LISBON — Portugal’s biggest unions went on their first joint general strike since 1988 on Wednesday, hoping to weaken the Socialist government’s resolve on implementing austerity measures meant to tackle a debt crisis. þþNow that Ireland has announced its intention to seek assistance from the E.U. and I.M.F., investors are turning their attention to other financially weak euro nations like Portugal, which faces acute pressure to restore confidence in its economy. Any wavering in the government’s commitment to new austerity measures could push up Portugal’s borrowing costs in the same vicious spiral that forced Athens and Dublin to seek rescues. þþAs the country’s two biggest unions stopped trains and buses, grounded planes and halted services from healthcare to banking, the spreads of 10-year Portuguese bonds over German benchmarks hit a euro lifetime high. þþLisbon was relatively quiet as many workers were prevented from going to work but roads in around the capital were choked with heavy traffic as commuters opted to use their cars. Cafes and shops were open and vans delivered goods as usual. þþ“What’s coming for the new generation is very sad. I don’t see a solution for them aside from emigrating to other countries where they may have new opprtunities,” said Madalena Costa, 66, a retired school teacher as she passed a train station emptied by the strike. þþOthers were angered by the protest, saying the country could not afford the stoppage, the first general strike by the country’s top two unions since 1988. þþ“This strike is completely absurd,” said Pedro Silva, 36, a biology teacher at a private school, who was forced to take a taxi to work. “The Portuguese have to understand that there is no money and if there is no money people have to work to get it.” þþAs the one-day strike kicked off, Portugal’s largest exporter, Volkswagen’s Autoeuropa plant, halted production altogether. The plant produces up to 500 cars on an average day. þþ“The production line is completely shut, so we expect that no cars will be produced today,” said Autoeuropa union coordinator Calros Chora, adding that only a small part of the plant dealing with repairs would be open. þþ“There is a picket line outside, but they are letting people in and out,” he said. þþLisbon has been plastered with banners for weeks urging workers to join the strike, although no mass protest march was planned. þþThe CGTP union said all ports were shut, and check-in counters at Lisbon’s main airport was empty. National airline TAP cancelled most flights. þþRoads in and around the capital Lisbon were choked with heavy traffic as many people chose to commute by car. Cafes and shops were open and vans delivered goods as usual. þþThe unions hope to tap into the growing dissatisfaction with the minority Socialist government’s austerity measures, which also include across the board spending cuts in public services. þþ“It’s the workers who are paying for the crisis, not the bankers nor the shareholders of big companies,” said Leandro Martins, a 65-year old retiree. “This is a strike against rightist policies, to demand new policies serving the Portuguese people.” þþPortugal has suffered from years of low growth — unlike other weak euro economies such as Ireland and Spain that went from boom to bust — and waning competitiveness which economists say undermines its ability to ride out the debt crisis. þþ“Maybe the strike will not provoke radical changes in the austerity course the government has chosen, but it does represent an additional element of uncertainty in the already unstable setting in the country,” said Elisio Estanque, a sociology researcher at the University of Coimbra. þþThe country’s risk premium — or spreads on its bonds over safer German Bunds — hit a euro lifetime high on Nov. 11 and was close to that level on Wednesday, at 460 basis points. þþEven though the economy is growing this year, economists fear it will slide back into recession in 2011 as higher taxes and civil servant wage cuts of five percent bite into consumption. þþUnemployment, already at its highest since the 1980s at 10.9 percent, could rise further. þþ
Source: NY Times
