Constitutional Court rejects pay cuts agreed with Portugal’s creditors

Pay cuts unconstitutional, says Portuguese Court

06.04.2013 - 09:59

In a setback to the austerity programme agreed between Portugal and foreign creditors, Portugal’s Constitutional Court has ruled Friday, 5/4, that several of the 2013 budget articles introducing pay cuts are unconstitutional.

 According to a statement by the 13 judges of the Constitutional Court, budget measures cutting holiday pay mainly for government workers and pensioners or reducing unemployment and sickness benefits are unconstitutional, thus rejecting four out of nine contested austerity measures from the 2013 budget.

This will deprive the state of 1.5bn euros in savings that the government considers necessary to meet the terms of the Eurozone’s 78bn euro bailout package, negotiated with the “troika” comprised of the European Union, the European Central Bank and the International Monetary Fund.

 The government scheduled an extraordinary Cabinet meeting for today, Saturday. Prime minister Pedro Passos Coelho avoided any comment on the court’s decision.

 Before the decision was announced, Portugal’s president, Anibal Cavaco Silva, said that he did not believe that the court ruling should lead to a change of government. The opposition has already been calling for the government to resign.