by Calculated Risk on 4/08/2013 09:30:00 AM

From the NY Times: New Trouble for Euro in Portugal

In an address to his beleaguered nation on Sunday, Prime Minister Pedro Passos Coelho warned that his government would be forced to cut spending more and that lives “will become more difficult” after a court on Friday struck down some of the austerity measures put in place after a bailout package two years ago.
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A critical moment for the latest trouble took place on Friday, when Portugal’s Constitutional Court struck down four of nine contested austerity measures that the government introduced as part of a 2013 budget that included about 5 billion euros, or $6.5 billion, of tax increases and spending cuts. The ruling left the government short about 1.4 billion euros of expected revenue, or more than one-fifth of the 2013 austerity package.

Europe will remain a downside risk to the US and global economy for some time.

And updates from the Telegraph: Eurozone debt crisis: Portugal bail-out under threat - live

The eurozone has been plunged into fresh turmoil as the Portuguese constitutional court blocked four out of nine austerity measures aimed at meeting bail-out conditions.