The Crisis in San Juan

What political changes will result from the government shutdown in Puerto Rico? Will people still want to remain a U.S. controlled island, or will there be growing calls for either statehood or freedom from the hands of Washington?

SAN JUAN, Puerto Rico (AP) – Puerto Rico faced a possible downgrade of its credit rating as political leaders remained deadlocked Sunday over how to resolve the island’s fiscal crisis seven days into a partial government shutdown.

The president of the U.S. Caribbean territory’s Government Development Bank, Alfredo Salazar, was expected to fly to New York on Sunday to meet with analysts at Moody’s Investors Service, who will begin to evaluate Puerto Rico’s credit rating – already on alert status – on Monday.

Puerto Rico, which Moody’s put on a watch list for a potential downgrade in late February, currently has a credit rating of “Baa2,” just two notches away from “junk” status. A downgrade would likely force Puerto Rico to pay higher interest rates for its bonds because it would signal that the island’s debt is a riskier investment.

Gov. Anibal Acevedo Vila and the opposition-dominated legislature continued to hash over possible solutions for the crisis on Sunday as hundreds of idled public employees and union officials protested outside the Capitol and the governor’s mansion.

The two sides have…

Posted by atrain
Ari Paul has written for The American Prospect, In These Times, Tikkun, Z, Punk Planet, openDemocracy.net, Reason and other newspapers and magazines. He is also a reporter for The Chief-Leader, a New York weekly covering labor in the city.

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