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Portugal won't take final bailout money because of court austerity ruling

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Portugal won't take final bailout money because of court austerity ruling

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Portugal’s government has said it is not going to take the final 2.6 billion euro installment of its bailout package.

It is not that it doesn’t need the money, but it cannot comply with the conditions imposed by the international lenders – the European Union and International Monetary Fund.

That is because Portugal’s Constitutional Court has blocked further planned austerity measures. The court said the Lisbon government could not go ahead with reductions to state pensions and government workers’ salaries.

Finance Minister Maria Luis Albuquerque told reporters they cannot meet the end of June deadline to come up with alternative spending cuts.

“The government thinks that it is not the time to make decisions about substitute measures, a decision which has the consequence that we will not receive the last tranche of the programme.”

Even without the final payment of its 78 billion euro rescue loan package, Portugal is confident it does have enough money to cover its outgoings until the middle of next year.

with Reuters