The fascist-inspired regime under the
dictator António de Oliveira Salazar and his successor
Marcello Caetano held power in Portugal from the late
1920s to 1974. It ruled with the support of landowners,
the state administration and the Catholic church. During
the 1950s and 1960s, Portugal was one of Europe's
poorest countries, leading to mass emigration. A
military coup in 1974 ended the dictatorship. The
Socialist Party won the first free elections in 1975 and
retained power for ten years, until the bourgeois Social
Democratic Party took over. Power has subsequently
switched between these two parties.
Portugal was neutral during World War II and the end
of the war in 1945 meant no political change. The
dictator Salazar retained his position. Portugal was one
of the twelve countries that formed the NATO Alliance of
Defense in 1949 and in 1955 the country became a UN
List of most commonly used acronyms containing Portugal. Also includes historical, economical and political aspects of the country.
During his first years in power, the economist
Salazar had already created order in the state finances
by means of a tough austerity policy. It gave him a
certain reputation in Europe's conservative circles,
while most Portuguese people remained poor when economic
growth was low. Agriculture was given priority over
After an opposition candidate, General Humberto
Delgado, had challenged Salazar in the 1958 presidential
election, the regime responded by abolishing direct
presidential elections. Delgado was murdered seven years
later, probably by the security police. Salazar
certainly sat as long as the elite - the big landowners,
the state administration and the Catholic church - were
favored by his regime. After a stroke in 1968, Salazar
was succeeded by Marcello Caetano, who largely continued
his representative policy.
Independence of the colonies
When liberation movements in the Portuguese colonies
revolted in the early 1960s, the regime fought them in
costly wars. Young Portuguese men were forced to do
military service for four years, including two years in
Africa. The young officers saw the wars as futile and
formed in 1973 the so-called Captain's movement, which
was supported by higher military. The idea of a coup
was born and on April 25, 1974, the Armed Forces
Movement (MFA) took power.
A military revolutionary council was appointed, but
free elections were promised after a transitional
period. The most important part of the MFA program was
decolonization, followed by democracy and development.
Politicians who lived in exile returned to Portugal.
Already at the end of 1974, the independent states of
Guinea-Bissau and Cape Verde were proclaimed.
Mozambique, Angola and São Tomé & Príncipe became free
MFA soon split into factions. After a failed coup
attempt by right-wing forces within the MFA and the
military, the radical phalanx strengthened its position.
Banks, industries, insurance companies and most
newspapers were nationalized. In southern Portugal, farm
workers occupied land and transformed most of the
agricultural land into state-owned collective.
In a short time, nearly 80 political parties were
formed, most of them socialist. In the first free
parliamentary elections in April 1975, the Socialist
Party (PS), led by Mário Soares, became the largest
party. Seven parties were commissioned to draft a new
Socialist inspired constitution
In November 1975, left-wing forces in the military
attempted a coup but were stopped by troops led by
General António Ramalho Eanes. The constitution that
came into force in 1976 was strongly influenced by the
circumstances following the dictatorship's fall.
Socialism was the goal and the military had a great
political influence. The June 1976 presidential election
was won by General Eanes, who was regarded as a
guarantor of stability (he was re-elected in 1981).
In the elections to Parliament (the National
Assembly) which had been held as early as April 1976,
the socialists had again become the largest party and
Soares formed a minority government. Until 1985, the
Socialist Party, the bourgeois Social Democratic Party (PSD)
and the Conservative Democratic Center cooperated in
electoral cooperation or coalition governments.
In 1977 the government had applied for membership in
the EC (now the EU) and in 1986 Portugal became a
During the oil crisis in the early 1970s, the need to
modernize the economy became urgent. Economic policy had
been shaped during the colonial era, when cheap energy
could be extracted from the colonies. The international
recession worsened the economic situation. In addition,
around 700,000 people who moved from the colonies would
be integrated into society. Portugal was forced to take
large loans from the International Monetary Fund (IMF),
which demanded tough financial remediation programs.
Unemployment rose and living standards dropped, creating
discontent among both conservative and radical groups.
Corruption scandals trap PSD
Portugal was ruled by PSD from 1985 to 1995 under the
leadership of economics professor Aníbal Cavaco Silva.
The PSD government invested in limiting inflation and
the budget deficit, encouraging private investment and
modernizing education, health care and the social
In the 1986 and 1991 presidential elections, the
Socialist Party candidate Mário Soares won. The
cooperation between Cavaco Silva and the president
worked smoothly until 1992, when Soares vetoed several
government proposals, including a drastic reduction in
the armed forces.
The election to the National Assembly in 1995 brought
the Socialist Party to power. Many had then become tired
of what they saw as the power of the PSD - a strong link
between state and party as well as several corruption
scandals within the party. In the election, the
Conservative People's Party (PP) also managed to win new
votes by blaming the EU for the problems of Portuguese
agriculture and the fishing industry and for increasing
The Socialist Party formed a minority government led
by António Guterres. Before the election, the party had
promised social reforms: a guaranteed minimum wage and
more money for education and care.
