LISBON (Reuters) - Portugal's parliament rejected on Friday proposed retroactive pay hikes for teachers, quelling the prospects of a political crisis following last week's threat by the government to resign if the measure was approved.
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On May 2, the two conservative parties in parliament joined forces with the far left in a committee to approve pay rises for teachers that had been held back over nine years - a move the government said would undermine efforts to balance the budget.
They have since backtracked, submitting separate motions specifying pay rises only if public finances can sustain them, and accused Prime Minister Antonio Costa of creating an artificial crisis in what they said was politicking before the country's general election in October.
(Reporting By Andrei Khalip, editing by Axel Bugge)