Loan sharks who lent to Puerto Rico’s government are demanding massive austerity after it defaulted on a payment for the first time last week.
Many ordinary Puerto Ricans could also lose out as saving and pension funds are hit.
The territory is governed by the US and uses the dollar as its currency. Like the weaker eurozone economies it has no control over its currency.
It can’t apply for bankruptcy to international bodies as it is not a sovereign country. But nor can it apply to the US as it is not a state.
Right wingers are blocking a proposed US law to change this.