“The island owes $74 billion in bond debts and $49 billion in pension payments.”
I’m sure they are waiting for a bailout from the USA.
Earlier this week, Puerto Rico, an American territory, sought “bankruptcy” protection after years of economic downfalls and facing $123 billion in bond and pension debts. So why did it take over two years for the island to address these problems?
First off, it’s not exactly bankruptcy since Puerto Rico is only a territory and the island cannot receive the same Chapter 9 protections like the states. Second, it was not until last year that Congress passed the Puerto Rico Debt Relief Bill:
The legislation would create a federal oversight board, appointed by Washington, with power to restructure Puerto Rico’s unmanageable debt load.
The bill provides for a stay, or halt, to any litigation brought against the Puerto Rican government and its debt issuing agencies that is retroactive to December. This provides breathing room for the board to start the process of restructuring and oversee a sustainable budget process.