Portugal court strikes down portion of austerity measures

[muriel_volestrangler]

Source: CNN

Portugal's top court invalidated a portion of the government's austerity budget on Friday, according to reports from Lisbon, which may leave policymakers scrambling to comply with the terms of the country's international bailout.

The court struck down plans to cut the pay and pensions of public employees, and also rejected a tax on unemployment subsidies, The Wall Street Journal reported.

Overall, the Constitutional Court's ruling is expected to deprive the government of roughly €900 million, or $1.17 billion, in anticipated revenue from the original €5 billion austerity package.

In response to the ruling, Portuguese Prime Minister Pedro Passos Coelho will hold an emergency cabinet meeting on Saturday to discuss alternative budget plans, the Journal said.

Read more: http://money.cnn.com/2013/04/05/news/world/portugal-court-austerity/

---

BBC report: http://www.bbc.co.uk/news/world-europe-22048169

[muriel_volestrangler]

1. Portugal PM outlines new budget cuts to avoid bailout

Portugal's prime minister has said a court ruling striking down parts of his government's budget means it will have to make other deep spending cuts.

Pedro Passos Coelho said social security, health, education and public enterprises would have to be cut.

This would allow the country to avoid a second eurozone bailout, he said.
...
Mr Passos Coelho said the ruling striking down the budget's suspension of holiday bonuses for public sector workers and pensioners - about 7% of their annual income - meant it must find alternative savings or seek a second bailout.

http://www.bbc.co.uk/news/world-europe-22058461