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Opposition takes Portugal austerity measures to court

Published on 09/01/2014

Portugal's main opposition party said Thursday it has challenged several austerity measures before the country's constitutional court, which has tended to strike down cuts.

The head of the Socialist Party’s parliamentary group said it disputed cuts salaries and retirement benefits to state workers, means-testing of widow benefits, and cuts to unemployment and sickness benefits in the 2014 budget.

The court last December already blocked a provision in the 2014 budget that would have cut up to 10 percent from civil service pensions over 600 euros ($800) per month, forcing the government to search for other ways to make the 388 million euros in expected savings from the measure.

The government announced Thursday it would apply a special temporary tax to pensions above 1,000 euros to make up part of the shortfall as it seeks to lower the public deficit this year to 4.0 percent of GDP.

The constitutional court has made a series of rulings blocking austerity measures by the government, including plans to trim the civil service, causing a political crisis that nearly brought down the government which is implementing reforms and balancing public finances under Portugal’s 78-billion-euro EU-IMF bailout.

The three-year rescue programme ends in May and Portugal tested Thursday whether it will be able to return to the markets with a successful sale of 3.25 billion euros in five-year bonds.