Reform on hold

Inga Neves has recently opened a small restaurant in Lisbon's trendy Bairro Alto district. It offers something unusual: Portuguese food served in large ice-cream cones. Neves believes this is the ideal snack for journalists on the go - and with a smile she points to the constitutional court, located just a few meters down the street. "I will soon distribute some of my flyers there," she says.

Over the last few months, the Portuguese have been anxiously following the decisions of the country's top judges. Already three times the court has assessed the economic austerity measures proposed by the country's conservative government - and three times it has rejected them as unconstitutional. Last week, the court decided against a bill that would have been the core measure in the planned reforms.

Criticism from different sides

The bill was aimed at public-sector employees whose jobs were to be cut. Rather than laying them off immediately, the plan was to put them on a waiting list and let them go after one year if no alternative employment is found for them. The judges rationalized their decision by pointing out that the state renewed its job-security guarantee to civil servants just five years ago.

Prime Minister Pedro Passos Coelho, who in the previous months has openly criticized the judges, has now accused the constitutional court of jeopardizing the implementation of the reforms. According to him, the court is protecting the rights of the workers but putting the welfare of future generations at stake.

The court's verdict has also been criticized by various experts. Luis Coutinho from the law department of the University of Lisbon makes a point about the difficult situation the country faces. "European institutions are not so much concerned with specific deficit goals but rather want Portugal to achieve long-term economic balance," Coutinho told DW. "The constitutional court's ruling is now challenging this goal."

Genuine legal hurdles?

However, Portugal's constitution does indeed set certain boundaries, as it contains clauses that protect workers' rights. "Out of 78 constitutions examined around the world, the Portuguese constitution guarantees the most socio-economic rights," explained sociologist Filipe Carreira da Silva. He believes this to be the result of the left-wing-inspired Carnation Revolution in the mid-1970s, which gave rise to the modern, democratic Portuguese state.

Nevertheless, Coutinho points out that the interpretation of the constitution is always dependent on current circumstances. "Of course we want the constitution to always be valid, but there are times when this absolute guarantee of everything that's written there cannot be granted," he said. "That is the difference between reality and the ideal."

Coutinho is of the opinion that the judges have a large enough playing field to ensure the country's modernization without challenging the basic constitutional protection of workers. According to him, the court currently lacks "healthy common sense."

No parliamentary agreement

Prime Minister Passos Coelho has not yet revealed how he plans to deal with the job cuts in the public sector. With a change to the constitution, the government would have the necessary legal foundation to carry out its planned reforms. But the center-right coalition lacks the necessary majority in parliament. The moderate Socialist Party, with which a two-thirds majority would be possible, has already rejected any proposed changes to the constitution.

The blow to Passos Coelho comes at an inconvenient time. The Portuguese are due to vote in local elections on September 29. It was the government's intention to enter the race with a positive message: that the Portuguese economy experienced slight growth in the second quarter of 2013 - for the first time after three years of recession. But this fact has been totally overshadowed by the current debate about proposed state reforms. According to the constitutional court's ruling, the government should now present a new plan to foreign investors for how to cut 30,000 public-sector jobs.