The financial crisis in Puerto Rico is escalating fast; the island has taken a sudden step to declare a state of emergency and move toward a unilateral moratorium on all government debt payments, thereby rejecting efforts by the US to allow it to restructure only under close federal supervision. This has taken both Wall Street and Washington by surprise, however, despite the move by Puerto Rico, the House Natural Resources Committee still intends to update its draft plan to rescue the US territory. This follows a move by creditors of Puerto Rico's Government Development Bank (GDB) to sue in a bid to prevent it from distributing money to creditors in what they call "preferential transfers" ahead of the GDB's 1 May debt payment that Puerto Rico's Governor says may not be payable. Puerto Rico has $$1.3 billion in debt, a 45% poverty rate and a shrinking population.
The financial crisis in Puerto Rico is escalating fast; the island has taken a sudden step to declare a state of emergency and move toward a unilateral moratorium on all government debt payments, thereby rejecting efforts by the US to allow it to restructure only under close federal supervision. This has taken both Wall Street and Washington by surprise, however, despite the move by Puerto Rico, the House Natural Resources Committee still intends to update its draft plan to rescue the US territory. This follows a move by creditors of Puerto Rico's Government Development Bank (GDB) to sue in a bid to prevent it from distributing money to creditors in what they call "preferential transfers" ahead of the GDB's 1 May debt payment that Puerto Rico's Governor says may not be payable. Puerto Rico has $70bn in debt, a 45% poverty rate and a shrinking population.