One has to be encouraged by the fact that at least the U.S. Treasury appears to have learned something from Greece’s economic crisis. Rather than pretending that Puerto Rico is solvent, the Treasury now recognizes that an early and orderly debt restructuring would be in the long-term interest of both the island and the collective of Puerto Rico’s creditors.
Similarly, rather than leaving the island to its own devices, the Treasury is proposing that, in exchange for bankruptcy protection, Puerto Rico agrees to an oversight board that would assure the full implementation of its fiscal commitments. If adopted soon by Congress, these proposed policies could spare Puerto Rico from Greece’s tragic economic fate and enable creditors to get repaid a higher proportion of their loans than would otherwise be the case.
While there are certainly many differences between Puerto Rico and Greece, there are a number of striking similarities. Those similarities suggest that Congress would do well to look at Greece’s experience when framing a policy response to the island’s deep economic troubles, which are now reflected in a 45 percent domestic poverty rate and in an ever-increasing number of Puerto Ricans leaving the island for the mainland.
Full text of this article is available at TheHill.com.
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