Bailed-out Portugal scrambles to find new spending cuts after court disallows pension changes

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Portugal's prime minister says his government is looking for new savings to meet its budget targets next year after a court disallowed planned cuts in state pensions.

The Constitutional Court rejected late Thursday a government plan to cut state pensions above 600 euros ($820) a month by 10 percent next year, saying it violated the principle of trust in the authorities. The measure aimed to save 388 million euros. It was the fourth time this year the court has blocked austerity measures to reduce government spending.

Portugal got a 78 billion euro bailout in 2011 and in return agreed to slash spending.

Prime Minister Pedro Passos Coelho said Friday his government is examining alternatives and didn't rule out new taxes. However, he acknowledged that would hurt Portugal's fragile economic growth.