Legal threat to Portugal cuts

PORTUGAL’S austerity budget faces a legal challenge after the country’s President yesterday referred the plans to the nation’s supreme court.

Aníbal Cavaco Silva wants to ensure cuts to pensions and public sector pay are constitutional because they do not affect all citizens.

If the legal challenge is successful the Portuguese government could be forced to redraft the legislation, potentially threatening the tough deficit-reduction targets set following its €78bn (£63bn) bailout from the EU and IMF.