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Portuguese PM vows further cuts

Portuguese PM vows further cuts
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The Portuguese government says it will further cut spending to meet bailout targets agreed with its lenders, after a constitutional court rejected four of its planned austerity measures.

Prime Minister Passos Coelho said the court’s ruling posed a conundrum, but the government would find a way around it:

“I will instruct the ministries to proceed with respective spending cuts to compensate for the constitutional court’s ruling,” he said.

The rejected austerity measures are predicted to deprive the state of around 900 million euros that will now have to be found elsewhere.

The measures were supposed to raise a total of around five billion euros net income for the government and the European Commission has said Lisbon must stick to this figure if it wants more time to repay bailout loans.

Portugal is seeking an extension on paying back its emergency loans beyond 2022.

The PM has ruled out raising taxes any more to fill the void as this year’s budget already features some of the biggest tax hikes in living memory.