By sending to the US Senate the nomination of the current seven members of the Oversight Board, President Donald Trump brings stability and certainty to the process of balancing local public finances, a vital step for the development of Puerto Rico.
The appointments also imply a vote of confidence to the entity created by PROMESA to solve the serious indebtedness of the island, under the protection of efficient and sustainable government management.
The appointments of the members of the Board last for three years, so the term of the current members would expire in August. The White House has rightly allowed the entity to continue implementing provisions to ensure their work under PROMESA, including an orderly transition of its operations, should the federal government subsequently appoint new members.
An unforeseen interruption would have aggravated the uncertainties that Puerto Rico must clear. It would also have delayed far-reaching efforts to alleviate the island's financial crisis.
Last February, the Boston First Circuit Court of Appeals invalidated the appointments made by former President Barack Obama and Congress because they were not submitted to the advice and consent of the U.S. Senate, violating the U.S. Constitution.
However, the First Circuit maintained the validity of PROMESA. The Court gave President Trump until May 16 to confirm or reconstitute the Board. Judge Juan R. Torruella´s decision also ratified the Board´s decisions.
Meanwhile, the Board can see their way clear to give continuity to priority actions for the island, such as the approval of the new Fiscal Plan and the certification of the budget that begins July 1. According to the Board´s new schedule, they plan to certify the new fiscal plan by May 9. They have also established a new schedule for budget evaluation, review and certification.
The future of other recommendations made by the Board for a government restructuring that responds to Puerto Rico´s fiscal reality, and lays the groundwork for the economic reactivation is also pending.
This agenda requires dialogue and openness between the local government and the Board to achieve PROMESA´s mandate of restoring fiscal responsibility and market access.
Negotiations and other measures related to creditors and bondholders of the central government and the Puerto Rico Electric Power Authority (PREPA) are also in progress. In this line, the Board has sought approval to void $ 6 billion in general obligation bonds.
This is an opportune moment for different groups of creditors, the Board and local authorities to firmly embrace conversations that bring solutions to the crisis.
Following the presidential nomination of the current members, it would be desirable for the Senate to swiftlyconfirm the appointments before Congress´s summer recess. Meanwhile, the Board's work to implement PROMESA will be examined at a hearing scheduled for Thursday in the House Committee on Natural Resources.
Trump´s decision comes as the right one amid Puerto Rico´s current fiscal and economic situation, peppered with suspicions from the federal government and the electoral climate on both fronts. Puerto Rico must respond with a responsible management of its own resources and of federal reconstruction funds.
The continuity of the Board ensures calm and continuity in the mission to establish mechanisms that will balance public finances, and will lead to debt restructuring in order to get Puerto Rico out of its prolonged economic stagnation.
