By Shrikesh Laxmidas and Daniel Alvarenga
LISBON (Reuters) - Portuguese unions staged what they said was the country's largest general strike on Wednesday, pressing the government to scrap austerity measures intended to ward off a debt crisis that is spreading through the euro zone.
Any wavering in the Socialist government's commitment to austerity measures could push up Portugal's borrowing costs in the same vicious spiral that forced Ireland, and before it Greece, to seek international aid.
As the country's two biggest unions stopped trains and buses, grounded planes and halted services from healthcare to banking, the spreads of 10-year Portuguese bonds over German benchmarks hit a euro lifetime high.
"It is a bigger strike than the one in 1988," Joao Proenca, the head of the UGT union which is traditionally close to the ruling Socialists, told a briefing. "We consider it to be the biggest strike ever."
Manuel Carvalho da Silva, head of the country's biggest CGTP union, said over three million people in the country of 10 million took part.
"This strike offers an unequivocal sign that the government and the political forces must interpret," Carvalho da Silva said. "The way out of the crisis cannot be through sacrifices made by the workers."
Labour Minister Maria Helena Andre said participation varied widely, without providing specific numbers.
"We are facing a very reduced participation in the private sector of the economy," she told a briefing.
The CGTP said all ports were shut and check-in counters at Lisbon's main airport were empty. National airline TAP cancelled most flights. There were no mass protests.
Lisbon was relatively quiet as many workers were prevented from going to work but roads in and around the capital were choked with traffic as commuters opted to use their cars. Cafes and shops were open and vans delivered goods as usual.
Prime Minister Jose Socrates has repeatedly ruled out the need for a bailout, pledging to stay the course to cut the budget deficit through tough wage reductions for civil servants, tax hikes and major cutbacks to public services.
"What's coming for the new generation is very sad. I don't see a solution for them aside from emigrating to other countries where they may have new opportunities," said Madalena Costa, 66, a retired school teacher as she passed a train station emptied by the strike.
Others were angered by the protest, saying the country could not afford the stoppage, the first general strike by the country's top two unions since 1988.
"This strike is completely absurd," said Pedro Silva, 36, a biology teacher at a private school, who had to take a taxi to work. "The Portuguese have to understand that there is no money and if there is no money people have to work to get it."
VW PLANT HALTS PRODUCTION
The country's largest exporter, Volkswagen's Autoeuropa plant, halted production altogether. The plant produces up to 500 cars on an average day. Lisbon was plastered with banners for weeks urging workers to join the strike.
Portugal has suffered from years of low growth -- unlike other weak euro economies such as Ireland and Spain that went from boom to bust -- and waning competitiveness which economists say undermines its ability to ride out the debt crisis.
Still, analysts doubt the strike will influence the government's decisions or prevent parliament from voting to pass the 2011 budget on Friday. The opposition Social Democrats also support the budget, giving the Portuguese few political options.
"It is not the government's hand anymore that rocks the cradle. We are at the whim of creditors," Pedro Santos Guerreiro, director of Jornal de Negocios business daily, wrote in an editorial.
"It is true that 10 million strikers will have the same impact as 10 -- none."
Although the Portuguese economy is growing this year, economists fear it will slide back into recession in 2011 as higher taxes and civil servant wage cuts of five percent bite into consumption.
Unemployment, already at its highest since the 1980s at 10.9 percent, could rise further.
(Additional reporting by Andrei Khalip; Writing by Axel Bugge; Editing by Louise Ireland)
