“On my initiative, the Constitutional Court will be called on to decide on the conformity of the 2013 state budget with the constitution of the republic,” the President said. He added that the budget didn't treat citizens fairly, hitting some worse than others.
In his speech Cavaco Silva, who has served as Prime Minister twice and is the first elected centre-right President of Portugal since the 1974 Carnation Revolution, also said the country was in a vicious circle of austerity and recession. He added that Portugal's foreign debt, now twice as high as the country's annual output, is unsustainable.
Cavaco Silva signed the 2013 budget into law earlier on 31 December, which includes the biggest tax hikes in living memory, according to Reuters. The move means the budget will take effect from 1 January, pending the decision of the Court.
The centre-right government of Prime Minister Pedro Passos Coelho has argued that the unprecedented tax increases contained in the budget are necessary to meet the terms of the country's eurozone bailout.
According to the BBC, for most Portuguese workers the tax rises that came into effect on 1 January are equivalent to more than a month's wages. There has already been a general strike and street protests have become a familiar feature, Euronews reports. Unemployment is nudging 16%.
The Socialists' opposition had already questioned the validity of the tax hikes and had threatened to take them to the Constitutional Court if the president did not.
Last year the court ruled against a pay cut for civil servants which forced the government to seek alternative sources of revenue.
