Portugal's Constitutional Court has ruled that some of the unpopular pay cuts in this year's state budget are unlawful, denying the government about 1.4 billion euros ($1.8 billion) of predicted revenue.
The court's decision Friday delivers a setback to the austerity strategy agreed between the government and foreign creditors who lent Portugal 78 billion euros ($101.5 billion) in a bailout two years ago.
The 13 judges said in a statement that budget measures cutting holiday pay for government workers and pensioners and others reducing unemployment and sickness benefit were unconstitutional.
Among the reasons for the decision were that the measures neglected guarantees of equality. Private sector workers are not subject to the measures.
The government made no immediate comment but has, unusually, scheduled a Cabinet meeting for Saturday.