Puerto Rico’s debt problems have brought comparisons to Detroit and Greece, but a recent rating downgrade hardly fazed muni bond investors. That’s partially because the possibility of a default had already been priced in, but also because concerns about the US territory’s access to debt markets were being raised at the same time that financing was being organized (a deal with the Royal Bank of Canada (NYSE:RY) (TSE:RY) was announced a few days after S&P downgraded Puerto Rican debt to junk status).

wilbur ross Puerto Rico

Wilbur Ross, speaking to Bloomberg, raises the exact opposite question: could Puerto Rico be the next Ireland?

“I think the Puerto Rico government is doing exactly what it should be doing,” said Ross. “It’s fixing itself and I think in some ways following the same playbook that Ireland did… It’s unfortunate that strong medicine is needed, but they have to regain access to the public debt markets just as Ireland did. And I think they will.”

Puerto Rico following the Irish game plan

BTIG analyst Mark Palmer digs deeper into the comparison, and the similarities are striking. Before the IMF-EU bailout, Ireland had 15.1% unemployment and a 91.2% debt-to-GDP ratio; Puerto Rico has 14.7% unemployment and a debt-to-GDP ratio of 93%.

“Ross pointed to the Puerto Rico government’s tax increases, pension reform and cap on government employment as positive steps. Those moves were not dissimilar from the package of expenditure cuts and tax increases that Ireland had put in place,” writes Palmer.

Ireland is one of the biggest success stories of the recovery, paying back the IMF-EU bailout in December with strong enough prospects that the country is no longer getting grouped in with the EU periphery (Greece, Italy, Spain, Portugal) as it was a few years ago.

Could the IMF back Puerto Rico?

Ross also asked why the IMF or the US (which is the IMF’s main backer) couldn’t directly intervene in the situation. “Wouldn’t it be weird to bail out Greece and Ireland and Portugal and other peripheral countries in Europe and let Puerto Rico go down? It makes no sense to me,” said Ross.

The federal government could be worried about setting a precedent of backing local debt, and the IMF usually deals at the national level instead of getting involved with municipalities, but others have brought up the idea of IMF involvement in recent weeks, so it’s impossible to write the idea off altogether.