Portuguese budget heads for court ruling

Portugal's highest court is to decide whether the country's 2013 austerity budget is constitutional, President Anibal Cavaco Silva announced late on Tuesday. "By my own initiative, the constitutional court will be called on to decide on the conformity of the 2013 state budget" with the country's constitution, Cavaco Silva said during his New Year's Day address. "The execution of this budget will bring about lower income for citizens through higher taxes and lower social payments. Everyone will be affected, but some more than others, which raises doubts on the fairness of redistribution efforts," he said. The President's decision came just a few days after the president ratified the budget, which was passed by parliament in November, and hours after its implementation. Cavaco Silva said that if he had not signed the budget, Portugal would have slid further into crisis and sent a "extremely negative" message internationally. Several leftists groups have made known their intention of seizing the consitutional court on the budget law. Experts believe new taxes on pension payments and a decrease in the number of tax rate brackets could be vulnerable to a review by the court. The 2013 budget is expected to bring Portugal 5.3 billion euros in savings, 80 percent financed by tax increases that Finance Minister Vitor Gaspar called "enormous" but indispensable to pull the bailed out eurozone country out of the crisis.