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Pedro da Costa: What kind of debt restructuring would be appropriate for the island now?
Martin Guzman: My computations pre-Hurricane Maria show that Puerto Rico needed a reduction of the face value of its public debt in the order of 80%-90% to restore debt sustainability. The hurricane brings the need for an even deeper restructuring. Trump’s claim that the entire debt needs to be wiped out is sensible in this context. Otherwise, the country will enter into an even more severe, long-lasting depression.
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