Debt… Greece and Puerto Rico

Economics, History, Politics

How many Puerto Ricos does it take to equal Greece’s debt? 5

As of today two different political leaders are in the public square shouting for help and clout in the midst of economic bankruptcy.

Greece is going to default on loans Wednesday because the payments are due but was given a five day reprieve so they could have a national vote, which seems ridiculous. Either the Leftist government is the government or just an empty puppet of popularism. Now, if they say ‘No,’ then they are out of the Eurozone. Both sides of the coin seem bias but here is a great read on the NO side. Considering it owes roughly $400bn to the ECB, European Banks, and IMF, this is going to hurt no matter how it turns out.   If the vote goes the way of a default, a Grexit would hurt the EU and multiple national economies. Daily Mail estimates on the British outcome are grim. Sadly, the more I read about this the more it seems like 2007 all over again.  At the same time the lenders put the money out there and took the risks. Of course to add in a little bit economic spice in the sense of Russia and its economic sanctions, Greece could withdraw and run to Russians for help. The Russian Finance Minister hinted as much in January. Of course there is no evidence that Russia would do such a thing, or is there. However, I can’t image that they somehow still wouldn’t want Greece as the Balkan satellite they never had, and of course there is always China.

Puerto Rico on the other hand is only $75bn in debt. Really! Of course sitting on the fence about becoming a state is now starting to hurt them in the bailout issue. Their special status limits access to US bonds and also requires Congressional intervention approval. Even the White House has said no to a bailout. The shocking honesty of the Governor Padilla is what strikes me as being genuine and also disheartening. For all intents and purposes he has “tried” to make some economic changes but these have been slow and essentially ineffective thus far. Additionally an exodus of young talent to the mainland has drastically damaged viable labor pools and possible entrepreneurial investments. His coordinated trade polices with Colombia are very interesting and as Cuba begins to fold back into a psuedo-American sphere, one can only wonder what PR can do.