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Puerto Rico will default on $422 million payment

Staff writer |
Puerto Rico Governor Alejandro Garcia Padilla announced the U.S. commonwealth would default on $422 million in debt.

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The governor said that Puerto Rico can’t pay creditors when it needs to fund public sector salaries, health and education budgets, which, if neglected, could unleash a “humanitarian crisis.”

Puerto Rico has been locked in recession for a decade, and already defaulted on some debt payments at the beginning of the year.

Garcia Padilla says he does not want a bailout but simply legal ability to restructure existing debt. But in order to do so, he needs the Congress in Washington to act, and it will not for partisan political reasons, the governor said.

“This was a painful decision. We would have preferred to have had a legal framework to restructure our debts in an orderly manner,” he said in a televised address.

“I have had to make a choice, and I made a choice,” he added.

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