LISBON (Reuters) - Portugal’s premier Pedro Passos Coelho has told his closest colleagues his government may fall if the country’s constitutional court rejects some of his austerity measures, Publico newspaper said on Thursday.
Such a collapse, or a major failure in meeting budget targets, could derail Portugal’s exit from its European Union bailout program and add another layer to the euro zone crisis, currently focused on Cyprus.
A government spokesman would not comment on the report.
The newspaper said the prime minister had told the permanent commission of his Social Democratic Party the government was unlikely to be able to find alternative measures to compensate, for an unfavorable ruling from the court.
The court, expected to rule in the next few weeks, has been analyzing this year’s budget, which includes the largest tax hikes in living memory. Various opposition parties have argued that cuts to pensions, civil servants’ salaries and welfare benefits undermine workers’ basic rights.
A ruling against the plan could compromise around 2 billion euros out of some 5 billion euros in this year’s austerity measures.
Asked about the impending decision on Wednesday, Passos Coelho declined to predict the outcome, but told reporters “the court has to take responsibility for its decisions and for the impact they may have on the country”.
Reporting By Andrei Khalip. Editing by Jeremy Gaunt