New Hurdle for Resolving Euro Crisis: Constitutions - WSJ.com - 0 views
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In the latest example, Portugal's Constitutional Court on Thursday shot down the government's attempts to improve the country's competitiveness by making it easier for companies to shed workers—as demanded under the terms of the country's international bailout. The court ruled against the measures because, it said, they went against the principle of firing workers only when there was just cause.
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Courts have been able to thwart some attempts to shrink the state bureaucracy or make the labor force more flexible.
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Portugal's 1976 constitution calls for "opening the path to a socialist society." It obliges the state to promote employment, move toward free health and education services and even develop "centers of rest and holiday" for workers.
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So perhaps it comes as little surprise that, in the last five months, the country's Constitutional Court has struck down four government measures, including a tax on unemployment benefits and temporary trims in wages and pensions that the judges said were unfairly targeted at civil servants.
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Last month the court ruled against a plan to steer redundant public employees into a retraining program and lay off those who aren't placed in new jobs after 12 months
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"To fulfill what the [judges] want, we need to leave the euro," said Medina Carreira, an economist and former Portuguese finance minister.
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Under the terms of its 2011 bailout, the government has until the end of this year to move 25,000 civil servants into a labor reserve—at reduced pay—that many view as a prelude to layoffs.
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"In several cases, local political norms seem incompatible with euro-area membership in the long term," said J.P. Morgan Chase economist Alex White.
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Unlike the U.S. Constitution, which has seven articles and 27 amendments, Europe's national charters tend to be lengthy and prescriptive, limiting the space for judicial interpretation. Portugal's has 296 articles, Italy's has 139 and Greece's has 120.
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"The constitution can't set a series of obligations for a state that simply has no money to fulfill them,"