US legislation could be solution for Puerto Rico

Author: Edward Price | Published: 29 Jun 2016

Puerto Rico owes creditors around $72 billion, but cannot pay. July 1 will see the commonwealth default on more than $1 billion of the $2 billion in debt that’s then due. Some believe the only way the commonwealth can restructure is US legislative action, in the form of the PROMESA act.

The  commonwealth's crisis was a long time in the coming. With a struggling economy, and an increasing debt pile after the global financial crisis, Puerto Rico’s long and short term outlooks are both dire.

There have been attempts at a fight back. Puerto Rico introduced its own restructuring statute, although the Supreme Court rejected it. The commonwealth also tried to negotiate a settlement with its creditors. That door was also closed. So it went to Congress for help. 

Puerto Rico's last hand? That led to some hope of relief; a bill designed to help the...