Puerto Rico to the US for help against financial crisis

San Juan Puerto Rico. - Puerto Rico on Tuesday prevented a default of several million dollars to announce at the last minute a payment bond, but warned that a worsened financial crisis has forced the government to divert money that would be used for future debt payments In order to avoid a paralysis of basic services.

The announcement of the Government Development Bank for Puerto Rico while the governor was Alejandro García Padilla testified at a hearing before the Committee on Legal Affairs of the US Senate that the island was facing a liquidity crisis.

"Let's be clear: we no longer is effective," he said. "This is a distress call from a ship 3.5 million Americans who have been lost at sea." Garcia signed an executive order allowing the Treasury to retain certain revenues island several pubic agencies to pay the debt of 72,000 million dollars and ensure continuity of essential services, including health, education and public safety.

Officials said they expected to be diverted to $ 329 million until June to pay the debt. Melba Acosta, president of the Development Bank, said most of the agencies whose income is being diverted continue to have sufficient funds to cover other upcoming debt payments.

Among the agencies affected are the heavily indebted Highway and Transportation Authority, the Authority Infrastructure Financing and the Metropolitan Bus Authority.

"We hope that today serves as a clear indication that we intend to fulfill our obligations to the extent possible without disrupting essential services," Acosta said. However, the overall fiscal position of Puerto Rico "remains weak".

Acosta said authorities will continue to meet with creditors to discuss restructure a portion of 72.000 million debt of the island that the governor says it is priceless.

Cesar Miranda, secretary of Justice of Puerto Rico, admitted that some might see as far Puerto Rico as a technical breach of payments, since the government is diverting money for future scheduled bond payments.

In Tuesday's hearing in the commission of the US Senate, some senators warned that Puerto Rico needs to take concrete steps to organize your finances.

"The financial somersaults and stunts must end," said Sen. Richard Blumenthal. Garcia's government is seeking access to Chapter 9 bankruptcy law as the battle island out of nearly a decade of recession. Victor Suarez, Secretary of State of Puerto Rico, said the island is running out of options to generate money and meet its debt payments if the US Congress does not allow the process of bankruptcy protection.

"If you fall in missed payments, have catastrophic consequences," he added. The Obama administration proposed a plan to help the island, but Republicans in Congress said they want to attack first the causes of the crisis and see more data on the financial status of Puerto Rico.

"Merely extend the authority to restructure the debt, without the tools to address the root causes of the fiscal problem, it is not a long term solution to help Puerto Rico," said the head of the Legal Affairs Committee, Republican Charles Grassley