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Portuguese workers strike over austerity

Portugal's economy is set to contract nearly 3% next year
Portugal's economy is set to contract nearly 3% next year

A general strike grounded flights and paralysed public transport in Portugal today as workers protested a tough 2012 budget aimed at helping the country pay its debt.

Authorities cancelled nearly all flights in and out of the nation's main airports as well as national flights.

The Lisbon 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.

Numerous schools, ports and post offices were closed and many hospitals provided only emergency care.

"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," Mr da Silva said.

According to government figures, approximately 12,800 civil servants (3.6%) joined the strike, but union leaders said participation looked to surpass the 3m 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 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.

Mr 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 Fitch ratings agency cited the high level of debt today as it cut its rating of the bailed-out country by one notch to 'BB+' because of its debt levels and weak economic outlook.