LISBON, Jan. 1 (Xinhua) -- Portuguese President Anibal Cavaco Silva said Tuesday he would ask the constitutional court to review the newly-passed 2013 budget for the debt-ridden country.
Cavaco said the budget aims to meet the goal of deficit reduction as agreed with international lenders. "However, the constitutional court will be called upon to rule on the conformity of the state budget for 2013 with the Constitution."
The budget came into force on Tuesday after parliament approval and the president's signature over the weekend. Cavaco has warned that without stringent deficit reduction, Portugal could lose the most important economic policy instrument available and incur severe consequences for the country externally.
Still, the president acknowledged that austerity has showed a negative impact on boosting economic growth.
"We have to balance the books and reduce public debt, but we cannot ignore that in 2012 it became clear that a process of reducing the imbalance of public accounts accompanied by negative economic growth tends to become socially unsustainable," he said.
"Unemployment, especially among the young, has reached a worrisome level." Portugal's unemployment reached record levels in November at 16.3 percent.
"Many families were forced to reduce their day-to-day costs, ... and many small businesses have closed their doors due to falling demand for goods and services. We urgently stop this recessive spiral, in which the drop in demand leads to business closures and rising unemployment," Cavaco told the nation in a televised New Year message.
On a more positive note, Cavaco said, "2013 will be a year in which to begin to change the negative trend we see in domestic production and employment, a year when the weather improves confidence and business investment begins to grow.
"Young entrepreneurs with an innovative spirit can export what they produce and should be encouraged by governments and supported by the banking system," the president added.
In May 2011, Portugal and the "troika" of the European Commission, the European Central Bank and the International Monetary Fund reached an agreement on a 78-billion-euro bailout for the cash-strapped country.
Through drastic tax hikes and spending cuts, Portugal is struggling to reduce its deficit to 4.5 percent in 2013 to meet the bailout requirement.