Puerto Rico, crushed by debt, seeks moratorium

Crushed by liabilities it now cannot repay, Puerto Rico is seeking to reschedule its $73 billion debt, the US commonwealth's governor said June 29.

Governor Alejandro Garcia Padilla earlier made the admission in a New York Times interview, rattling stock markets and quickly knocking 10 percent off prices of Puerto Rican bonds.
 
"The goal is going to be a moratorium that is negotiated with bondholders to delay debt payments for a number of years, so money is available to be invested here in Puerto Rico, to create jobs," the governor said in a televised address.
 
"By sharing the sacrifice with our creditors, we will be able to move forward.
 
But "Puerto Rico is unable to keep making payments under current terms," he added, speaking in Spanish.
 
The governor of the US territory of 3.5 million people -- a former Spanish colony where citizens have a US passport but their own Olympic team -- said he would urge the US government to change its bankruptcy regulations so that Puerto Rico can declare bankruptcy legally.
 
He said he was creating a task force to work on overhauling the island's finances. And the governor promised some cutbacks, though not in education or job creation.
 
"I am going to fight for jobs as a central goal of this process," he said.    

And "we are not going to let the crushing weight of debt passed down by others put us on our knees," Garcia Padilla pledged.
 
"We are not going to be forced to make a choice between paying the police, or paying teachers and nurses, and paying the debt.    

"There is another way."  

He warned that "it's not in anybody's best interest for this strategy to fail."          

On June 29, the government...