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Anti-austerity general strike paralyses Portugal

Public services across Portugal ground to a halt on Thursday as trade unions held a 24-hour walk out. The strikers are protesting against a raft of austerity measures introduced by the government in exchange for financial aid.


AP - Portugal is bracing for a broad shutdown of public services Thursday as trade unions stage a general strike against austerity measures adopted in return for a €78 billion ($104 billion) international bailout.

The 24-hour walkout comes amid increasing hardship as Portugal, one of western Europe’s frailest economies, sheds jobs and sinks deeper into recession.

Travelers faced severe disruption. More than 470 international flights could be canceled, while some 1 million commuters had to make their way to work without regular bus or train services.
The Lisbon subway was to close all day.

International ratings agency Fitch has downgraded Portugal’s debt to junk status due to its high debts and poor economic prospects.
Fitch said on Thursday it is downgrading Portugal one notch, to BB+ from
The agency said it took the measure because of Portugal’s “large fiscal imbalances, high indebtedness across all sectors, and adverse macroeconomic outlook.”
The move is another blow to Portugal’s efforts to restore its fiscal health after taking a €78 billion ($104 billion) bailout earlier this year to avoid bankruptcy.
The government is cutting spending and hiking taxes - measures which triggered a general strike Thursday. (AP)

Government offices, school classes, mail deliveries, trash collection and other public services were also likely to be severely disrupted, authorities said.

Portugal is locked into a three-year program of debt-reduction measures in return for the financial rescue package from its European partners and the International Monetary Fund. The center-right coalition government, which has an overall majority in Parliament, and the opposition center-left Socialist Party gave their blessing to the bailout conditions in May. Failure to abide by the bailout terms could hold up the bailout payments.

But as in Greece and Ireland, other eurozone countries that needed a financial lifeline, falling living standards have stoked outrage at the austerity measures. Unemployment is up to 12.4 percent and prospects for an improvement are grim as a double-dip recession is forecast to worsen next year.

Next year, the Portuguese people will pay more sales tax, income tax, corporate tax and property tax to help settle the country’s debts. At the same time, their welfare entitlements are being curtailed.

The government next year is scrapping public employees’ Christmas and vacation bonuses - each roughly equivalent to a month’s pay - after cutting their regular monthly pay this year. The government also wants a legal change that would let private companies demand that employees work an extra 30 minutes a day without overtime pay.

Portugal’s two largest trade unions, representing more than 1 million mostly blue-collar workers, are holding 34 marches across the country.
One of them, the General Confederation of Portuguese Workers, accused the government of implementing a “scorched-earth policy.”

“We have to stand up for the interests of the country, the workers and the people, and look after our future and our development, not the interests of speculators and usurers,” it said.
Prime Minister Pedro Passos Coelho on Wednesday defended the right to strike but added “it’s important to find a way out of the crisis through hard work.”

Though trade unions called for a general strike, few private companies are expected to close. Even so, they face disruption.
A huge Volkswagen car plant south of Lisbon, which accounts for 10 percent of Portuguese exports, decided to shut down production for the day because of problems facing its suppliers.

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