Court overturns savings decisions in portugal

Prime minister pedro passos coelho on saturday expressed his "deep concern" about a court ruling that the previous evening had declared several austerity decisions by the center-right government illegal.

"A way out will not be easy," the head of government stressed. "The government will not overturn its decision"."It will respect the ruling, but will not allow portugal to fall back into crisis and have to ask for help from its EU partners again.

The court had partially upheld the constitutional claims of the left-wing opposition parties and declared salary deductions for public service employees illegal. It justified the decision by saying that the burdens were unevenly distributed.

The newspaper "público" put the resulting budget gap at more than 1.1 billion euros, while the rival paper "diario de noticias" spoke of 750 million euros.

The constitutional court found three out of four contested cuts in the 2014 budget to be a violation of the constitution. These included salary cuts in the civil service applied to incomes of more than 675 euros a month, the taxation of unemployment and sickness benefits, and restrictions on survivors' pensions.

The constitutional court had already overturned a number of the government's austerity plans in the past. In 2011, portugal was saved from national bankruptcy by the EU and the IMF with an aid package of 78 billion euros. In return, lisbon had to commit to a drastic austerity policy. Two weeks ago, the country left the bailout fund; it is now financially back on its own two feet again.

A few hours before the constitutional court ruling, the government had survived the sixth motion of censure by the left-wing opposition. Members of parliament rejected by 123 votes to 89 a dissolution of the center-right government.

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