Brussels, 20/12/2013 (Agence Europe) - The country's lenders were expecting it. On Thursday, Portugal's constitutional court rejected a flagship measure from the country's austerity programme in the form of a measure for the 2014 budget that would have slashed pensions for former civil servants of over €600 a month by around 10%. The judges ruled that the measure is unlawful because it violates the constitutional principle of “trust”. The case was referred to the court by the Portuguese president, Anibal Cavaco Silva, and the 13 judges reached a unanimous decision.
The ruling comes three days after a positive assessment by the country's troika of lenders (European Commission, European Central Bank and International Monetary Fund), who spent the first fortnight of December in Lisbon. The lenders had already warned Portugal of the danger of not responding rapidly to any negative ruling by the supreme court, urging it to introduce alternative measures without delay. The ruling deprives the government of some €388 million, a tenth of the €3.9 billion austerity package.
Portugal's prime minister, Pedro Passos Coelho, hinted on Monday that a negative ruling by the constitutional court could force the government to put up taxes, which he said would be a very bad solution in the medium and long term.
At a press conference during the European summit on Thursday evening, the president of the European Commission, José Manuel Barroso, said he was confident that the government would find a solution quickly in order not to jeopardise its return to the markets scheduled for June 2014. (SP/transl.fl)
The head of the Eurogroup, Jeroen Dijsselbloem, said in a press release that he had taken note of the court's ruling and welcomed the Portuguese government's commitment to find alternative measures rapidly that were high-quality and of equivalent size, in order to meet the public deficit reduction target of 4% of GDP in 2014.
Dijsselbloem called for the reform effort to continue with a credible budget consoldiation strategy and rigorous implementation of structural reforms that he described as vital for investor confidence. (SP/transl.fl)