Country shut down by general strike
PORTUGAL'S first general strike in 22 years shut Lisbon's metro and grounded most flights yesterday as workers protested against the government's austerity measures.
Staff at ports, railway services and the state-owned post office took part in the strike.
Most flights departing from Lisbon and Oporto airports were cancelled. The last general strike called by the country's two largest labour organisations was in 1988.
Portugal plans to cut the wages of state workers and raise taxes in an attempt to convince investors that it can narrow the fourth-biggest budget deficit in the eurozone.
"It's indisputable that today we need to fight the deficit or face the penalty of having the IMF around -- but it can't be only the workers that pay the bill," said Joao Proenca, head of UGT, one of the two main labour groups.
He added: "If we fight the deficit by sinking the country, then we aren't going anywhere. So it's fundamental that there is concern about growth and employment."
The IMF forecasts that Portugal's economy may shrink by 1.4pc next year due to fiscal tightening. Its economic growth has averaged less than 1pc a year in the past decade.
The government said that 19pc of state workers took part in the general strike. No hospitals were closed but 1,029 schools were shut, according to Goncalo Castilho dos Santos, Portugal's secretary of state for public administration.
He said: "Services are working normally and the large majority are open to the public."
Portugal's government said in September that it would cut the wage bill by 5pc for public workers earning more than €1,500 a month.
It also announced plans to freeze hiring of public sector staff and raise value-added taxes by 2pc to 23pc in order to help reduce the deficit.
The measures are included in the 2011 spending plan, which faces a final vote in parliament in two days' time.
Support for prime minister Jose Socrates's minority government has slipped as discontent over the economy deepens.
Backing for the ruling Socialists fell 8pc to 26pc in a poll published in the newspaper 'Diario de Noticias' on October 29. The Social Democrats, the biggest opposition party, led with 40pc, up 3pc from the previous poll in June.
The announcement of the deepest deficit reductions in more than 30 years has done little to reassure investors.
The yield premium on Portugal's 10-year debt over German bunds reached a euro-era record of 483 basis points on November 11 as Ireland moved toward a bailout.
The spread stood at 433 basis points yesterday.
The Portuguese government is seeking to cut the budget gap from 9.3pc of gross domestic product in 2009 -- the fourth-highest in the 16-nation eurozone region, after Ireland, Greece and Spain -- to 7.3pc this year and 4.6pc next year.
It aims to reach the EU limit of 3pc in 2012.