On May 1, Puerto Rico defaulted on a $400 million debt payment. The missed obligation is "the first step toward what is expected to be an even bigger default this summer," says CFR Senior Fellow Brad Setser. If the U.S. Congress is unable to pass legislation to help Puerto Rico restructure its $73 billion debt, Setser says, lawsuits by creditors could further damage the island's finances and disrupt the provision of social services. Ultimately, he says, to recover from its recession and debt crisis, Puerto Rico needs reforms to boost its business climate, improve the quality of services, and change its relationship with the federal government so that the island is in some respects treated more like a state.
http://www.cfr.org/puerto-rico/can-puerto-rico-escape-its-debt-crisis/p37849
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