Historic takeover of Puerto Rico finances begins
A federal control board on Friday took over Puerto Rico's finances and several government agencies for the first time in the United States territory's history in a bid to haul the island out of an acute economic crisis.
The seven-member board met in New York and was briefly interrupted by protesters who yelled, "This is slavery!" and "Stop pillaging Puerto Rico!"
The meeting was livestreamed over the Internet following pledges that the board would operate with transparency.
It ordered Governor Alejandro Garcia Padilla to produce a fiscal plan in two weeks and submit weekly and monthly revenue reports that detail how the government is adhering to its budget.
Members also voted on which Puerto Rico government agencies would come under the board's oversight. They include the island's central government, its largest public university, its heavily indebted utility companies, a Government Development Bank that is running out of cash and a public pension system underfunded by more than $40 billion.
"We're working as quickly as possible," said JosÈ Carrion III, who was elected board president, to reporters after the meeting.
The board was approved by Congress in June and is charged in part with helping restructure a portion of a nearly US$70 billion public debt that Garcia has said is unpayable. Carrion is one of four Republicans on the board, along with three Democrats. Also on the board is a representative of Puerto Rico's governor, who is barred from voting.
Puerto Rico economist Gustavo Velez said the board will likely soon seek help from the capital markets to generate revenue.
"If it doesn't, then it will have to impose severe austerity measures," he said. "There is no other way to finance the deficit. The government likely will not be able to pay salaries very soon. We're in a downward spiral."