Portuguese government started sales real estate to cut budget deficit

The Portuguese government started selling real estate last week, as part of its effort to raise cash to reduce its budget deficit.

The finance ministry sold a Lisbon office building for EUR 1.52 million and a former tax office in southern Portinho de Arrabida for EUR 1.01 million, the ministry said in a statement.

Both sales were well above the base prices for the auctions, with the Arrabida tax office going for almost three times the base EUR 350,000 price, the ministry said.

The ministry also said it has signed a contract with state-owned bank Caixa Geral de Depositos to use its 'Imoportal' real-estate website to evaluation prices for assets and to market its auctions. More real estate sales are planned by the end of the year, the ministry has said.

PortugalÂ's deficit rose to 4.1% of gross domestic product in 2001, breaking the European Union (news - web sites) ceiling and starting a disciplinary procedure that could result in a fine.

The finance ministry aims to reduce the deficit to 2.8% of GDP (news - web sites), below the E.U.Â's 3% ceiling, in 2002, and is targeting a deficit of 2.4% of GDP for 2003.

(source: Dow Jones)

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