The unprecedented step to appeal to the federal judicial system to restructure the Puerto Rican public debt, under the protection of PROMESA, provides the Government of Puerto Rico with the tool to respond to its creditors in an orderly manner, while obtaining the protection against litigations which in turn, will provide it with the space necessary to execute the Fiscal Plan designed to guide the Country’s recovery.
To invoke Tittle III of PROMESA has been the logical step, given that the bona fide negotiations between the Government and the bondholders have been unsuccessful. Governor Ricardo Rosselló has acted with the wisdom demanded by the urgency to solve the fiscal crisis by invoking, through the Oversight Board, this statutory recourse, akin to a bankruptcy.
Having run down the clock, which opened the way for hundreds of suits against the Government on midnight, April 31, highlighted the need for the Board to petition the United States Supreme Court for the restructuring mechanism for part of Puerto Rico’s immense debt.
Settling the equation by means of which the Country’s complicated indebtedness is to be resolved is now in the hands of a federal judge, by appointment of the high federal court. The dialogue, sterile so far, is placed in an objective setting for the negotiations. A judge devoid of any interests tying him to any of the parties will establish the periods and terms for the restructuring process.
The legal process under Tittle III also facilitates a balanced space to manage the debt without affecting the public operation. At the same time, it will avoid an endless string of complaints against the Government and the allocation of extraordinary resources involved in legal complexities and high litigation costs both in and outside of Puerto Rico.
Our Island has to put an end to its economic decline and bet on its recovery. This requires the local Government concentrating on the execution of the Fiscal Plan and a balanced budget. Both are essential aspects to balance the finances, increase revenues, and carry out the systemic reforms that add to the Government’s efficiency and turn it into an enabler of economic development.
But Tittle III, now indispensable, will not be enough for the Country to go after its recovery, for which some bases have been laid already. The fact is that the Island’s challenge is enormous.
To the preservation of Government employees’ jobs, and their fringe benefits, there must be added the guaranty that those without the means to pay for health services are assured access to them. We must also stand up for the dignified life of our retirees. Overcoming challenges such as these depends on the cooperation of every Puerto Rican.
Except for the University of Puerto Rico, the main public corporations in debt and not covered under PROMESA submitted their fiscal plans to the Board, which approved them.
The other pillar of this frameworkwhich is essential to the fiscal and economic reactivation is the drafting of a government budget that is moderated by the actual possibilities of revenues and spending that is based on clear priorities. The cutbacks to superfluous and extreme spending are a requirement.
The responsibility to manage the fiscal resources and the new roadmap offered by the fiscal plans of the Government and its units is only the start of a long road for Puerto Rico toward the restoration of its credit, credibility, and competitiveness. The goal is access to investment capital, as well as to encourage the creation of jobs for our people, and improve their living standard.
After filing under Tittle III, every effort should be directed toward quickly embarking on the path of sustainable development by means of a Country plan that restores faith on ourselves.
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