NEW YORK (Reuters) - A working group established by Puerto Rico’s governor to undertake debt restructuring negotiations will start meetings Tuesday, the governor's office chief of staff said Monday.
Governor Alejandro Garcia Padilla said in a televised address last week that the island needed to renegotiate its debt to solve its fiscal problems.
The governor has since been meeting with different advisers to discuss the findings of a recently released report on its stability by former International Monetary Fund economists, as well as the government's next steps toward solving the fiscal crisis.
"During the past days, Government Development Bank President [Melba Acosta] and I have been holding meetings with external advisers on the three main objectives to be carried [by the working group]: the five-year fiscal stability plan, the beginning of debt renegotiation discussions, and the creation of a fiscal control board,” governor’s office Chief of Staff Víctor Suarez said.
Suarez said the first official meeting of the working group would be held Tuesday at the Government Development Bank.
The group includes Suarez, Acosta, and the presidents of the Senate and House, Eduardo Bhatia and Jaime Perello, Garcia Padilla said last week.
As part of his announcement, Garcia Padilla said the working group will have until Aug. 30 to deliver its final plan to address the recommended economic and fiscal reforms. The legislature is required to approve the plan.
Suarez said that although cash flow during July should allow the government to continue operations, the idea of reducing work days for public employees "hasn’t been completely dismissed."
"Right now, it is not contemplated," the chief of staff said, although he warned that "it would depend on monthly cash flow."
A key bill that will boost Puerto Rico's cash flow was signed into law Friday, the governor's office said, allowing the commonwealth to raise $400 million in Tax & Revenue Anticipation Notes (TRANs) from three public insurance corporations.
Suarez said Monday he expected the government to finish the $400 million TRANs financing before August.
Government Development Bank President Acosta said last week that besides this transaction, the commonwealth was also discussing with private banks short-term financing totaling about $400 million. However, she said "this could take more time, we are in negotiations."
Government officials have said Puerto Rico needs about $1.2 billion in cash to operate during the first months of fiscal 2016, which began July 1.
Reporting by a contributor in Puerto Rico; editing by Megan Davies and Christian Plumb