The inside story of Puerto Rico's municipal debt restructuring and bankruptcy crisis—the largest in US history—and how Congress resolved it
Cold War tax incentives helped Puerto Rico to develop its economy. However, these incentives were phased out beginning in 1996, and the island slid into a recession a decade later. After years of stagnation, emigration of a large part of its population, and continuous fiscal deficits, Puerto Rico's governor announced in 2015 that it could not pay $73 billion in debt. But Puerto Rico could not use the bankruptcy tools available to every US state.
The Road to PROMESA is the inside story of the largest municipal debt restructuring in US history and the unusual law Congress wrote to resolve it. In 2016, Congress passed the Puerto Rico Oversight Management and Economic Stability Act (PROMESA), which allowed the Commonwealth to restructure its debt while protecting pensions but severely straining vital services. It also placed a federally appointed board over the island's finances, suspending a large part of its fiscal sovereignty.
This book brings together the people who were in the room: the governor, his treasury secretary and advisers, the federal officials who drafted PROMESA, and the lawyers and economists who argued for it in court and in Congress. Their first-hand accounts and analyses of this landmark case will be an enduring reference resource on debt, sovereignty, and the cost of solvency for scholars, practitioners, and students alike.
About the Author
Antonio García Padilla is past president of the University of Puerto Rico and served as adviser to the governor.
Melba Acosta-Febo is former Secretary of the Treasury of Puerto Rico.
Juan Lara is a professor of economics and former economist to the Government Development Bank for Puerto Rico.
