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WORLD NEWS Wednesday 16 March 2022
Puerto Rico exits bankruptcy after grueling debt negotiation

By DÁNICA COTO ing the island's power grid
SAN JUAN, Puerto Rico (AP) and causing billions of dol-
— Puerto Rico's govern- lars in damage.
ment formally exited bank- The island is still trying to re-
ruptcy Tuesday, complet- cover from the hurricane as
ing the largest public debt well as a series of powerful
restructuring in U.S. history earthquakes that struck its
after announcing nearly southern region starting in
seven years ago that it was late 2019. The coronavirus
unable to pay its more than pandemic also has been a
$70 billion debt. serious setback.
The exit means that the U.S. Still unresolved are the
Caribbean territory's gov- bankruptcy proceedings
ernment will resume billion- for the $5.8 billion in debt
dollar payments to bond- held by Puerto Rico's High-
holders for the first time in ways and Transportation
several years, settle some Authority and the Electric
$1 billion worth of claims Power Company, which
filed by residents and lo- owes $9 billion, the largest
cal businesses and issue debt of any government
more than $10 billion worth agency.
of bonds. The government In early March, Puerto Ri-
also will restore up to $1.3 co's governor announced
billion taken from a public In this July 29, 2015 file photo, the Puerto Rican flag flies in front of Puerto Rico's Capitol as in San he was canceling a debt
pension system. Juan, Puerto Rico. restructuring deal for the
"This is a significant suc- Associated Press power company, saying
cess," said Natalie Jaresko, that worsening inflation,
executive director of the budgets, a feat that has The plan also creates a ment and excessive bor- surging oil prices and other
federal control board that yet to be achieved. public pension reserve trust rowing. The U.S. Congress factors had changed sig-
oversees Puerto Rico's fi- The debt restructuring plan that will be funded with created the federal board nificantly since the deal
nances and its debt restruc- was approved by a federal more than $10 billion in up- in 2016, a year after the is- was negotiated with credi-
turing process. "Remaining judge in January. It reduces coming years. land's government said it tors in 2019.
in bankruptcy has been a claims against Puerto Rico's "For decades, past govern- was unable to pay its debt. Jarekso said the board ex-
drag on the economy in government from $33 bil- ments have neglected to In 2017, Puerto Rico's gov- pects to soon renew nego-
multiple ways." lion to just over $7.4 billion, put aside enough money," ernment filed for the larg- tiations, mediation and dis-
The bankruptcy led to with 7 cents of every tax- Jaresko said. est municipal bankruptcy cussion with all those who
widely criticized austerity payer dollar going to debt While many celebrated in U.S history. Months later, bought bonds issued by the
measures on an island that service, compared with 25 Puerto Rico's exit from Hurricane Maria struck, raz- power company.q
paid some $1 billion in fees cents previously. bankruptcy, Jaresko said it
to consultants and lawyers "This is a transcendental is unlikely the island will be
and in other expenses dur- moment," said Gov. Pe- able to access financial
ing the process. dro Pierluisi. "The plan is not markets soon because it
The exit was a priority for perfect ... but it has a lot of has yet to get its audited
the board and Jaresko, good things." financial statements up to
who previously announced The board has clashed sev- date.
she is retiring April 1. A re- eral times with Pierluisi and Puerto Rico accumulated
placement has not been previous administrations, more than $70 billion in
named yet. The board particularly on a proposal public debt and more than
is expected to remain in to reduce certain monthly $50 billion in public pension
place until Puerto Rico has pension benefits that was liabilities through decades
four consecutive balanced ultimately scrapped. of corruption, mismanage-

Red-orange Sahara dust coats Spain,

makes it hard to breathe

By JOSEPH WILSON coast as "extremely unfa- western Germany.
Associated Press vorable" — its worst rating. On Tuesday, the dust storm
BARCELONA, Spain (AP) Spain's weather service de- spilled over into neighbor-
— Hot air from the Sahara scribed the dust storm from ing Portugal.
Desert has swirled over the the Sahara as "extraordi- Many Spaniards awoke to
Mediterranean Sea and nary and very intense," find a layer of red-orange
coated Spain with red-or- while adding that it was un- dust covering their terrac-
ange dust, prompting au- clear if it was the worst epi- es, streets and cars. The sky
thorities to issue extremely sode of its kind on record. in the capital and other cit-
bad air quality warnings Spain's weather service ies had a gritty tinge. Visibil-
Tuesday for Madrid and a forecast that the dust will ity in Madrid and cities like
large swath of the country. continue to accumulate Granada and Leon was
The national air quality in- through Wednesday and reduced to 2.5 miles (four
dex listed the capital and could reach as far north as kilometers), the weather
large parts of the southeast the Netherlands and north- service said.q