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Last Updated:  Wednesday, 26 March, 2003, 20:59 GMT
Brazil's Lula faces first strike test
Brazilian metalworkers have gone on strike in the first large labour dispute to confront centre-left President Luiz Inacio Lula da Silva since he took office on 1 January.

Forca Sindical, one of Brazil's two leading union confederations, said the stoppage by 23,000 workers had affected 40 factories in the industrial city of Sao Paulo.

The workers are asking for a 10% pay rise to compensate for inflation, which has jumped by almost 10% in the last four months since the last pay deal in December.

Inflation rocketed in Brazil after financial markets caused a 35% devaluation of the currency, the real, last year over fears about the election of Mr da Silva.

The union said 21 factories accepted the demands of the strikers.

Honeymoon over

The indefinite strike is expected to be rolled out to include up to a third of the 700,000 metalworkers Forca Sindial represents across Sao Paulo.

Mr da Silva, a former metalworker and union leader, has faced increasing criticism over his policies, including from within his own Worker's Party.

During the election Mr da Silva promised to kick start the economy and cut unemployment.

His government argues wage rises would further stoke inflation and damage the country's growth prospects.

Power politics

Brazil's largest trade union group, CUT, which has close links to Lula's government, has made no wage demands yet but has not ruled out them out.

Mr da Silva led CUT in the 1970s.

CUT leaders have also backed Mr da Silva's tax and pension reforms despite government opposition to raising pay for public sector workers.

Forcas Sindical's leader, Pereira da Silva, who is no relation to the president, has denied the strike is politically motivated.

"We are striking strictly for economic reasons. The work stoppage has no political connotations whatsoever," he said.

He stood on a rival ticket in October's presidential election.

Brazil braces for testing times
13 Jan 03 |  Business

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