In the 1996 presidential election, former Socialist
leader Lisbon's then-mayor Jorge Sampaio clearly
defeated former candidate Cavaco Silva over the counter
The euro is introduced in Portugal
The government's ambition was for Portugal to meet
the entry requirements of the EU's currency union (EMU).
One of the conditions was that the state's budget
deficit should not constitute more than three percent of
the country's gross domestic product (GDP). Since the
government tightened its budget, in spring 1998 Portugal
became one of eleven countries EMU member. Subsequently,
a guaranteed minimum wage was introduced.
In March 1999, six months before the parliamentary
elections, PSD had problems. Party leader Marcelo Rebelo
da Sousa had initiated an alliance with PP, but the
collaboration broke down and da Sousa had to resign. The
new PSD leader, José Manuel Durão Barroso, had to fight
against low opinion figures, at the same time as the
Socialist Party had a headwind due to the good economy.
Although the Socialist Party won the election in
October 1999, it failed to reach its own majority in the
National Assembly. The PSD went back while the Communist
Party in alliance with the Greens went forward. In
addition, the new party alliance, the Left Bloc, took
its place in the National Assembly (see Political
system). PP retained its mandate.
Socialist Party leader António Guterres formed a new
government with the support of half the members of
Parliament. A divided opposition meant that the
government usually got through its proposals.
In the January 2001 presidential election, President
Sampaio won big over the main rival, the conservative
Joaquim Ferreira do Amaral. In the local elections in
December of that year, however, the socialists suffered
a stinging defeat and lost power in several major
cities, including Lisbon and Porto. The loss was so
great that Prime Minister Guterres decided to resign.
Difficult financial problems
New elections for the National Assembly were held in
March 2002. The PSD had a headwind, but failed to get
its own majority in Parliament. The Socialist Party went
backwards, as did the alliance between Communists and
environmentalists and the Left Bloc. The conservative PP
remained at the same level as before. After the
election, PSD and PP formed government. PSD leader José
Manuel Durão Barroso was appointed new prime minister.
Immediately after the 2002 election, a number of
measures were taken to rectify the country's poor
finances. The year before, the budget deficit had
exceeded the maximum limit of EMU cooperation of three
percent of GDP.
The new, tough austerity policy entailed, among other
things, increased VAT, the sale of state property,
employment and salary halt, sharp cuts in the public
sector and an overhaul of defense costs. The measures
faced sharp criticism from trade unions and the
political opposition. From the autumn of 2002, several
large strikes occurred among public employees, including
in the health care, the school, the courts and the
In 2002 and 2003, Portugal passed the EMU's budgetary
requirements and Portugal was able to introduce the euro
as its currency in 2002. But the cuts had its price in
the form of worse public figures. In 2004, the
government promised to place greater emphasis on social
welfare and labor market issues. Those affected most
severely by public austerity were promised better care,
pensions and educational opportunities. In the same
year, restrictions were imposed on the number of
immigrants to the country following pressure from the
PP, despite the fact that Portugal was in need of
immigrant labor in certain sectors of society, including
the construction industry.
The president is forcing new elections
In the summer of 2004, Durão Barroso was appointed
new President of the European Commission, a post he took
office in October of that year. The Prime Minister's
post was taken over in July by Pedro Santana Lopes, who
was then Lisbon's mayor. Lopes was generally considered
more populist and right-wing than his predecessor.
The Santana Lope government has been severely
criticized because of budget problems and lack of
coordination between the ministers. The Prime Minister's
decision to ease the austerity policy also caused
discontent within his own party.
In November 2004, President Sampaio dissolved the
parliament and announced new elections. Sampaio had
previously warned that he would intervene if the new
government did not maintain strict control over the
The Socialist Party won the new election in February
2005 by a wide margin and gained its own majority in
Parliament, while the PSD lost big and the PP back
slightly. The turn of the voters to the left was
primarily seen as a dissatisfaction with the PSD
government, not least because of the rapidly growing
The social government's period in power (2005–2011)
was dominated by serious economic problems. Immediately
after taking office, Prime Minister José Sócrates and
the government had to try to deal with a difficult
financial crisis. A number of savings were implemented
to keep the state budget in balance. Among other things,
the government decided to dismiss 75,000 of the
country's 700,000 government employees until 2009. The
retirement age for public employees was raised and the
sickness benefit was reduced. The austerity led to
protests from workers and trade unions.
Tightening leads to protests
When the presidential elections were held in January
2006, the PSD candidate, the former Prime Minister
Aníbal Cavaco Silva, won. He thus became the first
right-wing politician to win a presidential election in
Portugal in modern times. In his election campaign,
Cavaco Silva benefited from the dissatisfaction with the
austerity policy of the Socialist government.
