Hedge Funds Urge Puerto Rico to Close Schools, Pay Back $5.2 bn

© AP Photo / Ricardo ArduengoIn this May 4, 2012 photo, the flags of Puerto Rico and the U.S. wave behind an English one-way traffic sign in Guaynabo, Puerto Rico, one of only a few places in Puerto Rico with street signs in English
In this May 4, 2012 photo, the flags of Puerto Rico and the U.S. wave behind an English one-way traffic sign in Guaynabo, Puerto Rico, one of only a few places in Puerto Rico with street signs in English - Sputnik International
Subscribe
US
India
Global
Puerto Rico has never been so close to announcing financial default and a financial crisis may hit the country as hedge funds are calling on the country to cut its public spending to pay back billions of US dollars it owes in debt.

Thirty-four hedge funds have asked the Puerto-Rican government to lay off teachers and close schools because of ‘massive overspending on education’ despite that the country spends 21% less on US average per student and has already closed 100 schools.

Puerto Rico should be given similar bankruptcy safeguards to other US municipalities - Sputnik International
Puerto Rico Deserves Same Bankruptcy Support as US Cities - Bernie Sanders
The countries’ education system will experience tough days if the government makes concessions with billionaire hedge funds to drastically decrease public spending on education, impose severe tax reforms, and sell $4bn worth of public buildings.

Three economists Jose Fajgenbaum, Jorge Guzmán and Claudio Loser who currently work for a global strategic and policy advisory firm, blamed Puerto Rico of spending too much money on education.

The former researchers and economists from the IMF, hired by hedge fund managers, conducted an analysis to find out how to deal with the crisis Puerto Rico faces, following an announcement by Governor Alejandro Garcia Padilla that Puerto Rico could not pay its $73 billion debt and would soon run out of money to operate the government.

Their report, called “There is a Better Way,” states that the island faces a deficit problem, not a debt problem, which is “fixable and requires fiscal adjustments,” while dismissing the Governor’s ability to solve the problem naming it as a “risky.”

The US territory of Puerto Rico spends $8,400 per student, however, the US national average exceeds $10,667.

Another IMF former employee Anne Krueger suggested in a report by the Puerto Rican government  that debt restructuring was the only way for Puerto Rico to solve the crisis.

Earlier Moody’s stated the possibility of default as well as restructuring of debt obligations creates doubts that bond holders will be paid in full on a number of Puerto Rican debts and utility bonds.

Newsfeed
0
To participate in the discussion
log in or register
loader
Chats
Заголовок открываемого материала