Portugal Court Blocks Austerity Measures

The highest court in Portugal ruled that some of the austerity measures to be employed by the government to curtail deficits are not constitutional. In reaction, the central government said it would accelerate some cuts, as Portugal’s economy slips deeper into recession and unemployment reaches levels unprecedented in recent times.

If the court can block much of the austerity actions, Portugal’s cost to raise money may skyrocket, which would put the future of its bailout by the European Central Bank, European Union and International Monetary Fund in danger.

According to CNBC:

With Portugal’s main court rejecting cost-cutting measures which are central to financial aid, the country’s already faltering austerity program has been thrown into further doubt, adding to pressure on the euro zone, analysts told CNBC.

“Fiscal austerity in Portugal is failing,” Nick Spiro, head of Spiro Sovereign Strategy, told CNBC. “Portugal’s 2011 bailout program went off track some time ago. If it were not for the troika’s leniency and the dramatic rally in Portuguese debt, the program would have already failed by now.”

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.