The date for a general strike by two of Portugal’s largest unions will be set on Wednesday.

The organisations have decided to take action in the face of more austerity measures revealed by the government in the budget for next year.

Both groups have 1,250,000 members combined, which is 90 per cent of unionised workers. They last held a general strike in November 2010.

Joao Proenca, the head of the UGT union, said the government is making the economic situation worse: “The government was elected to get the country out of the crisis, but these measures aren’t taking the country out of the crisis. The measures this government is taking clearly increase social conflict.”

Portugal’s economy is struggling and the country’s finance minister has predicted the economy will contract by five per cent over 2011 and 2012.

However, the tough measures including spending cuts and tax increases are as part of a 78 billion euro bailout plan agreed with the EU and IMF.

Ordinary people are feeling the pinch with unemployment at 12.5 per cent.