Refusing to be drawn into any instant decisions, Prime Minister Pedro Passos Coelho announced today (December 20) that his coalition government must “still study solutions” to the veto to across-the-board pension cuts by the Constitutional Court. But he hinted that cuts were still possible – although they might have to be more gradual.
Speaking from Brussels where he was attending meetings, Passos Coelho said: “The court admits that the measure could be constitutional in certain conditions”, writes Jornal de Notícias.
Thus the government “will bear this in mind”, said Passos Coelho.
With this latest defeat featured prominently on all news channels, Passos Coelho insisted that the government would be considering “spending cuts, as opposed to increased taxation” to compensate for the lack of savings on their pension plan. It is a declaration that suggests rumours of another IVA hike may be unfounded.
Everything has to be “very well analysed”, stressed Passos Coelho, in a “timeframe that is very tight and complex”.
The latter remark refers to the fact that Portugal is still waiting for a positive 10th assessment by the troika of the implementation of its adjustment plan – and that the bombshell delivered by the Constitutional Court once again throws the political stability of the country into the wind.