November 24, 2011 / 1:26 PM / 6 years ago

Portuguese strike against bailout austerity

A security guard patrols Cais do Sodre, a railway station, during a general strike in Lisbon November 24, 2011.Jose Manuel Ribeiro

LISBON (Reuters) - Portuguese workers went on strike on Thursday, halting public transport and factories in many parts of the country to protest against harsh austerity measures imposed as the price of an EU/IMF bailout.

The rescue funds are designed to keep Portugal afloat and stem a snowballing euro zone debt crisis, but the painful austerity measures including pay cuts are hugely unpopular and have sent the country into its worst recession in decades.

Highlighting Portugal's economic woes, Fitch Ratings on Thursday cut its credit standing to just below investment grade.

Planes were grounded, trains halted and most public services interrupted as workers across the nation of 11 million protested against job losses, tax hikes and pay cuts agreed between Portugal and the troika of lenders -- the European Commission, European Central Bank and International Monetary Fund.

"There is a strong sentiment of outrage, which has to make us reflect a lot about the situation," said Manuel Carvalho da Silva, head of the 750,000-strong CGTP union.

He said participation in the strike was strong in the transport sector, including Volkswagen's Autoeuropa, halting production, and there were "different rates of participation in various parts of the country". Still, minimum public services were maintained under court orders.

The Naval Shipyards in Viana do Castelo in northern Portugal ground to a halt as all 700 workers downed tools, the local union leader, Antonio Barbosa, said.

All international flights to and from Lisbon and Porto were cancelled for the duration of the 24-hour walkout, according to the website of the airport authority ANA.

"The strike is general, the attack is global!" chanted protesters in a picket line at the Lisbon airport, referring to what unions say is an attack on workers' rights.

BAILOUT CONDITIONS

The centre-right government must meet EU conditions for a 78-billion-euro bailout to rescue Portugal from its worst economic crisis in decades. The previous government collapsed in March after failing to push its own austerity drive through parliament and had to request the bailout.

"With what the troika is doing here, I think we have reasons for the strike. I've paid my social security since 1981, why am I going to be left without part of my Christmas bonus? I think it is wrong," said 45-year-old machinist Carlos Silva.

Portugal was the third country in the euro zone to seek a bailout, after Greece and Ireland, and is now headed for its deepest recession since it returned to democracy in 1974. The economy is set to contract nearly 3 percent next year.

In its drive to cut the budget deficit and debt, the government has ordered cuts in this year's year-end bonus for all workers and cancelled holiday and year-end bonuses for civil servants next year.

Its reforms include spending cuts in everything from health services to public television. It is also reforming labour laws and has extended the working day by half an hour.

For weeks, posters have lined the streets of Lisbon urging workers to strike, while the government insists there is no way out of painful austerity.

Prime Minister Pedro Passos Coelho, who came to power in June, said the country's priority was to beat the debt crisis.

"It is up to me to try to mobilise the Portuguese for action every day to contribute to transform Portugal," he said.

STRONG SUPPORT

Despite the protests, an opinion poll by Marktest pollsters on Thursday showed support for the ruling PSD party rising four percentage points from last month to 45 percent. The government's solid backing has been in contrast to Greece, where a national unity government was formed to push through measures to stave off bankruptcy.

Rallies were planned across the country on Thursday, but analysts note the Portuguese, unlike nations such as Greece, do not have a tradition of violent protest, and labour action in the face of the crisis has so far been low-key.

Authorities reported no serious incidents although police said vandals had smashed the windows of three tax offices in Lisbon.

But the prospect of deep belt-tightening measures, which kick in with full force next year, have fuelled support and may make the strike significantly larger than one held a year ago.

Portugal must cut its budget deficit this year to 5.9 percent of gross domestic product from nearly 10 percent in 2010. In 2012, Lisbon has promised to cut the deficit to 4.5 percent of GDP. Workers' fears, especially in state companies that face heavy cuts, have been fed by unemployment, which stands at 12.4 percent and is the highest since the 1980s.

Additional reporting by Axel Bugge and Miguel Pereira, editing by Rosalind Russell

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