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Governor
Alejandro Garcia Padilla said emergency fiscal measures in
response to a $70 billion debt were not sustainable and that
"Puerto Rico will not endure any more austerity."
He said a new law enacted by Washington allowing the federal
government to appoint a control board would undercut
self-government, but added it would help the island confront its
fiscal problems.
"Our challenges are not over and prosperity will not return
overnight," the governor said during a discussion at the
Brookings Institution, a think tank in Washington.
"It will take maybe two years until the market opens back to
Puerto Rico if we do the right thing," Garcia Padilla said,
adding the government had been producing fiscally sound budgets
that would help win back creditors. The island has been shut out
of debt markets for about a year.
Citing falling debt levels, he said it was a "moment of
opportunity" in Puerto Rico, which has struggled with high debt
loads and a weak economy for years.
Puerto Rico defaulted on $779 million of constitutionally backed
debt on July 1, among its most senior bonds, opting to pay for
essential services for its citizens over obligations to
creditors.
Garcia Padilla said the Puerto Rican government would take steps
on its own to get its fiscal affairs in order, therefore
minimizing meddling by the oversight board.
For example, he said that if the island's government passed
responsible budgets on its own, the control board would not need
to impose its own fiscal plans.
Garcia Padilla said, however, that while the government must
become more efficient to improve its fiscal situation, that
should be done through attrition rather than laying off workers.
Asked by a reporter about steps that could be taken to shore up
the Puerto Rico Electric Power Authority, or PREPA, and the
Puerto Rico Aqueduct and Sewer Authority, or PRASA, Garcia
Padilla said: "PREPA is pretty advanced. We'll be able to reduce
a lot the debt related to PREPA. We want to do the same with
PRASA. I think we'll be able to do it."
(Reporting by Richard Cowan; Additional reporting by Edward
Krudy; Editing by Chris Reese and Peter Cooney)
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