300,000 join CGTP demonstration against austerity package

One of the largest demonstrations seen in Portugal took place on 29 May 2010, to protest about government plans for a new austerity package including tax increases, plus measures limiting unemployment benefits and employment protection. The General Confederation of Portuguese Workers and all its affiliated trade unions decided on the protest at an extraordinary meeting. The unions estimated 300,000 workers took part nationally, a number not publicly contradicted by any other source.

Pressure on government to reduce budget deficit

Following the downgrade of Portuguese government bonds by the rating agency Standard and Poor’s, and a similar move by Moody’s Investor Service (see announcement by Moody’s (in Portuguese)), the government faced increasing pressure to introduce new austerity measures. On 28 April 2010, the Socialist government announced cuts in unemployment benefit and lowered the minimum wage for those jobs the unemployed have to accept. The Prime Minister José Sócrates had failed to reach an agreement with the social partners on this matter and faced, in particular, strong opposition from the General Confederation of Portuguese Workers (CGTP) and the General Workers’ Union ( UGT). However, he did reach an agreement with Pedro Passos Coelho, the new leader of the opposition party, the centre-right Social Democratic Party (PSD).

Protest against austerity measures

Around 130,000 people staged a protest on May Day 2010, at the behest of CGTP. During the protest, the union leaders announced plans for the nationwide demonstration on 29 May. The unions wanted to protest against measures in the Stability and Growth Plan (PEC 2) namely:

• the freeze on wages;

• cuts in public sector pensions ([PT1102019I](/search/node/eiro OR 2011 OR 02 OR articles OR pt1102019i?oldIndex));

• the rise of unemployment and low wages;

• and the proposed changes to unemployment benefit.

Austerity escalates and unions organise major demonstration

The government presented its austerity measures on 13 April. These included a 1.5% increase in income tax and a 1 percentage point increase in value-added tax (VAT) to 21% on items including basic necessities. The government’s goal is to reduce the budget deficit from 9.3% to 7.3% in 2010, and bring it down to 4.6% in 2011. The total reduction represents a cut of €7.8 billion.

On 15 May, 500 delegates of CGTP and its affiliated unions discussed using the demonstration on 29 May as the first stage of the mobilisation for a general strike. But the union leadership decided to wait until after the 29 May demonstration before taking any further steps. However, on 26 May, three days before the planned demonstration, the government announced it was to abolish eight measures of the Employment Initiative 2010. This initiative had:

• extended the period of the unemployment social allowance;

• reduced the period of contributions needed to entitle a worker to unemployment benefit;

• increased the benefit amount for unemployed families with children;

• extended family allowances for children’s education;

• reduced the single social contribution for small or micro companies;

• supported employment for older workers;

• introduced the Programme Qualification-Employment, which provided training for young graduates in areas of low employability;

• agreed a more generous credit line subsidy, to support business start-ups (PT1001059I).

Trade union position

CGTP and UGT criticised the withdrawal of these measures saying that they were crucial to easing the grave unemployment situation. João Vieira Lopes, President of the Portuguese Trade and Services Confederation (CCP), also acknowledged the social impact the withdrawal of those measures would have.

Manuel Carvalho da Silva, Secretary General of CGTP declared: ‘Either we come up with a very strong reaction or we will be reduced to bread and water.’ He added: ‘Probably decisions will be adopted for an exceptional mobilisation of workers.’ On 29 May, tens of thousands of people marched in Lisbon against the government’s austerity measures, with the leader of CGTP vowing to intensify resistance but stopping short of calling a strike. A CGTP national committee official said that 300,000 people joined the demonstration. Police declined to estimate the turnout and the number estimated by CGTP was not publicly contradicted by any other source. Therefore, the demonstration was one of the largest ever organised in Portugal.

Maria da Paz Campos Lima, Dinâmia