URGENT-Portugal top court rejects bill on firing public sector workers

LISBON Thu Aug 29, 2013 1:20pm EDT

LISBON Aug 29 (Reuters) - Portugal's Constitutional Court on Thursday dealt a new blow to the government's austerity efforts under an EU/IMF bailout by rejecting a bill that would have effectively allowed the state to fire public sector workers after a requalification period.

The bill's direct impact on the 2014 budget deficit is relatively low, but it is considered important because of its potential effect on spending cuts. The rejection also sends an alarm signal to investors as more planned austerity measures could be thrown out, endangering bailout targets.

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