LISBON, Portugal -- A national strike against austerity measures by Portuguese labor unions on Thursday shut down many public services, but the government showed no signs of backing down from the pay cuts, tax hikes and layoffs it insists will help restore the bailed-out country's financial health.

Most services operated by the national train company CP, the Lisbon subway and city bus companies – all of them state-run – were cancelled during the 24-hour walkout, forcing commuters to use their own vehicles and congesting traffic in the capital Lisbon and Porto, the second-largest city. Airport management company ANA reported that 37 flights were cancelled by early afternoon, 32 of them at Lisbon airport, and many delays.

The protest went to the heart of the current debate in Europe over whether to ditch debt-reducing austerity policies and adopt more growth measures to pull the group of 17 European Union countries that use the euro, including Portugal, out of recession.

Portuguese business leaders and opposition political parties have joined labor unions in appealing for a change in course, but the government said it won't budge from an austerity strategy it insists will pay off in the long term.

It is preparing a new raft of reforms to cut public spending that are expected to further reduce living standards and stoke a record level of unemployment, even as Portugal weathers a forecast third straight year of recession.

"The country hasn't ground to a halt" Cabinet spokesman Luis Marques Guedes said of the strike after a meeting of government ministers. "The government believes that work is what the country needs to do."

The General Confederation of Portuguese Workers and the General Workers' Union, which together represent about 1 million workers in this country of 10.6 million people, want the center-right coalition government to ease off its spending cuts and take more steps to create jobs. Thursday's walkout was only their fourth joint protest in 25 years.

Some health centers around the country stayed shut, Portuguese media reported, while hospitals rescheduled operations and medical appointments. Many government offices had fewer staff but few private companies reported walkouts.

Portugal's European partners are keen for it to stick with its cost-cutting drive, which is viewed as vital if heavily-indebted eurozone countries are to put their three-year-old financial crisis behind them. Portugal's government debt stands at almost 124 percent of gross domestic product, the third-highest in the EU after Greece and Italy.

Also, the austerity program is a demand of foreign creditors – Portugal's EU partners and the International Monetary Fund – who lent it 78 billion euros ($102 billion) in a financial rescue two years ago. If Portugal doesn't stick with the planned cuts the creditors can stop disbursements of the bailout funds, leaving the country at risk of bankruptcy.

Nevertheless, the outlook for Portugal is grim. The jobless rate, currently at a record 17.8 percent, is forecast to hit 18.5 percent next year. The bailout creditors predicting a contraction of 2.3 percent this year after the Portuguese economy shrank 3.2 percent in 2012. The budget deficit stood at 6.4 percent of annual GDP in 2012 – higher than the 5 percent target for that year though much lower than the 10.1 percent recorded in 2010.

Already, the government has raised sales tax to 23 percent from 13 percent, while income tax hikes have costing many middle-class workers more than a month's pay. A European Commission report published Wednesday forecast further declines in household income this year and next.

Unions are also angered by the government's latest plans, which include increasing the working time of state employees to 40 hours a week from 35; increasing their monthly pension deductions while lowering their pension entitlements; and laying off some 50,000 government workers out of the total of about 583,000.

The crunch won't stop there, however.

The government, which has to find another 3.4 billion euros of savings in 2014, is due to present next month details of a deep and broad reform of how the state is run. The proposal is expected to order a further streamlining of state services and will likely fuel more protests.

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  • Protesters holding a banner that reads in Portuguese: "We Stop the Austerity. General Strike", block one of the main Lisbon avenues during a general strike, Thursday, June 27, 2013. Public transport and government offices are expected to be the worst-hit services as Portugal's two trade union confederations stage a national 24-hour strike against austerity measures. Unions representing about one million workers are protesting Thursday against debt-cutting measures Portugal was compelled to adopt by creditors in return for a euro 78 billion (USD102 billion) bailout two years ago. (AP Photo/Francisco Seco)

  • Workers form a picket line as buses from public company STCP sit idle at a bus station during a general strike, Thursday, June 27 2013, in Porto, Portugal. (AP Photo/Paulo Duarte)

