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Portugal braced for union action

Portugal braced for union action
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Trade unions in Portugal are mobilising against the government’s planned austerity measures with large demonstrations expected on May 1.

Train workers called a third day of strikes on Thursday in protest at plans to freeze public sector salaries and privatise state-owned companies.

The Standard and Poor’s agency downgraded its sovereign debt rating yesterday in a sign that investors are losing confidence in the Portuguese government’s ability to repay its debts.

As a result, interest rates on the country’s bonds are on the rise, making it more expensive to borrow.

In a bid to calm the markets, the government will introduce the austerity measures this year, instead of 2011 as planned.

Portugal has pledged to cut the deficit from 9.4 per cent of GDP last year to 2.8 percent in 2013, below the EU’s 3 per cent limit.

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