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Labor Market

Portuguese unions launch austerity strike

A general strike called by Portugal's trade unions has brought the troubled eurozone nation to a virtual standstill. Workers oppose budgetary cuts agreed between its new center-right government and international lenders.

Parked buses are seen at Via Norte station during a general strike in Porto

Public transport services were shut down for the day

A general strike called by Portugal's two main trade unions brought the troubled eurozone nation to a virtual standstill on Thursday.

At the Lisbon airport, protestors in a picket line chanted, "the strike is general, the attack is global!" Workers oppose budgetary cuts agreed between its new center-right government and international lenders.

Nearly all flights were cancelled, with national airline TAP cancelling 121 of its 140 scheduled flights. Trash remained uncollected, and public transport services, including Lisbon's trains, tram services and ferries were halted.

Many hospitals offered only minimum treatment. Shops, however, remained open in central Lisbon and Portugal's second largest city, Porto.

Complicating the drama was a decision by the ratings agency Fitch on Thursday to downgrade Portugal's debt assessment a notch to BB+ because of the eurozone nation's "adverse economic outlook."

Trade union leader Manuel Carvalho da Silva said the 24-hour strike called by two top confederations, his communist CGTP and the Socialist UGT, had drawn a "very significant number of people" in the Iberian nation of 11 million. The unions had previously forecast 3 million protestors.

Tax hikes and pay cuts

The government of Prime Minister Pedro Passos Coelho is trying to implement tax hikes and pay cuts agreed in May with the European Union and the International Monetary Fund in exchange for a 78-billion-euro ($105 billion) bailout package.

Portugal's previous Socialist government headed by Jose Socrates collapsed in June after failing to persuade parliament to adopt austerity measures.

Parliament recently slashed spending on health and education by about 10 percent. Active and retired public employees stand to loose one seventh of their annual pay. The hours of work for employees of private firms are to be lengthened by half an hour.

Ground staff protest at Lisbon Airport

The 24-hour strike was called by Portugal's two main trade unions

"Why am I going to be left without part of my Christmas bonus?" asked Carlos Silva, a 45-year-old machinist. "I've paid my social security since 1981."

Austerity cuts also hit services in the health sector and public television. Portugal is the third country in the eurozone to implement a bailout, after Greece and Ireland.

Workers outraged by 'injustices'

Elisio Estanque, a sociologist at Portugal's renowned Coimbra University, said public outrage about belt-tightening was even higher than during a similar strike staged in the country last year.

"Although people generally accept the need for austerity, there is a deep feeling of injustice about the distribution of sacrifices, especially in the public sector," he told the Reuters news agency.

Unemployment is at 12.4 percent, Portugal's highest level since the 1980s. Workers are especially fearful that state companies will make job cutbacks.

"Above all, banks are to blame for our woes," said Jose Baptista, a 44-year-old electrician. "My biggest concern is financing and how people, companies and our country have just had their financing cut off."

Budgetary goals in doubt

To meet the EU-IMF bailout terms, Portugal is supposed to lower its public deficit, which stood at 9.8 percent of gross domestic product in 2010, down to 5.9 percent by the end of this year. A recent estimate of 8.3 percent has put that goal in doubt.

The forecast for 2012 is no better, with the budget deficit supposed to sink further to 4.5 percent. Last Monday, Finance Minister Viktor Gaspar conceded that the economy would shrink next year by 3 percent, leaving little scope for fresh revenue. Joblessness is set to rise to 13.4 percent.

Author: Ian P. Johnson (AFP, Reuters, dpa, dapd)
Editor: Martin Kuebler

DW.DE

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