Portugal austerity cuts rejected in part

The top court in Portugal has partially rejected the Lisbon government’s plans to adopt fresh austerity measures, saying such a move does not guarantee the principle of equality.

According to Press TV, on Thursday, Joaquim de Sousa Ribeiro, the head of Portugal’s Constitutional Court, dismissed the center-right government’s plans to impose a levy of two to three percent on public sector pensions starting at 1,000 euros (USD 1,300).

Lisbon’s plan to charge tax on pensions would bring in some 372 million euros in extra revenue in 2015, but Sousa Ribeiro said such a measure did not ensure “fairness between generations.”

However, the court ruled that the government was authorized to cut the salaries of the public sector workers earning more than 1,500 euros (USD 2,000) a month only through next year.

Lisbon had earlier warned against any rejection of its plans to introduce new austerity reforms, arguing that this would undermine its objective of slashing the country’s budget deficit to four percent of gross domestic product (GDP).

In late May, the court dismissed the austerity measures proposed by the government in the 2014 national budget as part of Lisbon’s ongoing cutbacks.

After the Portuguese economy stumbled into recession, the country negotiated with the International Monetary Fund (MF) and the European Union (EU) for a bailout loan in 2011.