Tuesday 21 February 2017

Puerto Rico to go bankrupt with €64bn debts

Published 01/07/2015 | 02:30

Governor Alejandro García Padilla
Governor Alejandro García Padilla

While Greece flounders, debt-laden Puerto Rico wants to be allowed to go bankrupt.

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The governor of the US territory on Monday called for it to be allowed to restructure its debts under US bankruptcy law, while a newly appointed adviser said it was "insolvent" and would soon run out of cash.

Governor Alejandro Garcia Padilla, in a televised address, said sacrifice must be shared by bondholders, and called for Washington to allow a bankruptcy debt restructuring.

Citizens also face cuts as the government reduces spending.

The Caribbean island's 3.6 million people are buckling under debts of $73bn (€64bn)

It came to a crunch point on Monday after a report by former International Monetary Fund economists hired by the local government described the situation as "dire".

Although a US territory, the Federal government is not responsible for Puerto Rico's debt. There is no prospect of a bailout. Governor Padilla wants US law tweaked to allow it follow the city of Detroit, which broke the mould with its historic municipal bankruptcy.

Irish Independent

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