Lisbon demonstrations, Friday 21 September. Photo manudiarioliberdade
Portugal’s unions stop wage cuts: big blow to austerity
The Financial Times has reported (£) that Portugal’s Prime Minister will meet unions and business leaders today (Monday) to back down on plans to cut workers’ wages as part of the austerity measures demanded by the Troika (the EU, IMF and European Central Bank). BBC World carries a similar report, without mentioning unions. The FT reports that the Prime Minister planned “increasing workers’ social security contributions by seven percentage points to 18 per cent of their pay to finance a corresponding 5.75-point cut in employers’ social security payments.” Unions have pointed out that employers are currently sitting on €7.5bn of reserves, and that the switch would therefore do nothing to create new jobs.
The climbdown came after mass demonstrations on Friday night in Lisbon outside the Presidential palace, and union plans to escalate the protests in Lisbon and 40 other cities on 29 September. Fifty thousand people had promised on Facebook to join the Friday-night protest. In November 2010, the unions staged only the country’s second General Strike since the restoration of democracy in the mid-1970s.
The European Trade Union Confederation (ETUC) and International Trade Union Confederation (ITUC) have both supported Portugal’s unions in their campaign against austerity. Unemployment in Portugal has hit 16% and the economy is forecast to shrink a further 3% this year.
One of the two ETUC affiliates in Portugal, the left-wing CGTP-IN, said:
“We cannot accept the continuation of policies that are cutting salaries and pensions. Other measures are necessary, measures that may reconcile the deficit and the public debt reduction with economic growth and social justice. We need the debt to be restructured, a combat against fraud and tax evasion, adequate taxing of big fortunes’ incomes, of luxury goods, of higher incomes and financial transaction taxes.”
The campaign against austerity has seen unprecedented co-operation between the CGTP-IN and the traditionally more moderate, socialist UGT. And unity seems to be paying off.