CRISIS/NATIONAL DEBT/PUERTO RICO: “The devastation wrought by Hurricane Maria is making Puerto Rico’s already dire financial situation even worse. The island’s leaders acknowledged late Wednesday [1-24-18] that they will not be able to pay down any portion of their more than 70 billion debt for the next five years because of the damage.
Just before the hurricane, Puerto Rico had made plans to pay creditors a total of $3.6 billion through 2022. That was just a fraction of the amount due, had the island, a United States commonwealth, not gone into default.
Now, Puerto Rico expects its budget to be $2 billion to $3 billion in the red, Gov. Ricardo A. Rosselló told reporters at a briefing on Wednesday — a deficit that will take five years to shrink. By then, he said, the cumulative effect of tough economic austerity measures will help the island’s government achieve a balanced budget, as required by the federal oversight board that controls Puerto Rico’s troubled finances.
Puerto Rico submitted an updated fiscal plan to the board, including the five-year debt moratorium. An earlier draft had been approved, with certain exceptions, before Hurricanes Irma and Maria slammed into the Caribbean island in September. But that plan had to be reworked in light of Maria’s vast devastation, which prompted tens of thousands of Puerto Ricans to flee the island amid job layoffs and power blackouts. Nearly a third of customers remain without electricity, more than four months after the storm.”
-Patricia Mazzei and Mary Williams Walsh, “Hurricane-Torn Puerto Rico Says It Can’t Pay Any of Its Debts for 5 Years,” The New York Times online, Jan. 24, 2018