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The impact of the economic and financial crisis, which led to a deterioration of public finances, in particular since 2009, triggered excess deficit procedures opened by the European Union ("EU") for a large number of Member States, including Portugal.

The last few months have been harsh for the Portuguese economy. The inability of the Portuguese Government in controlling the growth in public spending together with the failure in keeping the budget deficit within the EU convergence limits led to the bail-out by the International Monetary Fund ("IMF") and the EU in order to correct the excessive public deficit and to reduce public debt.

As a result, the Portuguese Government has agreed to take steps to bring deficit below the 3% limit by 2013 in line with the EU recommendations, including among others a more aggressive privatisation programme involving seventeen companies, nine of which are presently fully owned by the State.

The Government estimates that the revenues of the Portuguese privatisation programme will reach, in aggregate, approximately €6,000 million.