Portugal government condemns court ‘no’ to 2013 budget

Portugal is applying tough measures to meet terms for its €78bn bailout Portugal's centre-right government on Saturday condemned the constitutional court's rejection of several aspects of the country's tough 2013 budget, saying that the decision "makes it difficult" to make budget cuts promised to creditors. The court's decision would have "a negative impact" on the austerity programme underway, said government spokesman Luis Marques Guedes.
He said that the Portuguese prime minister had requested an emergency meeting with President Anibal Cavaco Silva to discuss the situation.
On Friday the court ruled that some measures in the budget were unlawful, including the scrapping of a 14th month of salary for civil servants and retirees, as well as cuts to unemployment and sickness benefits.
The rulings -- at a time of mounting public anger over the deepening austerity -- could compromise the government's need to apply tough budget measures to meet the terms of a €78bn ($100bn) EU-IMF bail-out that was granted in 2011.
Local media said the court decision would see the state lose out on about €1.2bn in savings.
"It's the laws that need to conform to the constitution and not the other way around," court president Joaquim Sousa Ribeiro said Friday in a statement, adding that the decision covered all of 2013 and therefore carries retroactive powers.
The 2013 austerity budget, approved by parliament last year, was expected to bring Portugal €5.3bn in savings, 80 percent financed by tax increases that Finance Minister Vitor Gaspar has called "enormous" but indispensable to pull the bailed-out eurozone country out of the crisis.