Prime Minister Pedro Passos Coelho of Portugal says other deep spending cuts will have to be made by the government as a court ruling a court ruling that struck down parts of the government's budget.
Mr Passos Coelho said social security, health, education and public enterprises would have to be cut to avoid a second eurozone bailout.
In a statement to the nation on Sunday evening, the prime minister repeatedly used the phrase "national emergency" to describe Portugal's situation.
The BBC reports the Constitutional Court has struck down more than 1 billion euros of savings that the government had said were needed to meet the terms of its existing bailout.
An extraordinary cabinet meeting was held on Saturday, after which the prime minister briefed President Anibal Cavaco Silva.
Mr Passos Coelho said the ruling meant the government must find alternative savings or seek a second bailout.
The government would, he said, do everything in its power to avoid having to ask for more aid.
Since tax increases were out of the question after the unprecedented increases already in the budget, he said, the only option was to cut other public services.