Portuguese court blocks key part of austerity plan
The Portuguese government might extend a pay cut for civil servants to others after a court blocked a key part of its deficit-cutting programme by saying it was unconstitutional.
In Portugal nearly all public and private sector employees receive an extra month's salary in the summer and at Christmas Photo: EPA
Centre-right Prime Minister Pedro Passos Coelho said: "The only solution to hold to the intention of adjusting the finances, essential if Portugal is to meet its commitments, is to extend the measure to others."
Newspaper Diario de Noticias estimated that the ruling would cost the state €2bn in 2013.
The country's Constitutional Court judges that since a plan to limit extra holiday and Christmas pay is targeted only at public sector workers, it infringes basic principles of equality.
In Portugal nearly all public and private sector employees receive an extra month's salary in the summer and at Christmas.
The government wanted to abolish this in order to meet tough agreements following a eurozone bailout.
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http://www.telegraph.co.uk/finance/financialcrisis/9380434/Portugue...
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