Anti-austerity general strike shuts down Portugal

Workers at ports, municipal buildings and the post office had also struck, according to the CGTP union, while factories in many parts of the country were closed, hospitals provided only emergency services and rubbish collection was suspended.

Demonstrations saw thousands of mostly young people descend on the streets of Lisbon, although, in a counterpoint to images seen from fellow EU-IMF bail-out nation Greece, the marches were largely peaceful apart from scuffles in front of the parliament building, where seven protesters were arrested and one policeman hospitalised.

The action, the second general strike in the country since the crisis began, saw rebel officers who participated in the 1974 revolution join the protests as marchers chanted: “Spain, Greece, Ireland, Portugal, our struggle is international,” according to local reports.

The government was eager to downplay attendance numbers, saying that only 11 percent of public workers participated in the strike, but union leaders have insisted it was one of the biggest in the country's history, drawing a larger crowd than in last year's strike, when an estimated 3 million people took place.

“It was a strike with a very strong signal against the impoverishment of the country,” said Carvalho da Silva, leader of CGTP, Portugal’s largest trade union, at an evening press conference.

“There is a real sense of outrage,” he added.

The industrial action took place as ratings agency Fitch decided to lower the country’s rating to junk status, from BBB- to BB+, amid “a worsened European outlook”.

"The country's large fiscal imbalances, high indebtedness across all sectors, and adverse macroeconomic outlook mean the sovereign's credit profile is no longer consistent with an investment-grade rating," the agency said.

Unions mounted the strike on the eve of debates in the parliament on Friday on the proposed budget for 2012, which includes tax hikes and spending cuts to comply with bail-out demands from the EU and the International Monetary Fund. The bill is to be voted on next week.

Portugal applied for financial assistance earlier this year after a package of austerity measures proposed by the then minority centre-left government was defeated.

In a prelude to recent elections in Spain, a ballot in June saw an historically low turnout and gave the centre-right People’s Party of current prime minister Pedro Passos Coelho an absolute majority.

Union leaders have said they would not hesitate to call for more action if the government continues to refuse to negotiate a budget that might enjoy a larger popular backing.

“Do they want a climate of dialogue or one of social conflict? We don’t want to, but if the government forces us we will go on another strike,” said João Proença of UGT, a socialist trade union.

Separately, Mario Soares, the country’s first democratically elected president after the fall of dictatorship in 1974, has launched a manifesto saying that international finance is threatening democracy.

"We cannot democratically salute the so-called Arab spring and be afraid of [occupying] our own streets and squares. We cannot sit back and ignore the growth in international financial anarchy and the dismantling of countries, which puts into question the very survival of the European Union."