By Robert Miranda
Editor’s Commentary
As Puerto Rico defaults on its debt, banks around the world look in stunned disbelief at the manner the American Congress and Senate have just dragged their feet supporting America’s Territory in the Atlantic.
Last week, Puerto Rican Gov. Alejandro Garcia Padilla said the island’s Government Development Bank (GDB) was not going to make good on its $422 million payment due to its creditors.
A Reuters report ahead of Padilla’s speech said the GDB was “expected to skip at least the principal portion of its payment to hedge funds, credit unions, and other bondholders.”
Like many financially distressed governments around the globe — think Greece, for example — Puerto Rico has been faced with demands from creditors while the island undertake drastic spending cuts to create surpluses large enough to meet debt obligations.
When Greece was in financial stress the United States and world financial institutions responded to help Greece. Yet with Puerto Rico it seems the United States is kicking and crying about having to find a solution for Puerto Rico.
Padilla reinforces his position in which he argues that the island will continue negotiations with its creditors to pay the debt.
In the financial world, Puerto Rico’s distress does not come as a great shock, and many creditors believe that the island will eventually reach agreements to pay back its creditors.
Padilla’s announcement is also certainly not the end of Puerto Rico’s fiscal dilemma. Puerto Rico’s GDB has held talks with groups holding some of its $4 billion in bonds to try to restructure the debt consensually. Nevertheless, Padilla insists the U.S. territory needs relief from debt payments.
A default would ratchet up pressure on the U.S. Congress to find a legislative solution for Puerto Rico.
U.S. House Speaker Paul Ryan initially called for a plan by March 31. However, draft legislation from the House Natural Resources Committee, which would put Puerto Rico’s finances under federal oversight and allow it to restructure debt through a bankruptcy-like process, has faced opposition from liberal and conservative wings of both parties.
Whatever the outcome, what is certain is the fact that the Republicans are turning their backs on Puerto Rico. Puerto Rico has been America’s southern most defense outpost in the Atlantic for all of the 20th century and Puerto Ricans have fought in every major campaign when America called. Now the GOP has forsaken Puerto Rican blood – throwing Puerto Ricans under the bus.
Tell House Speaker Paul Ryan: Puerto Rico must be supported.
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