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Bernier Argues PROMESA Falls Short

By on April 13, 2016

SAN JUAN — Following the filing in Congress of the Puerto Rico Oversight, Management & Economic Stability Act, or PROMESA, Popular Democratic Party (PDP) gubernatorial hopeful David Bernier expressed concerns over the House bill, particularly on the debt-restructuring mechanism it is proposing, according to a statement released Wednesday.  

David Bernier

David Bernier

Earlier in the day, the U.S. House Committee on Natural Resources held a hearing on the proposed legislation, HR 4900, which seeks to establish strong, independent fiscal oversight through a seven-member board. The board would also oversee the commonwealth’s debt-restructuring efforts, aiming to have all sides reach a consensual agreement.

If no consensus can be struck with creditors, the board could authorize taking the matter to federal court under a territory-exclusive debt-restructuring mechanism. Moreover, a temporary stay on creditor lawsuits against the island would also be established through PROMESA.

Bernier believes the debt-restructuring mechanism, as provided under the bill, would not bind creditors, while any restructuring effort would need to be voluntary.

“This bill, far from facilitating a broad restructuring, would make it more difficult. The measure also fails to provide the economic development tools that Puerto Rico needs to overcome the crisis,” he stated as he urged for more amendments.

Regarding the proposed fiscal oversight board, the PDP gubernatorial candidate said that despite the changes introduced since a draft version of the bill was released a few weeks ago, it continues to undermine the island’s self-governance. For instance, he noted how the board would have the last word in such matters as Puerto Rico’s budgetary process, drawing up a long-term fiscal plan, and the approval of laws and regulations.

Moreover, Bernier pushed for a short-term agreement between the commonwealth and its creditors, particularly after U.S. Treasury’s comments to the effect that, if PROMESA is approved, it would take one to two years to solve Puerto Rico’s fiscal woes.

“We must be clear that without debt restructuring or tools for economic development, [PROMESA] becomes futile,” he noted.

Following Wednesday’s hearing, the House Natural Resources Committee is expected to begin later on the day a markup hearing on the measure, through which the House could still further amend the bill. A final vote in the lower chamber is expected to take place before the end of the month.

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