BRUSSELS, April 8 Portugal must stick to targets
agreed with international lenders if it wants more time to repay
bailout loans, the European Commission said in a statement on
Portugal's constitutional court on Friday rejected four out
of nine contested austerity measures from this year's budget.
The ruling deals a blow to government finances, but is unlikely
to derail the bailed-out country's reforms.
"Continued and determined implementation of the programme
... is a precondition for a decision on the lengthening of the
maturities of the financial assistance to Portugal, which would
facilitate Portugal's return to the financial markets and the
attainment of the programme's objectives," it said.
Portugal, like Ireland, is seeking an extension of the
maturities of the emergency loans it is getting from the
European Union beyond 2022 to smooth out its financing needs.
EU finance ministers are to decide the details of the
extension next Friday.
The fiscal measures rejected by the court should deprive the
state of some 900 million euros ($1.17 billion) in net revenues
and savings, according to preliminary estimates by economists.
The package of austerity measures introduced by the 2013
budget is worth about 5 billion euros and includes the largest
tax hikes in living memory, which were mostly upheld.
"The European Commission welcomes that, following the
decision of the Portuguese Constitutional Court on the 2013
state budget, the Portuguese Government has confirmed its
commitment to the adjustment programme, including its fiscal
targets and timeline," the Commission said.
The European Union executive arm said that any departure
from the programme's objectives, or their renegotiation, would
neutralise the growing investor confidence in Portugal and
prolong the difficulties from the adjustment.