Foreign policy and defense
Portugal is a nation in Southern Europe. Its capital city is Lisbon. Portugal’s two dominant political parties largely agree on foreign policy issues. Portugal has been a member of the EU since 1986, and the Portuguese have long been warm supporters of deepening cooperation within the Union. For example, the country has been participating in euro co-operation since its inception in 1999. So too has the EU contribution to the Portuguese economy been significant and in 2011 the EU helped the Portuguese government with a major emergency loan for Portugal to avoid state bankruptcy as a result of the 2008 economic crisis.
At the same time, however, the crisis and its consequences have led to confidence in the EU. The 2016 threat of EU sanctions against Portugal for the failure to reduce the budget deficit to an agreed 3 percent of GDP has diluted the negative sentiment against the Union. “Brexit”, when the British in June 2016 in a referendum chose to leave the EU, had one of the government’s support parties, the Left Bloc, demanded a referendum in Portugal too but this was rejected by the president.
- Countryaah: Overview of business holidays and various national observances in Portugal for years of 2020, 2021, 2022, 2023, 2024 and 2025.
Portugal, as a small and relatively poor country, has no great influence within the Union, but in the spring of 2004 the then Prime Minister José Manuel Durão Barroso was appointed President of the European Commission. When Portugal chaired the EU Council of Ministers during the second half of 2007, the Lisbon Treaty was adopted to make it easier to make decisions within the Union.
Good relations with the outside world
Relations with the European countries are rather problematic. However, the Portuguese government’s strong support for the US-led invasion of Iraq in March 2003 clouded relations with Germany and France who opposed the war. In 2005, Portugal brought home its soldiers from Iraq.
The relationship with Spain has traditionally been characterized by Portuguese fear of being swallowed up by the larger neighboring country. Nowadays, however, the Portuguese no longer regard Spain as a military threat. An earlier concern over competition from the stronger Spanish economy has diminished as economic cooperation between the countries has increased. Portuguese-Spanish summits are held each year and so do the Ibero-American summits in which both Portugal and Spain participate.
Portugal also has strong ties to its former colonies Brazil, Angola, Mozambique, Cape Verde, Guinea-Bissau, São Tomé and Príncipe, and East Timor.
In 1996, the Commonwealth of the Portuguese-speaking countries (Comunidade dos Países de Língua Portuguesa, CPLP) was formed to promote cooperation between the countries on both linguistic and cultural as well as political and economic issues.
However, relations with Angola were tense for several years since it was revealed that the Portuguese authorities had launched investigations into the affairs of high-ranking Angolans. This was particularly the case against the former Angolan Vice President Manuel Vicente (see Calendar). Tensions then subsided after a Portuguese court ruled that the legal process against him could be settled in Luanda. One sign that contacts were improving was when Prime Minister António Costa traveled to Angola in September 2018 and Angolan President João Lourenço visited Portugal later that year. Angola is one of Portugal’s foremost trading partners and is now a major investor in the former colonial power.
Several mediation assignments
The fate of East Timor has been on Portugal’s political agenda since Indonesia’s invasion of the Portuguese territory in 1975. Shortly before the invasion, Portugal withdrew from East Timor without ending its independence negotiations. Subsequently, Portugal became involved in East Timorese freedom and the country played an important role in the process that led to East Timor becoming independent in 2002. In spring 2006, Portugal sent a group of military policemen to the island to help restore order after violent riots in the capital Dili.
Portugal also mediated in the civil wars of the former colonies of Mozambique and Angola.
In accordance with a 1987 agreement, Portugal in 1999 handed over the management of the former Macao colony in the vicinity of Hong Kong to China.
The military’s power was great until the revolution in 1974, but then diminished radically. Defense forces were also discontinued in line with colonial rule. Nowadays Portugal relies militarily on NATO, which the country has been a member of since the Defense Alliance was founded in 1949.
On the island of Terceira in the Azores there is the American air and naval base Lajes. Portugal receives financial and military support from the United States as compensation for allowing the Americans to use the base. There is also a smaller NATO airbase on the island of Porto Santo adjacent to Madeira and a command center outside Lisbon.
The general military duty was abolished in 2004. Portugal now has a professional army. Portuguese soldiers have participated in many international peacekeeping operations, including Angola, Bosnia, East Timor and Afghanistan. Portugal also participates in the rapid response forces set up by the EU to send to various crisis centers in the world.
FACTS – DEFENSE
Army: 16,500 men (2017)
The air Force: 6,000 men (2017)
The fleet: 8,000 men (2017)
Military expenditure’s share of GDP: 1.7 percent (2017)
Military spending’s share of the state budget: 3.9 percent (2017)
Angola offers financial assistance
Angolan President of the Angola José Eduardo dos Santos offers financial assistance to the country’s former colonial power Portugal, mainly in the form of investments.
Hundreds of thousands of Portuguese go on strike
The government’s attempt to get a tight budget for 2012 leads to the largest unions going into a nationwide one-day strike, which strikes against, among other things, healthcare, school, public transport and aviation. Hundreds of thousands of people are reported to be taking part in the strike.
Portugal gets praise from its lenders
The EU, the ECB and the IMF give Portugal approval in the first quarterly evaluation of how the country has handled the loan terms. Thus, an additional € 11.5 billion will be disbursed in September.
Socrates resigns as party leader
The Socialist Party’s great election loss causes the party leader Sócrates to step down. New government leader becomes PSD leader Pedro Passos Coelho, who appoints a coalition government between PSD and CDS-PP. Together, the two government parties have a majority in the National Assembly.
The new election leads to a change of power
PSD will be the largest party in the recent election to the National Assembly with 39 percent of the vote. This represents an increase of 27 seats to 108 of the 230 seats. The Socialist Party gains 28 percent and loses 23 seats. The Socialists thus receive 74 seats. CDS-PP receives 12 percent, or 24 seats, while CDU receives 16 seats and Left Block 8. Election is 58 percent.
Portugal is offered emergency loans – under tough conditions
The EU, the European Central Bank (ECB) and the International Monetary Fund (IMF) are offering Portugal emergency loans of EUR 78 billion to be paid out over a three-year period. The loan terms are new tax increases, budget cuts and privatizations. Public employees’ salaries and pensions should be frozen, unemployment benefits reduced, pensions should be taxed and VAT increased. The goal is to reduce the budget deficit from the 2010 level of more than 9 percent of GDP to the euro zone’s requirement of no more than 3 percent by 2013. An initial loan disbursement of just over € 6 billion is already being made the same month to calm the world’s worries about Portugal’s difficult financial situation.
The government is asking the EU for emergency loans
Sócrates warns that the economic situation is now deteriorating rapidly as a result of the National Assembly saying no to the latest savings package. In order to save the state finances, the government is forced to ask the EU for emergency loans.
Socrates resigns and new elections are announced
On March 23, Prime Minister Sócrates resigns after the opposition in the National Assembly rejected the government’s new savings package. President Cavaco Silva dissolves the National Assembly and announces new elections until June 5. Sócrates is assigned to lead a transitional government until the new election.
Demonstrations in the major cities
In Lisbon, around 200,000 people are demonstrating demands for measures against unemployment and deteriorating economic conditions. Protests are also held in dozens of other cities.
Low turnout when the president is re-elected
President Cavaco Silva is re-elected for a second and final term of five years. He already wins in the first round with 53 percent of the vote against 20 percent for Socialist candidate Manuel Alegre. The turnout is only 46.5 percent.