Courtesy of Mish.
Last week, ahead of a ruling by the Portuguese Constitutional Court on whether or not the austerity measures it approved were legal, Portugal’s PSI stock market took a dive.
PSI Stock Index
On March 25 the index was at 6023. It closed at 5637 on April 5 a decline of 6.4%
Court Rejects Budget
On April 5, Portugal constitutional court rejects budget articles
Portugal’s Constitutional Court has ruled several key articles of the 2013 state budget unconstitutional.
It rejected four out of nine contested austerity measures from the budget.
It will deprive the state of some 1.5bn euros (£1.3bn) in savings the government had said were necessary to meet the terms of a eurozone bailout.
The court rejected a measure to scrap summer holiday bonuses for public sector workers and pensioners, as well as cuts to unemployment and sickness benefits.
Prime Minister Pedro Passos Coelho did not react to the decision immediately but called an extraordinary cabinet meeting for Saturday.
For most Portuguese workers, the annual tax rises are equivalent to more than a month’s wages. The standard income tax rate is rising from 24.5% to 28.5%….
