Portugal Modern History

By | January 30, 2023

Portugal is a country located in Southern Europe. With the capital city of Lisbon, Portugal has a population of 10,196,720 based on a recent census from COUNTRYAAH. 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 member.

  • ABBREVIATIONFINDER: 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 industrial development. Check best-medical-schools for more information about Portugal.

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 in 1975.

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 constitution.

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 member.

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 welfare system.

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 crime.

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 candidate.

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 transport sector.

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 economy.

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 unemployment.

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 reforms.

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 society.

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 from outside.

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.

Portugal Modern History