Portuguese labour unions mounted a general strike on Wednesday, pressing the government to scrap austerity measures intended to ward off a debt crisis that is spreading through the eurozone. After Ireland's decision to seek assistance from the EU and IMF, investors are turning their attention to other financially weak eurozone nations like Portugal.
Any wavering in the Socialist government's commitment to austerity measures could push up Portugal's borrowing costs in the same vicious spiral that forced Dublin and before it Athens to seek rescues. A Reuters poll showed a majority of economists expect Portugal to seek a bailout. As the country's two biggest unions stopped trains and buses, grounded planes and halted services from healthcare to banking on Wednesday, the spreads of 10-year Portuguese bonds over German benchmarks hit a euro lifetime high.
"It is a bigger strike than the one in 1988," Joao Proenca, the head of the UGT union that is traditionally close to the ruling Socialists, told a briefing. "We consider it to be the biggest strike ever." The CGTP union said 75 percent of all workers in the country participated. Labour Minister Maria Helena Andre said participation varied widely, without providing specific numbers. "We are facing a very reduced participation in the private sector of the economy," she told a briefing.