Puerto Rico laid out a new plan of spending cuts and revenue increases Wednesday aimed at slashing its $72 billion debt burden.
But the plan will still leave the US Caribbean island territory with a $14 billion financial shortfall that could require creditors lenders to take a writedown on their bonds.
"The massive public debt of Puerto Rico is a barrier to growth," said Governor Alejandro Garcia Padilla.
"It is time for the creditors to come to the table and share the sacrifice."
The plan, by the governor's Working Group for the Fiscal and Economic Recovery of Puerto Rico, was aimed at convincing creditors to enter new talks on resolving the financial crisis, which has led to the island being labelled "America's Greece".
It detailed a package of labor and tax reforms to encourage hiring and investment, a plan to implement a value added tax to increase tax collections, and cuts to government spending and subsidies.
In all, that could amount to trimming $11.9 billion from the current $27.8 billion funding shortfall through 2020, the plan said.
If the government is successful in returning the island to economic growth, another $1.9 billion can be trimmed from the shortfall.
But that will still leave the government in need of some $14 billion to make good on debt and other commitments.
The plan says that requires a "consensual compromise" by creditors "in order to avoid a disorderly default" that would "further destabilize the Commonwealth’s economy and finances."
One government agency already missed a small bond payment last month and the plan warns that the government's financial resources are running very thin.
But US law does not allow the territory's government to declare bankruptcy, as some US cities have done, to force negotiations with creditors.