POLITICS

Puerto Rico's House Passes Emergency Debt Moratorium Bill

The measure throws into doubt broader restructuring plans to stave off a financial collapse.

SAN JUAN (Reuters) - Puerto Rico's House of Representatives early on Wednesday passed an emergency bill allowing the government to halt payments on its debt, throwing into doubt broader restructuring plans to stave off a financial collapse of the U.S. Commonwealth.

The bill approved in the wee hours of Wednesday by a vote of 26-21 follows approval of the bill by the Senate on Tuesday. The measure would allow Governor Alejandro Garcia Padilla to declare a moratorium on any debt payment he deems necessary, and also alter the structure of the Government Development Bank.

Garcia Padilla is expected to quickly sign the bill into law.

Burdened by a $70 billion debt load it says it cannot pay and a 45 percent poverty rate that has led to a steady exodus of its American citizens to the mainland, Puerto Rico faces economic collapse without a solution that either changes laws and/or involves an agreement with creditors.

The introduction of the law had drawn a quick rebuke from creditors who hold the Puerto Rican government's General Obligation debt.

(Reporting by a contributor in San Juan; writing by Daniel Bases; Editing by Chizu Nomiyama)

HuffPost

BEFORE YOU GO

PHOTO GALLERY
Puerto Rico's Debt Crisis
CONVERSATIONS