Puerto Rico Justice Secretary Cesar Miranda acknowledged that some might view Puerto Rico’s move as a technical default since the government is diverting money meant for future bond payments. “The emergency measures we have taken to avoid default and maintain essential services are unsustainable”. After testifying, Padilla told reporters he believed the island would be able to work out a payment using extreme measures, but the details were still being hammered out.
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More important, it wants Congress to change laws barring it from declaring bankruptcy, insisting it’s the only way out of the fiscal trap Puerto Rico finds itself in.
In written testimony, Garcia Padilla said: “In simple terms, we have begun to default on our debt in an effort to attempt to repay bonds issued with the full faith and credit of the commonwealth and secure sufficient resources to protect the life, health, safety and welfare of the people of Puerto Rico”.
Meanwhile, a Senate committee was to hold another hearing on Puerto Rico’s crisis.
The payment on bonds issued by the GDB was crucial as Puerto Rico tries to stretch its liquidity into 2016 to provide more time to restructure debt.
“The financial somersaults and headstands must end”, said Democratic Sen.
Puerto Rico’s debt has now tripled in just 15 years.
“These folks aren’t vultures”. They don’t know what is going to happen. Statehood supporters say the economic crisis shows why Puerto Rico must become the 51st USA state; independence proponents say it supports their cause.
As of Monday afternoon, Puerto Rico was undecided on whether let the deadline pass without payment, thus defaulting and potentially setting off a court battle. The island’s Public Finance Corporation already missed a $58 million bond payment in August, its first ever. Richard Blumenthal of CT.
Democrats at the hearing called on Congress to act. “It is time for Congress to legislate”.
Alejandro García Padilla earlier this year said it was not possible for his country to pay off its $72 billion debt.
Puerto Rico has narrowly avoided a default by making a last minute payment on its outstanding debt.
El gobernador de Puerto Rico Alejandro Javier García Padilla atestigua ante el Comité de Asuntos Jurídicos del Senado de Estados Unidos sobre los problemas fiscales de la isla, el 1 de diciembre del 2015.
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“If anyone puts me into a position of selecting to pay a creditor, or a policeman, a teacher, or a firefighter, I will pay the policeman, teacher, or firefighter”. Puerto Rico’s economy then fell into a tailspin that only worsened after the wider US economy almost collapsed in 2008.
