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U.S. presidential hopeful Hillary Clinton said Tuesday that Puerto Rico should have access to U.S. bankruptcy rules in order to restructure the country's debt load.
The statement comes a week after Puerto Rico made a successful payment on its debt amid widespread expectations of a default. Ahead of the payment, Puerto Rican authorities said they see bankruptcy as a viable option for restructuring the country's burdensome US$72 billion in debt, as years of economic struggle are coming to a head in a dire fiscal situation.
RELATED: Puerto Rico's Debt Payments Cannot Stave Off Impending Financial Crisis
"Congress and the Obama administration need to partner with Puerto Rico by providing real support and tools so that Puerto Rico can do the hard work it will take to get on a path toward stability and prosperity," Clinton said in a statement.
Although Puerto Rico is a U.S. territory, it is not eligible to file for bankruptcy; legally that option is only open to U.S. municipalities and cities.
Much of Puerto Rico’s debt is held by individual investors on the United States mainland, in mutual funds or other investment accounts.
"As a first step, Congress should provide Puerto Rico the same authority that states already have to enable severely distressed government entities, including municipalities and public corporations, to restructure their debts under Chapter 9 of the Bankruptcy Code,” Clinton said.
The White House said last week that Congress could “take a look at” Puerto Rico's calls for the U.S. to allow it to file for bankruptcy, but U.S. officials said they would not be willing to bailout the cash-strapped Caribbean island.
Clinton also stressed that a bailout is not an option.
"We're not talking about a bailout, we're talking about a fair shot at success," Clinton said.
Puerto Rico's fiscal crisis comes amid an ongoing independence movement seeking to break with the U.S. and transform the island’s political system.
RELATED: Puerto Rico's Debt Options 'Limited' Compared to Greece
Talk of bankruptcy in the face of a crippling debt load also comes as Greece re-enters negotiations with the eurozone, prioritizing debt relief in the wake of a loan default and a “no” vote in the referendum indicating the Greek people reject another austerity.
Puerto Ricans can vote in presidential primaries, which are run by parties, but cannot vote in presidential elections.
RELATED: Puerto Rican politician Rafael Bernabe on the island’s debt and similarities with Greece
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