Unconstitutional Austerity in Portugal?

Anibal SilvaThe year we have just left behind has clearly demonstrated that the current European crisis politics is stretching national democratic orders to breaking point, especially in crisis countries. Unfortunately, this trend looks set to continue in 2013.

Euractiv reports that the Portuguese President Anibal Cavaco Silva (pictured) himself is sending the new Portuguese austerity budget to the Constitutional Court:

In his speech Cavaco Silva, who has served as Prime Minister twice and is the first elected centre-right President of Portugal since the 1974 Carnation Revolution, also said the country was in a vicious circle of austerity and recession. He added that Portugal’s foreign debt, now twice as high as the country’s annual output, is unsustainable.

Cavaco Silva signed the 2013 budget into law earlier on 31 December, which includes the biggest tax hikes in living memory, according to Reuters. The move means the budget will take effect from 1 January, pending the decision of the Court.

The centre-right government of Prime Minister Pedro Passos Coelho has argued that the unprecedented tax increases contained in the budget are necessary to meet the terms of the country’s eurozone bailout.

The BBC reported that the tax hikes announced are equivalent to more than a month’s wages whilst Portugal is entering its third year of recession with an unemployment rate of nearly 16%.

Portugal is a crisis country that is not as much in the public eye as Greece for instance but austerity has the same effect on the Iberian peninsula, especially with big neighbour Spain in crisis too. Will the relevant decision-makers ever notice that their strategy is not working economically and is more and more undermining democracy on all levels?