LISBON – Portugal’s constitutional court Friday rejected several aspects of the country’s belt-tightening budget for 2013, seen as crucial to austerity efforts promised to creditors by the center-right government.
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 steps to meet the terms of a ?78 billion ($101 billion) EU-IMF bailout granted in 2011. Local media said the decision would see the state lose out on about ?1.2 billion 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 in a statement, adding that the decision covers all of 2013 and therefore carries retroactive powers.