Just as the big crisis story in Cyprus has started to wind down, it looks like the attention could shift to Portugal.
Today, the Portuguese Constitutional Court struck down articles 29 and 77 of the Portuguese government's 2013 budget.
Dow Jones reports:
*Portuguese Court Rules Some Measures in 2013 Budget Illegal— DJ FX Trader (@djfxtrader) April 5, 2013
*Portuguese Court: Paycheck Cuts for Public Workers, Pensioners Illegal— DJ FX Trader (@djfxtrader) April 5, 2013
The 2013 budget is heavy on austerity because Portugal has to meet the demands of the troika of European creditors (the EU, ECB, and IMF) on which the country relies for financial assistance.
And, as is the case in other peripheral euro area member states under troika aid programs, the austerity measures have been divisive.
There were even reports last week that Portuguese Prime Minister Pedro Passos Coelho acknowledged that he may have to resign depending on how much of the budget the Constitutional Court decided to strike down.
Whether that is the case here is unclear.
According to Reuters, the measures struck down account for about 20 percent of the savings found by the austerity package, and the government has called for a special meeting on Saturday.
In any event, the next few days should be interesting ones for Portugal.
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