Hot on the heels of protests from almost every quarter of the public sector, news came last night that the government’s controversial plans to cut pensions had been thrown out by Portugal’s Constitutional Court.
The Court’s unanimous decision – particularly when the coalition has repeatedly stressed that any Plan B could only hit people harder – puts the future of the current administration once more in the spotlight.
Calling for the government’s resignation, leaders of the Socialist, Communist and Left Bloc parties said there was now “no alternative” as the Constitutional Court’s ruling left the coalition with “no further options to penalise those who had worked their entire lives”.
Socialist leader Antonio José Seguro said it was another clear defeat for the government and stressed the country now waited for a word from the President of the Republic Cavaco Silva – who had referred the State Budget to the Constitutional Court in the first place.
As news channels buzzed, the bottom line was that the coalition parties and Brussels were in sombre moods. In a short statement, a clearly uncomfortable President of the European Commission said he was “confident” that Portugal “would certainly find a solution for this situation” – but his facial expression seemed to suggest the opposite.
Durão Barroso continued that he hoped the setback would not compromise Portugal’s continuation with its adjustment plan and return to financial markets later next year.
The bombshell – which leaves a €400 million hole in the State Budget – came less than 24-hours after Subir Lall, the head of the IMF’s mission to Portugal, warned that the country faced another 10-15 years of adjustment before its economy could hope to be back on track.
Fears now are that an increase in IVA (VAT) may be the knee-jerk reaction to this latest spanner in the works. Communist leader Jerónimo Sousa said on television last night that such a move would be one of the “blindest and most penalising decisions for the Portuguese people”.
Unions out in force backing calls for government’s resignation
Not even the rain last night could dampen people’s fervour. Hundreds came out in force in Lisbon, jubilant over the decision by the Constitutional Court and waving banners calling for the government’s resignation.
Buses organised by CGTP workers’ union brought supporters from Santarém, Beja, Leiria, Évora and Setúbal – with all the protesters clamouring for President Cavaco Silva to veto the controversial State Budget and call early elections.
CGTP leader Arménio Carlos condemned the government’s policies of austerity as “attacks on human rights”, and welcomed the decision of the Constitutional Court saying it was “a victory for all the Portuguese people who didn’t give up”.