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Portugal’s Biggest Labor Unions Call Nov. 24 General Strike

October 19, 2011

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Oct. 19 (Bloomberg) -- Portugal’s biggest labor unions, CGTP and UGT, scheduled a general strike for Nov. 24 to protest against austerity measures the government is implementing as it tries to meet budget deficit targets.

“It will be a big general strike in which we strongly affirm ourselves against the increase in exploitation and impoverishment,” Manuel Carvalho da Silva, CGTP’s secretary- general, said today at a press conference in Lisbon. Before the day of the strike, various demonstrations have been scheduled around the country, he said.

The two trade unions organized the country’s first general strike in 22 years on the same date last year as the previous government announced austerity measures. Portugal requested a bailout in April and its new Prime Minister Pedro Passos Coelho is cutting more spending and raising taxes further to meet terms of a 78 billion euro ($108 billion) aid plan from the European Union and the International Monetary Fund.

The austerity measures are hurting the economy and the government forecasts gross domestic product will shrink 2.8 percent next year after a contraction of 1.9 percent this year. The Finance Ministry estimates the unemployment rate will reach 13.4 percent in 2012 before it starts to decline in 2013.

Budget Overrun

To meet its budget goals, Portugal has to do more than it initially planned, Passos Coelho said on Oct. 13. The overrun in implementing the 2011 budget, relative to the financial aid program’s forecast, exceeds 3 billion euros, he said. The government has already announced a one-time income-tax surcharge to help cover the budget shortfall this year.

The 2012 budget includes a plan to eliminate summer and Christmas salary payments for state workers earning more than 1,000 euros a month. As mentioned in the financial aid program, tax deductions will be reduced and the government plans to increase the value-added tax rate of some goods.

An initial vote on the 2012 budget proposal is scheduled for Nov. 4 and the final vote in parliament may take place on Nov. 29. The coalition government is backed by the Social Democrats and the People’s Party, which together have a majority of seats in the legislature.

The austerity measures are intended to help the government meet its goal of trimming the budget deficit from 9.8 percent of GDP in 2010 to 5.9 percent in 2011, and then 4.5 percent in 2012, before reaching the EU ceiling of 3 percent in 2013.

Improve Control

Portugal is “on track” to meet its 2011 deficit goal, a team of EU and IMF inspectors said on Aug. 12. The IMF said in a Sept. 13 report that the government needs to improve control over expenditure and cut spending to meet targets as it seeks to regain access to bond markets in 2013.

Last year’s general strike shut Lisbon’s metro and most flights departing from Lisbon and Oporto airports were canceled. Galp Energia SGPS SA, Portugal’s biggest oil company, said its refineries were operating normally on the day of the strike.

In Athens today, riot police in helmets used tear gas to hold back demonstrators from the parliament building in the Greek capital. The Greek police said about 70,000 people gathered in Athens at the start of a 48-hour strike in one of the biggest protests yet against that government’s program of public-sector job cuts, tax increases and reductions in pensions and wages.

“In Portugal workers have never had tumultuous behavior,” Carvalho da Silva said. The 1974 revolution, which ended a four- decade dictatorship, was not violent, he said.

--Editors: Leon Mangasarian,

To contact the reporters on this story: Joao Lima in Lisbon at jlima1@bloomberg.net; Henrique Almeida in Lisbon at halmeida5@bloomberg.net.

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net


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