Portugal flights grounded by general strike over austerity measures

All international flights to and from Portugal were canceled Thursday as a general strike over austerity measures caused chaos for the country’s transport network.

Portugal, which earlier this year became the third of those countries that use the euro to receive a bailout, after Greece and Ireland, is battling to reduce its deficit through a combination of tax hikes and deep cuts to public services.

The strike was called last month by two of the country’s main unions amid wide public unhappiness over the proposed measures.

Rui Oliveira, a spokesman for Portugal’s airport authority at Lisbon Airport, told CNN the country’s airports were open but no international flights were taking off or landing.

Only three domestic flights are scheduled to operate Thursday between Lisbon and the islands of Madeira and the Azores, he said. In total, 481 flights were canceled, 311 of them in the capital, Lisbon.

Lisbon’s Metro system has closed its doors while only a handful of buses are running in the capital, Portugal’s Publico newspaper reports.

Those taking part in the action are rallying in Rossio Square, in the heart of Lisbon.

Lucia Macau, a spokeswoman for the UGT national labor union, told CNN the strike looked set to be one of the biggest this year.

“People are very unhappy about all the measures imposed to the country, especially the scale of austerity the budget implies, and cuts … which are leading to a gradual impoverishment and exploitation of the people – and that has to be stopped,” she said.

It was too early to tally up the numbers taking part in the strike, she said, but workers from Portugal’s education and health sectors had joined transport employees in the labor stoppage.

“On the transport system the effects are very big,” she said. “It seems this paralysis is affecting the country from north to south.”

Amavel Alves, coordinator of the transport and communications union FECTRANS, told CNN that participation in the strike was very high.

He said 98% of rail workers and 85% of postal workers had walked out, while the Metro in Lisbon and water transport were totally paralyzed.

None of the 70 ships that were supposed to dock at Portuguese harbors Thursday had done so, he said, with some remaining out at sea and others going instead to neighboring Spain.

Meanwhile, ratings agency Fitch downgraded Portugal’s sovereign debt to junk status Thursday, with lower growth expected in light of the “worsened European outlook,” it said.

“The country’s large fiscal imbalances, high indebtedness across all sectors, and adverse macroeconomic outlook mean the sovereign’s credit profile is no longer consistent with an investment-grade rating,” the agency said.

The recession will make the government’s deficit-reduction plan more difficult over the next two years, Fitch said, but its commitment to the program is judged to be strong.

While Portugal’s debt rating was lowered one notch, to BB+ from BBB-, the outlook was negative, meaning the agency believes it could slip still further.

Portugal applied to Europe’s bailout fund, the European Financial Stability Facility, in April and a €78 billion ($105 billion) bailout was agreed to the following month.

Prime Minister Pedro Passos Coelho promised on taking office in June to tackle Portugal’s burgeoning financial crisis, including taking steps to meet the European Union requirements for deficit reduction and revenue hikes in order to receive bailout funds.

The austerity budget for 2012 put forward by his center-right government is due to be approved later this month.

His predecessor as prime minister, Jose Socrates, stepped down in March after his socialist government was unable to push though austerity measures intended to avoid the need for a bailout.

CNN’s Sofia Fernandes and Laura Smith-Spark contributed to this report.