UPDATE 5-Portuguese unions strike over austerity measures

* Union says 3 million took part in general strike

* Strike halts public transport, government services

* Govt says strike impact varied, limited in private sector

(Updates with union estimate, CGTP leader quotes)

By Shrikesh Laxmidas and Daniel Alvarenga

LISBON, Nov 24 (BestGrowthStock) – Portuguese unions staged what
they said was the country’s largest general strike on Wednesday,
pressing the government to scrap austerity measures intended to
ward off a debt crisis that is spreading through the euro zone.

Any wavering in the Socialist government’s committment to
austerity measures could push up Portugal’s borrowing costs in
the same vicious spiral that forced Ireland, and before it
Greece, to seek international aid.

As 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. [ID:nLDE6AN0OL]

“It is a bigger strike than the one in 1988,” Joao Proenca,
the head of the UGT union which is traditionally close to the
ruling Socialists, told a briefing. “We consider it to be the
biggest strike ever.”

Manuel Carvalho da Silva, head of the country’s biggest CGTP
union, said over three million people in the country of 10
million took part.

“This strike offers an unequivocal sign that the government
and the political forces must interpret,” Carvalho da Silva
said. “The way out of the crisis cannot be through sacrifices
made by the workers.”

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.

The CGTP said all ports were shut and check-in counters at
Lisbon’s main airport were empty. National airline TAP cancelled
most flights. There were no mass protests.

Lisbon was relatively quiet as many workers were prevented
from going to work but roads in and around the capital were
choked with traffic as commuters opted to use their cars. Cafes
and shops were open and vans delivered goods as usual.

Prime Minister Jose Socrates has repeatedly ruled out the
need for a bailout, pledging to stay the course to cut the
budget deficit through tough wage reductions for civil servants,
tax hikes and major cutbacks to public services.

“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.

Others 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.

“This strike is completely absurd,” said Pedro Silva, 36, a
biology teacher at a private school, who had 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.”

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euro zone peripheral economies comparison http://r.reuters.com/zem66q CDS curves - Greece, Ireland, Portugal and Spain http://r.reuters.com/xyq76q Portugal's 2011 budget [ID:nLDE69C26Q] Euro zone crisis stories [ID:nLDE68T0MG] Reuters poll: Portugal set to ask for help [ID:nLDE6ANOKK] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

VW PLANT HALTS PRODUCTION

The country’s largest exporter, Volkswagen’s (VOWG.DE: )
Autoeuropa plant, halted production altogether. The plant
produces up to 500 cars on an average day. Lisbon was plastered
with banners for weeks urging workers to join the strike.

Portugal 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.

Still, analysts doubt the strike will influence the
government’s decisions or prevent parliament from voting to pass
the 2011 budget on Friday. The opposition Social Democrats also
support the budget, giving the Portuguese few political options.

“It is not the government’s hand anymore that rocks the
cradle. We are at the whim of creditors,” Pedro Santos
Guerreiro, director of Jornal de Negocios business daily, wrote
in an editorial.

“It is true that 10 million strikers will have the same
impact as 10 — none.”

Although the Portuguese 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.

Unemployment, already at its highest since the 1980s at 10.9
percent, could rise further.
(Additional reporting by Andrei Khalip; Writing by Axel Bugge;
Editing by Louise Ireland)

UPDATE 5-Portuguese unions strike over austerity measures