The pattern of seizing workers’ retirements by slashing pension benefits or raiding the funds in order to reduce budget deficits has been seen across Europe and in the U.S.
In states like Illinois and large cities like Detroit in the U.S., as well as in countries like Greece, Spain, Portugal, the U.K., and elsewhere, pension agreements have been treated as dispensible contracts in the wake of the financial crisis that took hold in 2008. Even as wealthy individuals and corporations remain insulated from higher taxes, governments have increasingly looked at gutting public worker pensions as a way to pay off debt or reduce annual deficits.
But in Portugal on Thursday, where the government has imposed draconian austerity policies in order to please the “Troika”—the European Union, International Monetary Fund and European Central Bank—a court ruled that a new government ploy to cut pension payments to retired workers would be “illegal” as it would threaten the “principle of trust” on which such agreements are based.
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Fred Klonsky 