General strike shuts down Portugal

A general strike called by Portuguese unions against austerity measures imposed by international finance capital practically shut down Portugal last Thursday.

The Nov. 24 strike was called by Portugal’s largest union federation, the General Federation of Portuguese Workers (CGTP-IN), which is close to the Portuguese Communist Party. It was supported by the socialist-affiliated General Workers’ Union (UGT) and by many other labor and civic organizations. It was especially effective in shutting down the transportation system and government offices, but also extended to basic industry and other areas of the economy.

The strike was in response to continuing efforts by the right-wing government of Prime Minister Pedro Passos Coelho to intensify the austerity measures that have been imposed on Portugal by the European Central Bank, the European Commission and the International Monetary Fund in exchange for further extensions of credit to this beleaguered country.

These measures come on top of privatizations, layoffs and cuts in wages and pensions already imposed by Passos Coelho’s predecessor as prime minister Jose Socrates, whose Socialist Party was heavily defeated by the conservatives in the June 2011 elections because of public repudiation of the measures. The new austerity measures have a particular bite now because they include a 50 percent tax on Portuguese workers’ customary Christmas bonuses. This comes on top of a dire situation with 12.4 percent unemployment, and a national debt burden of 100 percent of annual gross domestic product.

Portugal is part of a group of countries referred to as the PIIGS (Portugal, Italy, Ireland, Greece and Spain) which are having serious problems triggered by the world financial and economic crisis. Ireland, Portugal and Greece, with 4, 10 and 11 million inhabitants respectively, are relatively small scale. But Spain, with 41 million, and Italy with 59 million, are large enough economies that the possibility that they default raises fears for the whole European Union and Euro area.

International finance capital, European banks and the governments of the wealthier European countries have been demanding action to reduce deficits as a condition for further help. PIIGS governments have responded by cutting their social welfare systems, laying off millions of workers, slashing wages and pensions, privatizing state enterprises, and gutting labor protections.

The communist left and allies in each country, along with major labor and civic organizations, have reacted to this with mass protests and strikes. There are almost continuous demonstrations in Greece, where the government of former Prime Minister George Papandreou’s Pan Hellenic Socialist Party (PASOK) has been replaced, under pressure from international creditors, with a three-party coalition including PASOK, the right-wing New Democratic Party and the ultra-rightist Popular Orthodox Rally (LAOS) party. There also have been ongoing demonstrations in Spain, and mass demonstrations are building in Italy, where right-wing Prime Minister Silvio Berlusconi was, at long last, forced to resign Nov. 12.

Not only right-wing governments, but also social democratic, or “Second International” socialist parties in power in Greece, Portugal and Spain have imposed austerity in spite of the fact that it has alienated their working class (blue and white collar) social bases. This has led to falls from power by the social democrats in all these countries: in Spain and Portugal through electoral defeats; in Greece through agreeing to coalesce with the right and ultra-right.

In contrast, the communist parties have taken a firm stand against the austerity measures, calling rather for taxes on the rich and drastic changes in their countries’ participation in the European Union and the Euro currency group rather than have their countries’ budgets balanced on the backs of the workers. Yet the electoral strength of the communists and their allies is not yet sufficient to let them fill the political space caused by the social democrats’ fall, so the right has advanced electorally in Portugal and Spain. But the right’s program is more austerity, which working people will clearly not accept.

And now two important bond rating agencies, Moody’s and Fitch, have downgraded Portugal’s sovereign debt to BB+ from BBB-, i.e. to junk bond status, which means that in spite of all the suffering, it will be very hard for Portugal to borrow. The austerity strategy can not be seen as a success.

So the success of the Portuguese general strike may be a harbinger of a further leftward mass trend. Jeronimo de Silva, secretary general of the Portuguese Communist Party, feels so, stating, “The struggle ahead will be even more demanding, but the strength and determination that this strike showed brings confidence that it is not only necessary, but possible to materialize a patriotic and left-wing policy that will contribute to save the country from the path of disaster that they [monopoly capital and the right] want to impose on it.”

Photo: A Portuguese Communist Party poster calling for a general strike stands at Lisbon’s nearly deserted Rossio main square Nov. 24, during a general strike as trade unions protest austerity measures linked to a euro78 billion ($104 billion) international bailout. With no ferries working and few trains running many commuters were unable to get into town that morning. Government offices, medical services, school classes, mail deliveries and trash collection were all affected. (AP Photo/Armando Franca)