  • A man stands by a subway closed gate at Lisbon's Baixa-Chiado subway station during a general strike in Lisbon, Thursday, June 27, 2013. (AP Photo/Francisco Seco)

  • Tourists look at the departure information board, with words reading "Cancelled", in Campanha railway station during a general strike, Thursday, June 27 2013, in Porto, Portugal. (AP Photo/Paulo Duarte)

  • Portuguese police officers try to clear the street of protesters as they block one of Lisbon's main avenues during a general strike, Thursday, June 27, 2013. (AP Photo/Francisco Seco)

  • A lonely passenger seen at an empty Campanha railway station during a general strike, Thursday, June 27 2013, in Porto, Portugal. (AP Photo/Paulo Duarte)

  • Buses from public company STCP sit idle at a bus station, with the words "Out of Service, during a general strike, Thursday, June 27 2013, in Porto, Portugal. (AP Photo/Paulo Duarte)

  • Portuguese police officers try to clear the street of protesters while they block one of Lisbon's main avenues during a general strike, Thursday, June 27, 2013. (AP Photo/Francisco Seco)

  • A woman stands near parked trains in the nearly deserted Lisbon's Rossio train station during a general strike, Thursday, June 27, 2013. (AP Photo/Francisco Seco)

  • A passenger boards in a commuter boat in Cacilhas, on the outskirts of Lisbon on June 27, 2013. (FRANCISCO LEONG/AFP/Getty Images)

  • An empty commuter boat crosses the Tagus river from Cacilhas to Lisbon on June 27, 2013. (FRANCISCO LEONG/AFP/Getty Images)

  • A woman passes by the closed ticketing at Santa Apolonia station during the general strike in Lisbon, on June 27, 2013. (PATRICIA DE MELO MOREIRA/AFP/Getty Images)

  • Parked trains are seen at Santa Apolonia station during the general strike in Lisbon, on June 27, 2013. (PATRICIA DE MELO MOREIRA/AFP/Getty Images)

  • Parked trains are seen at Cais do Sodre station during the general strike in Lisbon, on June 27, 2013. (PATRICIA DE MELO MOREIRA/AFP/Getty Images)

  • A man reads a sign displayed in the subway entrance reading 'Due to the strike the subway is closed' during the general strike at Cais do Sodre station in Lisbon on June 27, 2013. (PATRICIA DE MELO MOREIRA/AFP/Getty Images)

  • A seller stands by his closed ticket office in Cacilhas, on the outskirts of Lisbon on June 27, 2013. (FRANCISCO LEONG/AFP/Getty Images)

  • A man passes by a sign displayed in the subway entrance reading 'Due to the strike the subway is closed' during the general strike at Cais do Sodre station in Lisbon on June 27, 2013. (PATRICIA DE MELO MOREIRA/AFP/Getty Images)

  • Passengers leave a subway station in Lisbon just before it closes at the start of a general strike, Wednesday night, June 26 2013. Workers' unions called a 24-hour general strike for June 27 to protest the government's austerity measures and the Lisbon subway will be closed until Friday morning. Sign on the gate reads: "Due to strike the subway is closed." (AP Photo/Armando Franca)

  • A security guard closes a gate of a subway station in Lisbon, at the start of a general strike, Wednesday night, June 26 2013. (AP Photo/Armando Franca)

  • A man passes by a statue with a board that reads in Portuguese: "I will be on strike" in Lisbon, Wednesday, June 26, 2013. (AP Photo/Francisco Seco)

  • In this photo taken, June 15, 2013, Portuguese history teacher Francisco Pereira, center, talks with colleagues as they march down Lisbon's Liberdade avenue with thousands of others during a protest against cuts. (AP Photo/Francisco Seco)

  • Public bus drivers react after a workers meeting, at the company's headquarters, during a 8-hour strike ,part of a week of general transport strikes and disruptions in the country (boat, train, bus and subway) in Porto, Portugal, Tuesday, March 5, 2013. (AP Photo/Paulo Duarte)