Puerto Rico defaults again
The island did not make the $422 million debt payment due Monday.
In a move that surprised few people, Puerto Rico has once again defaulted on its debt payments. It was due to make a $422 million payment on Monday.
According to USA Today, the island’s governor, Alejandro García Padilla addressed the Puerto Rican people on Sunday and said he had given the order not to make the payments that were owed.
“This was a painful decision,” said Padilla during a televised address. “We would have preferred to have had a legal framework to restructure our debts in an orderly manner. But faced with the inability to meet the demands of our creditors and the needs of our people, I had to make a choice. I decided that essential services for the 3.5 million American Citizens in Puerto Rico came first.”
This default marks the newest step in the ongoing debt crisis which has caught the attention of lawmakers in Washington D.C. as they continue to debate the best course of action. Puerto Rico currently finds itself in a $72 billion hole of debt which some have compared to the debt crises in Greece or Detroit. The difference being that Puerto Rico does not have the ability to declare bankruptcy and restructure its debt.
Washington has begun to talk about possible solutions including a financial oversight board, an idea which is highly rejected on the island. On Monday, The White House said the situation requires an “urgent response” and called on lawmakers to act swiftly to find solution after “dragging their feet for too long.”
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