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Budget cuts will ‘sink’ Portugal, fume striking workers

Thousands of workers descended on Lisbon’s streets Thursday in an outpouring of anger at a draconian 2012 budget designed to help Portugal pay its debts, paralysing transport services nationwide.

The general strike forced authorities to cancel nearly all flights in and out of the nation’s main airports as well as national flights.

Lisbon’s metro came to a standstill and ferries across the capital’s Tagus River functioned only intermittently in what unions said was a necessary bitter pill.

“The strike is a sacrifice for the good of the country,” said Manuel Carvalho da Silva, secretary general of the CGTP union, which along with Portugal’s other main union the UGT had called the strike action.

“It is a red card to the government for its actions that are driving the country to poverty,” da Silva said as he stood in front of a billboard listing cancelled flights at Lisbon’s airport.

Protestors gathered near the parliament wielding placards that read “No salary decreases, no increased hours” and “A brutal offensive, a general strike”.

“The government is destroying the country,” said 45-year-old Anabela, an employee of the Lisbon metro who says she has lost 20 percent of her salary because of government austerity reforms.

“We are losing our buying power, nobody buys, nobody sells anything…We are going to sink” she said.

With bus and train traffic also disrupted, huge traffic jams clogged roads in and around Lisbon during the morning rush hour. Many hospitals provided only emergency care and numerous ports, post offices and schools closed for the day.

Amid the disruption, the Fitch agency praised the contested budget but cut its rating of the bailed-out country by one notch to ‘BB+’ because of high debt levels and weak economic outlook.

According to government figures, some 12,800 civil servants, or 3.6 percent, joined the strike, but union leaders said participation looked to surpass the three million people who had turned out for a similar strike in November 2010 to protest austerity measures proposed by the then Socialist cabinet.

The current centre-right government led by Prime Minister Passos Coelho has submitted a tough 2012 budget to help reduce the nation’s huge debt.

After Greece and Ireland in 2010, Portugal became the third eurozone member state needing a bailout in May when it could no longer raise fresh funds at sustainable rates on the financial markets.

Among other measures, the budget provides for the suspension of 13th and 14th month salary payments for civil servants and pensioners who earn more than 1,000 euros a month.

Employees in the private sector will see their working day increased by 30 minutes while health and education spending will be slashed, topping off a series of measures already adopted in efforts to reduce the deficit.

Coelho has conceded that the austerity measures are even tougher than those required under the EU-IMF bailout terms but says they are necessary to ensure its targets are met in the face of difficult economic conditions.

The Portuguese were split over the need for a strike.

“We have to try and reimburse the country’s debt but this austerity is too brutal,” said Patricia Conceicao, an accountant smoking a cigarette in front of her office in Lisbon.

Portugal needs to reduce its public deficit from 9.8 percent of gross domestic product in 2010 to 5.9 percent by the end of 2011 but it stood at 8.3 percent earlier this year, putting that objective in doubt.

The forecast for 2012 looks no better, after the announcement by Finance Minister Viktor Gaspar Monday that its economy is expected to shrink by three percent in 2012.

Unemployment is also set to rise to a record rate of 13.4 percent.

Thursday’s strike follows protests earlier in the month by civil servants and soldiers and a public transport strike in Lisbon and Porto on November 8.