Tens of thousands of Portuguese rallied in about 40 cities on Saturday against government’s austerity policies and the international lenders that demand the budget reforms.

The protests were aimed in particular Prime Minister Pedro Passos Coelho’s plan to raise workers’ social security contributions from 11 to 18 per cent next year, while lowering employer contributions from 23.75 to 18 per cent.

The centre-right Premier said the measure was intended to encourage hiring.

The highly indebted country has received European Union and International Monetary Fund (IMF) loans to stay solvent as it tries to fix budget and growth problems to remain in the eurozone.

Portugal’s main opposition Socialist Party withdrew its support on Thursday for the 2013 budget proposal. The government still has a majority to approve the legislation to raise taxes on income and capital, cut pensions and expand a privatization programme.

Demonstrators threw tomatoes and beer bottles at the IMF’s office in Lisbon, where police arrested two people.

In Aveiro, 200 kilometres north of the capital Lisbon, one demonstrator was severely injured when he set himself on fire.

Labour unions vowed more protests this month.

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