Puerto Rico has been facing an extreme financial crisis for years, and it has finally reached a tipping point.

On Friday, the unincorporated U.S. territory’s Gov. Alex Garcia Padilla issued an executive order to suspend almost $2 billion in debt payments. The move comes just a day after President Obama signed a bipartisan bill to put Puerto Rico’s finances under the oversight of the federal government. Nick Brown of Reuters reports:

The flurry of activity represents the nadir of a decade-long struggle by Puerto Rico, home to 3.5 million Americans, to stave off economic collapse, reverse a 45 percent poverty rate and stem rampant emigration that exacerbates the economy’s decline.

Garcia Padilla authorized the suspension of general obligation payments under a previously enacted local debt moratorium law that has already been challenged by a creditor lawsuit filed in U.S. District Court in Manhattan. …

In Washington, Obama signed the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, in the Oval office on Thursday, one of the few pieces of bi-partisan legislation to make it to his desk. …

PROMESA, which passed the U.S. Senate on Wednesday, puts a stay, or halt, on litigation in the event of a default. Puerto Rico has already defaulted three times on portions of its debt in the last year.

Promesa also “gives Puerto Rico the power to unilaterally reduce its debts, something that a debtor can normally do only in bankruptcy,” The New York Times adds. “Federal law explicitly bars all branches of the Puerto Rican government from entering bankruptcy, the way many mainland cities and counties could if they were in the island’s position — and here, that exclusion is seen as a slap in the face.”

It’s unclear how the legislation will impact the market once enacted. “Creditors have raised concerns that the federal legislation removes any urgency for the territory to continue good-faith efforts to make payments,” states The Wall Street Journal. However, it seems the true victims of the island’s default are its people.

As Obama signed Promesa, many residents of the island took to the streets to protest what they view as a reinstatement of colonial forces over Puerto Rico, and the governor’s executive order came shortly after the unrest began. Below, some direct evidence of the protests:

???? AHORA: Piquete masivo en la Avenida Chardón contra la aprobación de #PROMESA. ¡NO A LA JUNTA COLONIAL! #MovilízateJuventud ????

A photo posted by Juventud Trabajadora – PPT (@juventudtrabajadora) on

Marchando contra La Junta de Control Fiscal. #LuchaSiEntregaNo

A video posted by Yarey Torres (@yareytorres) on

Despite this outright negative reaction, the situation is much more complicated than it appears. Mary Williams Walsh of The New York Times writes:

But beneath the defiant rhetoric — on the Puerto Rican talk shows, at labor rallies and at an “Occupy” vigil at the federal courthouse here — there was also resignation: an awareness that Puerto Rico’s own elected officials had let the island slip into a death spiral, and that the passage by the United States Senate on Wednesday of a bill meant to assert federal authority was really the only available solution.

This sentiment is echoed in a debate between Eric LeCompte, a supporter of the Promesa bill, and José La Luz, a labor activist who opposes the legislation. “The legislation has to pass in order to stop the humanitarian crisis,” says LeCompte. “You, my friend, will have blood on your hands if this results in the kind of unrest that we witnessed in the 1970s,” La Luz fires back, “because I will tell you with every certainty that the people in Puerto Rico, once they discover the serious implications of this, will not tolerate it.” You can watch the full debate, aired Thursday on “Democracy Now!,” below:

—Posted by Emma Niles

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