Deal To End Puerto Rico Crisis Shaky

A deal to end Puerto Rico's fiscal crisis could unravel if the House does not approve the U.S. territory's bailout legislation, Gov. Anibal Acevedo Vila said Friday.

Inside the Capitol on Friday evening, lawmakers were still considering legislative measures needed to finance a loan to cover government expenses for the remainder of the fiscal year and allow more than 100,000 furloughed public employees to return to their jobs Monday.

"What we lack now is the approval of legislation that I can sign so we can all return to work," Acevedo said during a radio address.

An agreement announced late Wednesday called for an emergency loan to cover a $740 million budget deficit that would resolve a partial government shutdown that crippled government services and hurt businesses in this U.S. Caribbean territory. The accord, reached by a special binding commission, left several key issues up to legislative approval.

Puerto Rico's political leaders have not answered questions about the details of the plan, including how they intend to repay the loan and whether it includes the island's first sales tax — a measure that had been at the center of the debate between the governor and the opposition-dominated legislature.

Assuming the loan is approved as the island's politicians have pledged, government workers can resume working Monday — and receive pay for the days they missed since the shutdown began on May 1. Some officials, such as Treasury Secretary Juan Carlos Mendez, said the furloughed workers would probably have to be paid out of their accrued vacation time.

If all goes according to plan, about a half-million students will return to class Monday when the nearly 1,600 public schools plan to reopen.

The partial government shutdown has rippled through Puerto Rico's economy, with hotels, shops and restaurants reporting a drop in business as thousands of government workers tried to get by on unemployment benefits of up to $133 per week.

The shutdown also spurred New York-based Moody's Investors Service to cut the rating of the territory's general obligation bonds to one notch above junk status — affecting about US$25 billion (euro20 billion) of government debt.

Puerto Rican economists said the shutdown has not produced savings for the treasury since the government will have to pay overtime to police officers that worked security details during daily protests, among other reasons.

"It is not going to produce a savings. Everything seems to indicate that," economist Francisco Catala told The Associated Press on Friday.

Economist Luis Benitez said the shutdown did not save the government money — or result in extra costs. "In my opinion they remained equal," he said.