Wednesday 18 October 2017

Puerto Rico to go bankrupt with €64bn debts

Governor Alejandro García Padilla
Governor Alejandro García Padilla Newsdesk Newsdesk

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

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.

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