LISBON, Portugal – Portugal’s government says it is forgoing the final 2.6 billion-euro ($3.5 billion) instalment of its three-year bailout package because it cannot meet creditors’ deadlines for the latest promised austerity measures, which have run into legal challenges.
Portugal received a 78 billion-euro rescue in 2011 amid Europe’s debt crisis. The money has been delivered in batches as long as Portugal keeps cutting expenditure in accordance with a pre-determined calendar.
The constitutional Court last month disallowed further planned cuts to government workers’ pay and state pensions. That has left the government scrambling to find alternative savings, but Finance Minister Maria Luis Albuquerque said Thursday the government does not know when they will be ready.
Portugal says it has enough money to see it through the middle of next year.