US

Puerto Ricans protest on May Day as debt deadline nears

Thousands of protesters blocked roads and marched in Puerto Rico's capital Monday to vent their anger over a decade-long economic crisis and looming austerity measures.

The May Day demonstrators denounced the U.S. Caribbean territory's leaders, blamed a federal control board overseeing its finances for their economic troubles and demanded an audit to identify those responsible for running up a $70 billion public debt load.

"I'm on coupons, and things are bad," said 55-year-old Blanca Catala, who was laid off nine months ago from her job at a packaging plant. "I was embarrassed to have to start selling water on the street."

The demonstration began peacefully, but toward the end police launched tear gas and smoke bombs and used pepper spray against a small group of protesters who broke several windows of a bank using a pipe and a skateboard. Some in the crowd burned U.S. flags.

"Ricky is selling the island!" demonstrators yelled in reference to Gov. Ricardo Rossello, whose administration is expected to announce soon whether it has reached a deal with bondholders to restructure a portion of its debt or embrace a bankruptcy-like process.

The protests affected services at Puerto Rico's largest public hospital, paralyzed the bus system and forced many businesses to close. Demonstrators also briefly blocked traffic near San Juan's international airport, prompting some travelers to walk along the highway dragging suitcases.

Juanita Morales Rosa, a 65-year-old retired teacher, said she depends on a public pension system that is expected to run out of money this year and faces a more than $40 billion deficit.

"How are we supposed to find work at 65 years old?" she said. "There is no work."

Unemployment on the island of 3.4 million people has hovered around 12 percent, and nearly half a million Puerto Ricans have moved to the U.S. mainland in the past decade, many in search of jobs and economic opportunity.

Puerto Rico is struggling to emerge from a recession caused in part by previous administrations that for decades borrowed billions of dollars to cover budget deficits.

In 2015 the island's then-governor announced that the debt was unpayable, and the territory has since racked up multimillion-dollar defaults on government-issued bonds. That sparked a flurry of lawsuits from creditors.

Last year the U.S. Congress approved a rescue package that led to the creation of a federal control board charged with overseeing Puerto Rico's finances. In recent weeks the board and Rossello have been approving austerity measures aimed at cutting costs.

Puerto Rico is preparing to cut public employee benefits, increase tax revenue, hike water rates and privatize government operations, among other things.

The measures have angered many who say the working class has been hit the hardest, and Monday's protests came hours before a midnight deadline for the expiration of a mechanism of that has protected the government from creditor lawsuits.

Negotiations on restructuring part of the debt are continuing, said Elias Sanchez, the governor's representative to the board.

"We are committed and working on a genuine effort to reach an agreement with bondholders, but we're not dismissing any other course of action," Sanchez said.

On Saturday the government offered to pay 50 cents on the dollar to holders of general obligation and sales-tax bonds that are backed by Puerto Rico's constitution. Bondholders dismissed the offer.

Puerto Rico got a brief respite in the form of $295 million earmarked to ease its Medicaid burden as part of a more than $1 trillion federal spending bill approved Sunday in the U.S. Congress. Democrats had sought some $500 million, but obtained more than Republicans had initially offered.

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Associated Press reporter Andrew Taylor in Washington contributed to this report.