Saturday, January 28, 2023

Governor Denies Moratorium Constitutes a Default

By on April 6, 2016

SAN JUAN— In the midst of deliberations in the House of Representatives to approve a legislation that would enable Puerto Rico to declare a moratorium on the commonwealth’s debt payment, Puerto Rico Governor Alejandro García Padilla said early Wednesday that such a bill does not constitute a default of its obligations to creditors.

agp serio featureInstead, the governor touted the Puerto Rico Emergency Moratorium & Financial Rehabilitation Act, or Senate Bill 1591, as a measure to protect Puerto Rico’s resources and the services that the government provides. Shortly after García Padilla’s remarks, the House approved the bill and now awaits the governor’s signature.

Discussions in the House regarding the bill went on late into the night on Tuesday, with various representatives abstaining from voting in favor of the bill until the last minute. This brought the governor to denounce the apparent influence that lobbyists beholden to bondholder groups were having on the legislative lower chamber.

Although García Padilla noted that any representatives voting against the bill were not necessarily influenced by lobbyists, he catalogued any opposition to the bill as a “suicidal instinct” that would sink Puerto Rico if left unchecked. He also levied criticism at those Puerto Rican lobbyists who have been hired by bondholders. “I even know some of them personally,” he said. “It’s a shame they’re lobbying in favor of Wall Street instead of Puerto Rico.”

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