Portugal’s main trade union, the General Confederation of Portuguese Workers (CGTP), has fiercely condemned as a “declaration of war against workers” a new set of austerity measures introduced by the government in the debt-ridden country.
The move came after Portuguese Prime Minister Pedro Passos Coelho on Friday announced a 7-percent increase in all workers’ social security contributions in 2013 from 11 percent to 18 percent.
Passos Coehlo added that he plans to cut companies’ welfare contributions to 18 percent from 23.75 percent in an attempt to tackle a sharp rise in unemployment rates in the crisis-hit country.
This is while CGTP says the new measure are slated to target struggling family budgets with CGTP leader Armenio Carlos denouncing the government’s decisions as a “declaration of war against workers.”
“This will lead to a reduction in consumption, companies going bankrupt, the destruction of employment, job losses, inequality, poverty and social exclusion,” Carlos said.
Also on Friday, fresh data revealed that Portugal’s gross domestic product (GDP) contracted 1.2 percent in the second quarter of 2012.
Official figures released by the National Statistics Institute further showed that the Portuguese economy has shrunk 3.3 percent in the quarter compared with last year’s corresponding period.
Portugal expects its economy to contract 3 percent this year as it copes with the deepest recession it has gone through since the 1970s.
The center-right government has introduced extensive austerity measures, including slashing civil servant wages and increasing taxes, in an attempt to keep the lid on Portugal’s dwindling economy. The measures have however upset the domestic consumption.