By Greg Williams
Puerto Rico's "control" board sent a letter to current Governor Alejandro García Padilla and incoming Governor Ricardo Rossello stating areas for fiscal plan review and that debt restructuring talks are moving forward. TheFinancial Oversight and Management Board of Puerto Rico begins conversations with creditors this week.
"It's critical the board is moving forward with the process to restructure Puerto Rico's debt," said Jubilee USA Executive Director Eric LeCompte. LeCompte testified to the board in November and suggested the debt be reduced by as much as 60 percent. "I'm encouraged by statements from board members that a deep reduction of Puerto Rico's debt is needed."
The oversight board and debt restructuring process for the US territory are products of Congressional action this past summer. The Puerto Rico Oversight, Management and Economic Stability Act also temporarily prevents debt collection lawsuits against the heavily indebted island. Unless a formal debt restructuring process moves forward by February, the moratorium on lawsuits will expire.
"If talks between creditors and Puerto Rico fail to achieve a deep cut in the debt, the oversight board needs to authorize the formal court arbitrated restructuring process," noted LeCompte. "Solving this crisis starts with restructuring the debt. Creating economic conditions for growth depends on a deep cut of the island's debt."
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