Portugal hit by new budget cuts to avoid bailout

  • Portugal's prime minister on Sunday announced that a court ruling rejecting parts of his government's budget will lead to deeper spending cuts.

    Pedro Passos Coelho said social security, health, education and public enterprises would be cut.

    The move is to enable the country to avoid a second eurozone bailout, he added.

    In a televised statement to the nation, Coelho said: "Today, we are still not out of the financial emergency which placed us in this painful crisis.”

    “After this decision by the Constitutional Court, it's not just the government's life that will become more difficult, it is the life of the Portuguese that will become more difficult and make the success of our national economic recovery more problematic."

    The Constitutional Court struck down more than $1.3 billion of savings that the government said was needed to meet the conditions of its existing bailout.

    Opposition leaders have called on the government to resign, claiming it has lost credibility after two budgets in two years were ruled unconstitutional.

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