The Commonwealth of Puerto Rico, a United States territory located in the Caribbean, has defaulted on bond repayments to the government-owned Puerto Rico Public Financing Corporation (PFC), paying only $628,000 of the required $58 million. Most of these bonds are held by ordinary Puerto Ricans through local credit unions. In addition, the Puerto Rican government has suspended its scheduled monthly deposits to its general obligation redemption fund.

Puerto Rico is more than $70 billion in debt, and its economy continues to contract. Faced with economic uncertainty, many Puerto Ricans—who are United States citizens—have been leaving the territory and migrating to the mainland, breaking records that have stood since the 1950s. Like Greece, which defaulted on its obligations last month, Puerto Rico created this crisis by providing levels of government service that far outstrip its tax revenues. The situation has been exacerbated by a shrinking population and an under-performing island economy.

At earlier stages in the crisis, White House officials categorically stated that there would be no federal bailout of Puerto Rico.

Puerto Rico was ceded to the United States in 1898 following the end of the Spanish-American War, though—in violation of the Fourteenth Amendment—Puerto Ricans were not granted United States citizenship until 1917. It is a self-governing United States territory, subject to U.S. sovereignty and managed much like a state, but because it is not a state it does not have voting representation in Congress, nor does it participate in presidential elections. Puerto Ricans have repeatedly voted to continue as part of the United States, though in the most recent ballot they voted in favor of becoming a state. The U.S. Congress has not yet taken action on the request, and another referendum may yet be held.

Greece has defaulted on a €1.5 billion (about $1.7 billion) loan from the International Monetary Fund (IMF). It is the largest national default in history, and the first time a country with a ‘developed economy’ has ever defaulted on an IMF loan.

The Greek government, following decades of economic mismanagement and corruption, was hard-hit by the worldwide banking and economic collapse in 2008. It fell into a serious debt crisis in 2009, and subsequently received several bailouts and loans from the IMF and the European Union (E.U.). The Greek people, however, balked at stringent ‘austerity’ cuts in government spending imposed upon the nation by its creditors.

Greece’s refusal to accept any terms that would improve its long-term economic viability in return for additional bailout funding has made it unable to make its scheduled debt payments.

As its deadline loomed, Greek Prime Minister Alexis Tsipras (Syriza) suddenly announced that he would put the most recent European bailout offer to a national referendum, and has encouraged his countrymen to vote against it. A ‘no’ vote is likely to result in Greece being expelled from the Eurozone currency union. As the Greek economy continues to destabilize, its government has closed all banks and limited cash withdrawals to €60 (about $67) per person per day.