Pedro Passos Coelho, Portugal’s prime minister, called an emergency cabinet meeting on Saturday in a bid to keep the country’s €78bn bailout programme on track after the constitutional court rejected austerity measures that were critical to meeting deficit-reduction targets.
The court ruled on Friday night that four out of nine contested measures – including planned cuts in public sector pay and state pensions – breached a constitutional requirement that the burden of fiscal policy be fairly distributed and not discriminate between the state and private sector workers or pensions.
The measures represent about 20 per cent of the €5bn in revenue and savings that the government expected to generate from its austerity measures.
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