since last year that the island's public debt of more than $70bn was unpayable.



The US Congress has tried without success to agree a solution.



"Let me be very clear, this was a painful decision," Mr Garcia said in a speech. "We would have preferred to have had a legal framework to restructure our debts in an orderly manner."





He acknowledged before the weekend that if the payment was not made, it was likely to spark legal action from creditors. A further debt payment of $1.9bn is due in July.



'Continue to suffer'



Puerto Rico officials have held talks with groups holding some of its $4bn in bonds to try to restructure the debt.



Some creditors have argued that the territory has exaggerated its crisis and that economic reforms would improve the island's finances.



"The government has known the [Government Development Bank] was a ticking time-bomb and yet nothing constructive was done to forestall a default," Arturo Porzecanski, economist and sovereign debt expert at American University in Washington, told the Reuters news agency.



He added: "The approach is symptomatic of all that is wrong with how Puerto Rico has dealt with its deteriorating financial situation."



Congress is in recess until the week of 9 May. "If Congress fails to authorise a mechanism to restructure our debt, the 3.5 million American citizens who live in Puerto Rico will continue to suffer," Mr Garcia Padilla said.

http://www.bbc.com/news/business-36184250">http://www.bbc.com/news/business-36184250



I wonder what if any action Washington will take?

[Anonymous]

SAN JUAN, Puerto Rico — Crushed by rampant joblessness and poverty and hemorrhaging educated residents, Puerto Rico will default on $422 million in debt payments due Monday, Gov. Alejandro García Padilla said Sunday.



And things could get even worse in a couple of months, when another payment of more than $700 million is due in July, Treasury Secretary Juan Zaragoza warned.



The territory of 3.5 million U.S. citizens has been losing white-collar and middle-class professionals at an alarming rate. Unemployment tops 12.5 percent, and doctors have been leaving the island at the rate of one a day.



"It's basically tearing me apart," said one of those doctors, Yolanda Pagan of San Juan.





"It's such a pretty, wonderful treasure here in the Caribbean," Pagan told NBC News. "It's just gorgeous, and it's so sick right now."



Dr. Jaime Rivera, president of the Puerto Rico Hospital Association, said health care in the territory is in "crisis."



"It's gotten really difficult at this moment," Rivera told NBC News. "I think we're hanging on the cliff already."

http://www.nbcnews.com/news/latino/puerto-rico-governor-declares-island-will-miss-debt-deadline-n565596">http://www.nbcnews.com/news/latino/puer ... ne-n565596">http://www.nbcnews.com/news/latino/puerto-rico-governor-declares-island-will-miss-debt-deadline-n565596



And it's best and brightest continue to leave for other parts of the US.

[Anonymous]

PR would be a good place to buy real estate. ac_umm

[Anonymous]

Puerto Rico is great. What a shame.

[RW]

PR would be a good place to buy real estate. ac_umm

Looks like it will be if you wait a bit longer.

[Anonymous]

I wonder what if any action Washington will take?

Next week, when the poor overworked legislators return from vacation, the congressional leaders will blame Obama and pre-emptively announce they are opposed to whatever measures he might propose.



Needless to say, they won't have any proposals of their own.

[Anonymous]

I wonder what if any action Washington will take?

Next week, when the poor overworked legislators return from vacation, the congressional leaders will blame Obama and pre-emptively announce they are opposed to whatever measures he might propose.



Needless to say, they won't have any proposals of their own.

The poor overworked Obama did not seem to offer any proposals when he returned from Hawaii and Cuba.



Needless to say, he will blame congress.