García Padilla unveils the “roadmap” to face the debt

On September 9, 2015, Governor Alejandro García Padilla presented in a recorded message the Plan de Crecimiento Económico y Fiscal (PCEF) delivered by the Grupo de Trabajo para la Recuperación Fiscal y Económica (Gtrfe), calling it a “roadmap” to restructure public debt with creditors at the table, Primera Hora reported.

García Padilla said he would name a team of experts to negotiate and send legislation for a local fiscal-control board to track the plan. He acknowledged that “even implementing all measures in the fiscal plan would not be enough” and warned: “if creditors are not willing, we will have no alternative but to proceed without them.” Choosing between paying a creditor, a teacher, a police officer or a nurse, he said, would be a decision he would rather not make.

The plan was posted that morning on the Government Development Bank (GDB) portal. The Associated Press reported that it aims to address much of the roughly $72 billion public debt and restructure a portion with bondholders. The five-year horizon covers only $47 billion of territorial debt and leaves out the Puerto Rico Electric Power Authority (PREPA) and the Aqueduct and Sewer Authority (AAA).

Working-group members warned that GDB would run out of money by late 2015 without action, and that the government could lack liquidity the following year without the plan. They propose a five-member board appointed by the governor (with creditor and possibly federal input), a 10-year freeze on minimum-wage hikes for youth, more public-private partnerships, subsidy cuts to municipalities and UPR, and more school closures. They also demand equal federal treatment in Medicaid/Medicare, a permanent Act 154, and an orderly legal framework for obligations. A roadmap ≠ federal certification or adjudicated default.