SAN JUAN, Puerto Rico – Puerto Rico's governor believes the U.S. territory's $72 billion public debt is unpayable, his spokesman confirmed late Sunday, adding another blow to the international financial system already struggling with a possible default by Greece.
Gov. Alejandro Garcia Padilla's spokesman, Jesus Manuel Ortiz, confirmed that the island's government will seek to defer payments while negotiating with creditors.
He confirmed comments by Padilla that appeared in a report in The New York Times published late Sunday, less than a day before Garcia is scheduled to deliver a public address as legislators debate a $9.8 billion budget that calls for $674 million in cuts.
"There is no other option. I would love to have an easier option. This is not politics, this is math," Garcia is quoted as saying in the Times.
The governor recently confirmed that he had considered having his government seek permission from the U.S. Congress to declare bankruptcy amid a nearly decade-long economic slump. His administration is currently pushing for the right for Puerto Rico's public agencies to file for bankruptcy under Chapter 9. Neither the agencies nor the island's government can file for bankruptcy under current U.S. rules.
Puerto Rico's public agencies owe a large portion of the debt, with the power company alone owing some $9 billion.