Huge rallies in Portugal as anger over tax hikes grows

Reuters News

9/15/2012 2:25:34 PM - Reuters News

By Andrei Khalip

LISBON (Reuters) - Over 100,000 protesters marched in Lisbon and many thousands in other Portuguese cities on Saturday against new tax hikes that have shattered the political consensus behind austerity imposed by an EU/IMF bailout.

Organised via the Internet, the rallies brought together Portuguese from all walks of life, chanting: "Out of here! IMF is hunger and misery!" and calling on the centre-right government to resign.

"Stop this government before it halts the country!" read one placard in Lisbon, where tens of thousands crammed the main Republica thoroughfare and nearby streets, marching past IMF offices cordoned off by riot police. Some threw tomatoes and plastic bottles at the building.

A huge rally was held in Porto and smaller ones in other cities and towns.

"People are fed up with being robbed by this government's policy, which now threatens to strangle us. If there's enough of us today in the streets we'll show that there is a complete divorce between this government and the will of the people," said bank worker Joao Pascual, 56.

Andre Pestana, 35-year-old unemployed teacher, said: "It's time to say enough to robbery and lies. The government has failed on all its promises ... I hope this rally is the first step in the process of changing things."

Tax hikes and spending cuts imposed since last year's bailout have contributed to record unemployment above 15 percent and pushed the economy into its worst recession since the 1970s.

On Thursday, the main opposition Socialists threatened to end cross-party backing for the 78-billion-euro bailout by voting against the 2013 draft budget unless the government drops its planned increase in the social security levy for all workers to 18 percent from 11 percent.

RETHINK

Broad political consensus behind austerity had until now differentiated Portugal from other euro zone strugglers like Greece, the scene of frequent unrest over austerity.

The government will not present the draft budget until mid-October and many protesters said they hoped the administration would rethink its policy.

Two opinion polls, including one by Eurosondagem pollsters published on Saturday, have shown support for the ruling centre-right Social Democrats falling behind the Socialists for the first time since the June 2011 election.

The ruling coalition, which also includes the rightist CDS-PP party, would still win if elections were held today, but would no longer have an absolute majority in parliament.

In the Eurosondagem poll, the Socialists led with 33.7 percent of voting intentions, followed by the Social Democrats with 33 percent, and 10.3 percent for CDS-PP. Two smaller leftist parties had 9.3 and 7 percent.

There are signs of tensions within the coalition, as CDS-PP has said it is opposed to tax hikes.

Expresso weekly newspaper on Saturday quoted CDS-PP leader and Foreign Minister Paulo Portas as saying: "I will not throw the country into an irresponsible political crisis, nor will I strip the CDS of its identity".

President Anibal Cavaco Silva has called a meeting of his consultative State Council for next Friday. Although the president's role is largely ceremonial, he can veto bills including the budget and also act as mediator between the government and opposition.

Many of the banners carried by protesters called on the president to intervene and block the tax hike.

Criticism of the tax hikes grew louder this week after Portugal's lenders agreed on Tuesday to relax the country's fiscal goals under the bailout.

(Additional reporting by Miguel Pereira; editing by Andrew Roche)