From the TUC

Portugal’s unions stop wage cuts: big blow to austerity

23 Sep 2012, By

Lisbon demonstrations 21 September

Lisbon demonstrations, Friday 21 September. Photo manudiarioliberdade

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.

One Response to Portugal’s unions stop wage cuts: big blow to austerity

  1. Hugo Gomes
    Oct 10th 2012, 4:51 pm

    I think, rather than the CGTP moving to the centre of the political spectrum, what you’re looking at is a government rejecting an (already feeble) tradition of corporatism in which the UGT (and its affiliated unions) was embedded. As I see it, they were basically put out in the cold, and have little option now but to join forces with their old anti-capitalist rivals. That a so-called social democratic/Christian centrist governing alliance would renegue on forms of social dialogue and partners that were around during the pre-1974 dictatorship is quite simply mind-boggling, and a testimony to the radicalisation of the ‘pro-market’ orthodoxy within the ruling parties vs. their traditional conservative and social-democratic values.