Portuguese general strike

Lisbon Protest

By Nicky Dempsey

Lisbon Protest

Photo NunoRibeiro

The Portuguese general strike on November 24th registered a major increase in the response of the working class and its allies against the attacks on social welfare, pay and jobs. The government claim that there was only 30% support for the strike in the public, and even less in the private sector was widely derided.

The leaders of the CGT and UGT union confederations claimed 3 million workers supported the strike – 75% of the entire workforce. Production at Volvo, the largest private employer, was halted for the day, and the stoppage in sectors such as public transport appeared to be total. The joint action by the two confederations was itself a victory – a first in over 20 years and in fact only the second time in their history that they have engaged in joint mass mobilisation.

The strike was called in response to the announcement of another package of measures designed to reduce the living standards of workers and the poor, which is the third such measure this year. They are a catalogue of policy decisions which amount to the opposite of what is needed to revive the economy. Among the measures proposed for inclusion in the state budget for 2011 are:

• a 5% reduction on all expenditure on public sector wages, which includes a wage cut of between 3.5% and 10% for the workers whose wages are above €1,500 a month, and the freezing of all progressions and promotions;
• a reduction in spending on pensions, allowances and other social benefits, including family allowances;
• higher taxes, including an increase in value-added tax (VAT) from 21% to 23%;
• the freezing of investment in the public sector.

Women will be particularly hard hit by a string of cuts to welfare. Ethnic minorities, mainly from Portugal’s former colonies, are already over-represented among the ranks of the poor and within an unemployment of 10.6% and will be at the forefront of the attack on both welfare and employment.

The government’s stated goal is to reduce the budget deficit significantly, bringing it down to 7.3% of gross domestic product (GDP) by the end of 2010, and to 4.6% in 2011. Yet the trends in the Greek and Irish economies are ample confirmation that these ferocious assaults on living standards have the effect of driving up the public sector deficits because they are so economically damaging. According to Reuters’ news agency, which regularly polls economists, many believe the economy will go back into recession in 2011 after a modest respite in 2010, under the impact of government policy. The Portuguese central bank is forecasting no better than zero growth in 2011, after a projected growth of 1.2% this year.

That modest upturn was itself a response to the measures to boost growth in 2009, which is clear from analysis produced by the European Union. Those measures included public investment, social welfare and employment protection, as well as largely failed efforts to tempt the private sector into increasing its own investment. It is the decline in investment which is responsible for the entirety of the recession, €4.6bn of a GDP decline of €4.5bn.

In Portugal, as elsewhere, the aim of policy is not deficit-reduction at all. In that case, a policy of boosting the economy through increased government investment, supplemented if necessary by measures to boost taxation revenues, would be adopted. Instead, the policy of cutting social welfare, jobs and pay is designed to drive down the level of wages and the social wage, and to drive up profits. It was not a policy which was initially adopted by the ruling Socialist Party (PS) and Social Democratic Party (PDS) coalition, even though the latter has always been a party of the right.

But following pressure from the European Central Bank and abetted by the international bond markets, the government has warmly embraced a policy designed to reduce the living standards and role of the ‘peripheral’ EU economies to the benefit of the major ones and above all their financial sectors.

This major protest in Portugal follows a string of mass mobilisations in France and at least 5 possibly 10 million striking in Spain. The European working class and its allies are taking repeated blows in this offensive. But they are fighting back.