Navigation
Suscribe
Menu Search Facebook Twitter
Search Close
Menu ALL SECTIONS
  • Capital Coahuila
  • Capital Hidalgo
  • Capital Jalisco
  • Capital Morelos
  • Capital Oaxaca
  • Capital Puebla
  • Capital Quintana Roo
  • Capital Querétaro
  • Capital Veracruz
  • Capital México
  • Capital Michoacán
  • Capital Mujer
  • Reporte Índigo
  • Estadio Deportes
  • The News
  • Efekto
  • Diario DF
  • Capital Edo. de Méx.
  • Green TV
  • Revista Cambio
Radio Capital
Pirata FM
Capital Máxima
Capital FM
Digital
Prensa
Radio
TV
X
Newsletter
Facebook Twitter
X Welcome! Subscribe to our newsletter and receive news, data, statistical and exclusive promotions for subscribers
World

Historic Takeover of Puerto Rico's Finances, Agencies Begins

Puerto Rico has been in a financial slump for the last 10 years

In this July 29, 2015 file photo, a bronze statue of San Juan Bautista stands in front of Puerto Rico’s capitol flanked by U.S. and Puerto Rican flags, in San Juan, photo: AP/Ricardo Arduengo
1 year ago

SAN JUAN, Puerto Rico – A federal control board on Friday took over Puerto Rico’s finances and several government agencies for the first time in the U.S. territory’s history in a bid to haul the island out of an acute economic crisis.

The seven-member board met in New York and was briefly interrupted by protesters who yelled, “This is slavery!” and “Stop pillaging Puerto Rico!”

The meeting was livestreamed over the internet following pledges that the board would operate with transparency.

It ordered Gov. Alejandro García Padilla to produce a fiscal plan in two weeks and submit weekly and monthly revenue reports that detail how the government is adhering to its budget.

Members also voted on which Puerto Rico government agencies would come under the board’s oversight. They include the island’s central government, its largest public university, its heavily indebted utility companies, a Government Development Bank that is running out of cash and a public pension system underfunded by more than $40 billion.

“We’re working as quickly as possible,” said José Carrión III, who was elected board president, to reporters after the meeting.

The board was approved by Congress in June and is charged in part with helping restructure a portion of a nearly $70 billion public debt that García Padilla has said is unpayable. Carrión is one of four Republicans on the board, along with three Democrats. Also on the board is a representative of Puerto Rico’s governor who is barred from voting.

García Padilla on Thursday urged the board to make the public pension system one of its priorities. He also requested that the board consider intervening in a trial in which a federal judge is expected to soon rule on whether Puerto Rico will have to pay its debts even though the U.S. legislation signed in June also protects the island from lawsuits through February 2017.

Board members did not comment publicly on that petition.

Puerto Rico has been mired in a decade-long economic slump brought about largely by decades of heavy borrowing. The island has defaulted on several multimillion-dollar bond payments since last year and faces a growing number of lawsuits from creditors trying to recover a portion of their investments. Several government agencies are now operating under a state of emergency that permits withdrawals only for essential public services.

Puerto Rico economist Gustavo Vélez said the board will likely soon seek help from the capital markets to generate revenue.

“If it doesn’t, then it will have to impose severe austerity measures,” he said. “There is no other way to finance the deficit. The government likely will not be able to pay salaries very soon. We’re in a downward spiral.”

DANICA COTO

Comments Whatsapp Twitter Facebook Share
More From The News
Sports

NBA Changes All-Star Game Format; Captai ...

3 weeks ago
Business

World Stocks Mixed as Investors await mo ...

3 weeks ago
World

Sweden Grants Temporary Asylum to 106-Ye ...

3 weeks ago
World

Puerto Rico Raises Hurricane's Official ...

3 weeks ago
Most Popular

IMCO proposes anti-corruption law

By Administrador
Mexico

La Laguna Hosts Job Fair

By Administrador
Mexico

First Case of Zika in Michoacán

By Administrador
Mexico

Gas and Diesel Prices Unlikely to Change

By Lucilly Zavala
Mexico

10 dead, 26 hurt when bus crashes on mou ...

By The Associated Press
Mexico