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Maybe the current GOP public relations lovefest for the Vice Presidential campaign of Puerto Rican Goveror Luis Fortuño should start subscribing to elnuevodia.com, the island’s largest newspaper, and hire Spanish-speaking readers. Their one-sided glowing reviews of the Fortuño administration might actually be more balanced.

Case in point, today’s news out of Puerto Rico includes a report that suggests that Puerto Rico is quickly spiraling into another Greece. Here is the link in Spanish, but for our English readers, we have provided our translation of the article:

Puerto Rico’s indebtedness of and the insolvency of its pension plans have become so large that there is no alternative but to restructure the debt with its bondholders.

That’s the conclusion of a detailed report prepared by the firm Wasmer, Schroeder & Company (WSC), in which the firm specializing in fixed income assets contends that the status of Puerto Rico is so bleak that the island is closer to the crisis in Greece, Spain, and Portugal than to the 50 states of the Union.

In financial terms, restructuring means that Puerto Rico would not pay the entire principal that it has borrowed, the interest it agreed to pay or a combination of both.

The firm, which manages about $ 4 billion in assets, circulated the report to several of its customers and financial advisers last month.

The President of the Government Development Bank (GDB), Juan Carlos Batlle, sharply disagreed sharply with the report.

Two Drops of Water

According to the firm, there are many similarities between Puerto Rico and Greece, Italy, and Spain, which the report describes as “weak European economies, among them: insolvent pension plans, high unemployment, and poor management in the collection of revenues into the treasury.

Of all the similarities, however, the debt level would be the most alarming indicator, according to the report.

WSC estimated that is one were to divided the central government debt by the population of the island, every Puerto Rican owes about $ 7,837. Meanwhile, the island’s per capita income would be at about $ 13.675. Percentage-wise speaking, this means a debt ratio of 57.3% to income.

If the calculation considers other $ 28 billion of debt issued by public corporations and municipalities, each Puerto Rico would owe about $ 17, 265 in debt.

As Indebted as Portugal

“(The figure) aligns more with Portugal, near to that of Spain, and well above the lowest per capita income in Puerto Rico,” said WSC.

The per capita debt of Portugal, as WSC states, is about $ 16,402. In Spain it is estimated to be $ 17,539.

However, this indicator in states like New Jersey would be about $ 3,669, in Hawaii it would be around $ 3,996 and in Connecticut, the debt per capita would be in the vicinity of $ 4,859. Percentage-wise speaking, the debt of these states in proportion to income per capita would be 7.2%, 9.6% and 8.8%, respectively.

The firm estimates would be higher if one considers that WSC did their numbers based on a total debt of around $ 64 billion

On November 20, El Nuevo Dia outlined that public debt was about $ 65.5 billion.

That figure, as a proportion of Gross National Product (GNP) could be equal or exceed the size of the local economy. This means that the debt of the Island in relation to GNP, could range between 92% and 100% or more, something that the research identifies as a serious economic burden for the development of any society.

Poor Reputation

“Despite having a conservative governor in fiscal terms, the history of Puerto Rico is tainted by cronyism and irresponsible fiscal decisions,” the firm said.

He added that unless the debt is reduced or the island’s economy grows faster than debt, Puerto Rico is aimed at a “critical moment” for its finances before the end of this decade. At this juncture, in light of fiscal conservatism “rampant” in the federal capital, it would be “unlikely” that the US Congress would help the island. So, if the situation does not improve “materially and fast,” the island would be in serious trouble and the U.S. municipal debt market may face “a significant credit hurdle,” said WSC. Puerto Rico’s debt has grown at a rate of 9% annually in recent times. Meanwhile, the Puerto Rican economy has shrunk almost 12% since the start of the recession.

The BGF Refutes Findings

“It is clear that we have to keep working,” Batlle said when asked about the report.

“In 2009, we indeed were on the path to being Greece,” admitted the banker. “But we have succeeded in keeping Puerto Rico from falling off the cliff,” Batlle said, referring to the period when the island lost access to capital markets by the growing fear of degradation.

Batlle preferred to emphasize that the report acknowledges the progress of the fiscal reforms that the Fortuño administration has implemented. In response to questions about the possibility of restructuring the island’s debt, Batlle said it will not be necessary if they continue to apply that fiscal discipline measures have already been implemented.

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A social media movement that began in Spain last week and calls for non-violent political change in Spanish-speaking countries has spawned hundreds of similar demonstrations throughout the world.

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Boston: a demonstration will be held at noon on May 21 on the front steps of The Boston Public Library in Copley Square. Follow #acampadaboston on Twitter for updates.

New York City: a demonstration will be held at 12:30 pm on May 21 in Washington Square Park. Follow #acampadaNY on Twitter for updates.

Washington, DC: a demonstration will be held at 7pm on May 21 in Dupont Circle.

Chicago: a Facebook event from 2-5 pm will happen on May 21. Location to be determined. Follow #spanishrevolution on Twitter.

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