Portugal’s government has been given the green light by the European Commission to introduce a recapitalisation programme to help its banking system, something that could increase mortgage lending in the country.

It gained permission to inject up to €4 billion (£3.52 billion) to protect the banks against capital losses, something that may help to improve liquidity in the system and enable the institutions to lend more to businesses and those looking to purchase Portugal property.

Similar arrangements have been put in place by other governments, including the UK.

Those buying Portugal property may wish to consider the city of Guimaraes, which is located in the north of the country.

It will be the centre of attention in the next three years as it is due to share the title of European Capital of Culture in 2012.

Such a status may help raise prices in the city by attracting more purchasers and prompting tourists to consider its appeal.

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