Portugal faces general strike in test of austerity

Portugal's largest union, the CGTP, hopes to mobilize mass support but the Portuguese have shown little interest in imitating the kind of protests seen in Greece, despite record unemployment and the worst recession in decades.

Some economists fear Portugal may be pushed into seeking a second bailout from its European partners, but the centre-right government is betting that relative public apathy will help it impose painful spending cuts and policy reforms in order to drag the country out of its debt crisis.

The second largest union, the UGT, is not backing Thursday's strike and has signed up to labor market reforms that the strikers say will roll back hard-won workers' rights.

The UGT, which is allied to the opposition Socialist Party, has urged opponents of austerity to show restraint, warning that Portugal could descend into the kind of chaos seen in Greece.

But the CGTP's new Communist leader, Armenio Carlos, is eager to put up a fight against spending cuts, salary reductions and the erosion of workers' benefits under the reforms imposed as a condition of last May's bailout from the European Union and International Monetary Fund.

Those preparing to strike say the new labor laws, which make it easier to hire and fire staff and which cut compensation for workers, mark the biggest step backwards for workers since Portugal's return to democracy in 1974 after military rule.

"Tomorrow, there will be a sort of a test for the new union leadership," said Jose Adelino Maltez, a political scientist at Lisbon Technical University. "They will try to show that they can go beyond the usual stoppages in the public service and transport, that the movement is broader than its Communist supporters."

A CGTP spokeswoman said all major public transport services would join the stoppage, including trains, the Lisbon underground and the ferry boats that take workers across the Tagus River to the capital.

With public transport shut down or running minimal services, the main impact of the strike could be in stopping people getting to work.

"I don't expect the country to stop, but we can expect a strong showing, maybe with some export-oriented companies halting output to give a signal that there is a strong unionized force in Portugal to be reckoned with," said Maltez.

Posters urging workers to join the strike have been put up around Lisbon and big protest marches are planned for Thursday afternoon.

"This kiss leaves us penniless," read one poster, showing Prime Minister Pedro Passos Coelho kissing German Chancellor Angela Merkel's behind.

This year's harsh economic downturn - the worst since the 1970s - has pushed unemployment above 14 percent and the government expects the economy to contract by 3.3 percent.

But the centre-right government still commands strong support despite promising tough times ahead when it came to power last year, suggesting many Portuguese believe that the austerity measures will eventually lead to recovery.

(Additional Reporting By Andrei Khalip; Editing by Giles Elgood)