The cooperation between President Cavaco Silva and
Prime Minister Sócrates proved to work well. A spirit of
consensus characterized politics, where the government
sought solutions together with the opposition.
In 2007, the PSD was weakened by a corruption scandal
and the following year, party leader Luís Filipe Menezes
was forced to resign. This contributed to the government
being able to remain after the parliamentary elections
in September 2009. However, the socialists lost their
majority and had to form a minority government, which
must therefore seek support from the opposition in
Parliament in order to carry out the necessary economic
After the electoral victory, the government's highest
priority was to reduce the state's budget deficit of
almost ten percent of GDP to the EMU's maximum limit of
three percent. In 2010, the government received support
in Parliament for, among other things, increased
taxation for high-income earners and share profits and
for frozen or lowered salaries for public employees. The
public again showed their dissatisfaction with the
savings through government-critical demonstrations and
general strikes that temporarily paralyzed parts of
In early 2011, Cavaco Silva was re-elected for a
second and final five-year term as president.
Social government resigns
In March 2011, after the National Assembly voted no
to another savings package, including the new tax
increases and more expensive public transport, the
Socialist government resigned. The savings package was
considered to be an attempt by the government to ensure
that Portugal did not follow the same path as Greece and
Ireland, that is, to receive international aid to cope
with the urgent economic problems (see Finance).
However, all opposition parties voted against the
savings package, which they felt went too far.
Prime Minister Sócrates said after the vote that the
government had been deprived of its ability to govern
the country and he subsequently submitted his
resignation to the president. Sócrates was then given
the assignment to lead a transitional government until a
new election to be held in June.
Sócrates warned that the economic situation had
deteriorated markedly by Parliament's refusal to tighten
it. Interest rates on government loans had risen rapidly
and as early as April 2011, the government was forced to
ask the EU for financial support to avoid state
bankruptcy. Portugal thus became the third country after
Greece and Ireland to be forced to seek emergency loans
Following negotiations with the EU and the IMF, in
May a support package for Portugal of € 78 billion was
presented in loans over a three-year period. The terms
of the loan were for the country to implement a series
of economic reforms, including privatizations and
measures to increase the competitiveness of the private
sector. The goal was to reduce the government's budget
deficit, which in 2010 exceeded nine percent of GDP, to
below the euro zone ceiling of three percent by 2013.
Civil rule after new elections
In the new election in June 2011, the PSD won by a
wide margin and party leader Pedro Passos Coelho was
appointed prime minister for a government made up of PSD
and CDS-PP ministers (see Political system). After the
election loss, Sócrates also left the post of leader of
the Socialist Party.
The country's new Prime Minister Coelho and his
bourgeois government warned shortly after the election
of new budgetary tightening. A couple of months later,
the government announced the biggest savings in the
country in half a century (see Finance).
In November, the major unions carried out a general
strike during a day in protest of the government's tough
budget for 2012. Several protest demonstrations and
strikes were also held in 2012 as the terms of EU and
IMF support loans became increasingly familiar to
citizens. Rising unemployment and living costs risked
increased social unrest. However, the resistance to
austerity was manifested mainly in a peaceful manner.
The opposition held a relatively low profile, as the
socialists agreed with the government that the austerity
policy was necessary.
In 2013, the government encountered problems with its
economic policy, when a court in April ruled that
several of the planned austerity violated the
constitution. This included reductions in government
employees' salaries and pensions. Prime Minister Passos
Coelho then explained that cuts in social, health care,
education and state-owned enterprises would instead have
to be met in order for Portugal to meet EU and IMF loan
conditions. The austerity that had been rejected would
have meant around a billion euros in savings.
Corruption scandals within the Socialist Party
The new, even tougher austerity constraints imposed
by the Constitutional Court's decision were to crack
down on the government, but the smaller coalition party
CDS-PP remained firm since its leaders were given
overall responsibility for the country's economic
policies and relations with the lenders.
The president, who really wanted a new election,
called on the government and opposition to conclude a
broad economic policy settlement. However, the
negotiations failed, and the Socialist Party refused to
become part of the government's austerity policy. It
produced results in the local elections in September,
when the socialists had great success, especially in
Lisbon, while the PSD suffered huge losses.
In the spring of 2014, it was clear that Portugal
would be able to move forward without new major
emergency loans from the EU and the IMF, which, however,
did not mean that the financial problems were over.
At the end of the year, several major corruption
scandals broke out. One of them was linked to visa
management, where people who invest a certain amount in
Portugal are allowed to settle in the country for five
years (see Population and language). An even greater
uproar arose when the former prime minister, Socialist
José Sócrates, was arrested in November in connection
with a corruption investigation. When another socialist
former minister was arrested accused of corruption and
money laundering, Prime Minister Passos Coelho took the
opportunity to ask the president to announce
parliamentary elections until October 4, 2015.