August 28, 2014 / 2:25 PM / 5 years ago

Argentine unions stage general strike as economy deteriorates

BUENOS AIRES, Aug 28 (Reuters) - Argentine opposition labor unions staged their second general strike this year on Thursday to protest soaring inflation and job cuts, slamming the brakes on business activity and bringing the Rosario grains export hub to a near standstill.

Latin America’s third largest economy is mired in a recession that is set to worsen after its default last month as pressure on the peso currency builds, investment withers and borrowing costs for companies and provinces rise.

The 24-hour strike called by the powerful CGT labor organization impacted trains, air transport, gas stations and public administration.

“The reasons (for the strike) are suspensions, job cuts ... and we are also raising the issue of the income tax and the reopening of wage talks,” said Ruben Sobrero, a leader of the rail workers trade union.

Accelerating inflation is pushing workers into higher income tax brackets although their wages are not rising in real terms.

The Argentine economy slipped into recession in the first quarter as both industry and private consumption dropped. The country has one of the world’s highest inflation rates, currently running at more than 30 percent, according to private economists.

“If our demands are not listened to, then there will be another strike of 48 hours in September,” Sobrero said.

About 80 percent of Argentine grains and oilseeds leave from Rosario, located on the Parana River. Unionized workers are needed to manage the entrance and exit of each ship from the constellation of ports that make up the Rosario hub.

Port workers have staged many walkouts at Rosario over the past few months, slowing trade. Analysts fear social unrest could grow as the default lengthens, darkening the economic outlook.

Argentina slipped into default again in July after a U.S. court blocked a coupon payment owed to holders of debt that was restructured after the country’s record default in 2002 on $100 billion in debt. The court said Argentina could only service its debt if it also paid so-called holdouts who rejected its restructuring.

Argentine Cabinet Chief Jorge Capitanich said the strike was politically-motivated due to general elections next year, saying only 25 percent of workers had joined the protest.

Labor groups staged their first general strike this year on April 10 but Argentina’s economic situation has worsened since then. (Reporting by Alejandro Lifschitz and Sarah Marsh; Editing by Tom Brown)

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