A recent decision made by the Portuguese congress will bring about new budget cuts totaling 1.3 billion euros. Healthcare, education and the retirement systems will be affected. The EU cautioned yesterday that the cuts are necessary if Portugal wants to meet its budget goal and avoid becoming the next Greece.
The dilemma faced by Spain's neighboring country: it has lost sovereignty by belonging to the euro group, which is something that the founders of the euro zone overlooked years ago.
This is one more flaw in how the euro was designed and one more sign that it needs some changes. But it doesn't look like Portugal will get similar treatment as Spain and, instead, it looks like the euro zone should speed up its integration because the courts are limited in what laws they can change and if this is not settled, then more situations like Portugal's can arise.
