By BARRY HATTON, Associated Press
LISBON, Portugal (AP) — Transport strikes in Portugal brought misery for thousands of commuters Thursday, and trade unions vowed to step up their fight against the government's latest batch of austerity measures.
The center-right government announced Wednesday steep increases in income taxes next year to meet the financial targets demanded in return for last year's €78 billion ($100 billion) bailout.
Finance Minister Vitor Gaspar said the increases would be "enormous."
They come on top of pay and welfare cuts and tax hikes this year that, as in other European countries caught in the continent's financial crisis, have fueled growing discontent. Portugal is in a deep recession, with record unemployment of 15.9 percent.
Compounding the coalition government's difficulties, Prime Minister Pedro Passos Coelho had told the Portuguese that their belt-tightening sacrifices over the past 18 months would pay off. The recession would bottom out this year, and the jobless rate would level off at 16 percent, he said.
But the government now says the economic contraction will extend into 2013 — a fourth year of recession in five — and unemployment will rise to 16.4 percent.
The main opposition Socialist Party, the Confederation of Portuguese Industry, the country's two trade union confederations, and many newspaper headlines Thursday used the same word to describe the tax hikes: "brutal."
Rail services were at a virtual standstill due to a strike by engineers. The Lisbon subway also closed during the morning rush-hour due to a walkout, while suburban bus services were also disrupted.
The government, meanwhile, defended itself in Parliament against a motion of censure brought by two small left-wing parties. Though the motion was doomed to fail because the governing parties have an overall majority of votes, it exposed the prime minister to a deluge of withering criticism from opposition lawmakers who blamed his austerity policies for choking growth.
"Everything is going wrong in our country," said Antonio Jose Seguro, leader of the main opposition Socialist Party. "This prime minister has killed our economy."
Passso Coelho said the only alternative to austerity was leaving the eurozone and returning to a national currency. "That would mean giving up our status as a developed economy," he said.
Passos Coelho is widely expected to reshuffle his Cabinet after the 2013 state budget is unveiled on Oct. 15.
Meanwhile, trade union leaders were meeting Thursday to decide how to fight the latest measures. The General Confederation of Portuguese Workers, the largest union group with some 600,000 members, has already announced a general strike against austerity on Nov. 14.
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