Foreign policy and defense
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
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
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
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
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
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
16,500 men (2017)
The air Force
6,000 men (2017)
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
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
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
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
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.