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Major austerity drive in Portugal deemed illegal

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Major austerity drive in Portugal deemed illegal


Demonstrations appears to have paid off in Portugal, where the constitutional court ruled unanimously that one of the government’s key austerity policies was illegal.

The government had planned to slash public sector pensions over 600 euros a month by 10%, but the court ruled that would constitute a “violation of trust”.

The decision represents a significant reverse for the centre-right government’s 2014 austerity budget. It would have saved some 388 million euros, or nearly 10% of the 3.9 billion euro public spending cuts the government wants to introduce.

Other ways of making savings must now be sought, with the government warning it may have no alternative but to raise taxes.

However the troika helping Portugal reduce its debt note that rises would threaten economic recovery. One of the current governments coalition partners, the Conservatives, have already ruled out any such hike.

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