Cavaco Silva has sent to the Constitutional Court the proposed government statute that aims to reduce pensions of over €600 a month.
The initial proposal from the Government aimed at savings of €728 million as laid out in the State Budget for 2014.
In a statement published on the Presidency website Cavaco has asked the court to rule on the constitutionality of the proposals and ‘verify the compliance of these standards to Portugal’s Basic Law, particularly the principles of unity of the tax on income, the ability to pay, progressiveness and universality, and the principle of proportionality.’
The cuts in pensions will vary progressively between 9.87% to pensions obtained before December 2005, and 7.87% for pensions thereafter.
The new austerity package scheduled for 2014 is estimated to yield €3,901 million in savings and aims to reduce the deficit to 5.5% of GDP in 2013 and to 4% in 2014.
Cavaco Silva's referral will not go down well with ratings agencies which are keen to see the latest 2014 budget proposals go through uninterrupted by aspects such as legality.
