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Constitucional Court Rejects Austerity Measures

Constitutional court rejected austerity measures included in Lisbon's 2014 budget as part of the centre-right government's ongoing cutbacks after exiting an international bailout two weeks ago.
The country's highest court rejected three out of four measures, which have been opposed by the leftist opposition party, including wage cuts for public employees.
The judges also rejected a five per cent levy on unemployment benefits and a six percent levy on health payouts, along with controversial cuts to widows' pensions.
The court did, however, approve a measure to reduce supplementary pensions payouts in the public enterprise sector.

The secretary general of the main opposition Socialist party, welcomed the ruling and said called for the intervention of President.

The decision comes two weeks after Portugal exited a three-year international bailout programme. But the economy remains fragile, contracting a 0.7 per cent in the first quarter, sending alarm bells ringing. While public deficit has been halved to 4.9 per cent since the bailout began, Portugal's overall debt continues to balloon, reaching 129 per cent of output. Prime Minister whose government recently survived a no confidence motion presented by the Communist Party, said earlier Friday that he "cannot commit to not raising taxes to the extent that I do not know if this is necessary." Portuguese media predicted the government may increase sales tax (VAT) from 23 to 25 per cent to compensate for the shortfall created by the court's decision.



Business formation with new businesses having been started in Portugal went up in 2017. Over 3,687 new companies were registered in Lisbon (14.5% more than in 2016), while Porto registered 7,107 new firms (5% up on the previous year).

On the other hand, business failures in Portugal fell 12.7% in 2017 compared with 2016 to 6,284, while the number of new companies being set up rose 9.1%, to 40,465. Lisbon and Porto saw the highest number of bankruptcies – 1,683 and 1,330 respectively, but these were still 2.4% and 15.4% lower than in 2016.


There is three standard security taken over real estate: voluntary mortgage, retention of title and seizure.

Concerning mortgage, it should be formalised through public deed or by a certified private document. To produce its legal effects, a mortgage must be registered at the land registry office.

As for the retention of title, it should be incorporated using a duly authenticated contract or public deed and is also subject to registration at the land registry office so it can be used against any third parties.

Finally, a seizure is done through a lawsuit and is not subject to specific conditions.

The mortgage is by far the most widely used security.


To evaluate the chances to successfully collect a debt in Portugal, one should ask the following main six questions:

1 - Is the debt business or consumer related?
Business-related debts often have more chances to receive an immediate positive response than consumer debts. So if the debtor is a company, there are more chances of collecting the debt, unless de company is insolvent or out of business.

2 - How old is the debt?
The age of the debt is critical. Despite the fact that in Portugal the period of limitation is 20 years, the older overdue invoices are, the more difficult it becomes to collect.

3 - Are there documentation to support the debt? 
To make a strong case towards the debtor, and to start legal actions to enforce payment of overdue invoices or a contractually agreed payment, it is mandatory on file the documentation that supports the claim. Supporting documentation regarding the debt may consist of contracts, invoices, order forms, order confirmations, debt acknowledgement, …


In an open economy model, it is more important than ever to know what the legal risks are and how to minimise and overcome them. The better you know, the better you perform. In this article, we will summarise a clear and updated understanding of law and practice regarding guarantees.

Guarantees and securities
As a general rule, the debtor is liable in respect of his obligations. This rule affects all the debtor's assets, including future ones. The breach of an obligation, such as a payment, means that the debtor is liable to pay compensation.

Personal guarantees
By the contract, the parties may request additional guarantees besides existing assets to ensure the fulfilment of the obligation. One of these guarantees is "fian├ža." By entering into this kind of guarantee, a guarantor undertakes to pay on behalf of a third party in the event of this party not complying with the obligation of paying. The obligation depends on a principal debt and cannot exist without a valid prin…


Lisbon passed New York in the quality of living. A study made recently by Mercer consultancy puts eight European cities among the ten cities with the best quality of life.

Lisbon occupies the 43rd place in a ranking with 231 cities. European cities continue to lead the list of cities with better quality of life. According to Mercer's study released on Tuesday, there are eight Europeans among the ten cities with the best quality of life. Lisbon is a place below last year, currently occupying the 43rd place in a ranking that considered 231 cities.