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Puerto Rico governor says fiscal challenges not over

WASHINGTON (Reuters) – Puerto Rico, the troubled U.S. Commonwealth that recently declared an historic default, could be shut out of debt markets for another two years as it battles with fiscal challenges, Governor Alejandro Garcia Padilla said on Tuesday.

Padilla said emergency fiscal measures were not sustainable and that “Puerto Rico will not endure any more austerity.” He criticized legislation allowing the federal government to appoint a control board for undercutting self-government but said it would help the island confront its fiscal problems.

“Our challenges are not over and prosperity will not return overnight,” he told an event at the Brookings Institution in Washington.

But citing falling debt levels, he added that now is a “moment of opportunity” in Puerto Rico, which has struggled with high debt loads and a weak economy for years, eventually declaring a default on top-rated debt earlier this month.

Puerto Rico defaulted on $779 million of constitutionally-backed debt on July 1, among its most senior bonds, opting to pay for essential services for its citizens over obligations to creditors.

Padilla said that while there was work to be done in consolidating government agencies, that did not necessarily mean cutting more government jobs.