Portugal: Portugal in the Late Twentieth Century

In 1968, Salazar suffered a stroke and was replaced by Marcello Caetano as prime minister. Under Caetano repression was eased somewhat and limited economic development programs were started in Portugal and in the overseas territories. The continuing armed conflicts with guerrillas in the African territories, requiring about 40% of Portugal's annual budget to be devoted to military spending, drained the country's resources. By early 1974 dissatisfaction with the seemingly endless wars in Africa, together with political suppression and economic difficulties, resulted in growing unrest within Portugal.

On Apr. 25 an organized group of officers toppled the government in the Captains' Revolution, encountering a minimum of resistance from loyal forces and enthusiastic acceptance from the people. The officers who initiated the revolution constituted the Armed Forces Movement (MFA). Gen. António de Spínola, who did not play an active role in the coup but had publicly criticized the Caetano government, was appointed head of the ruling military junta. The secret police force was abolished; all political prisoners were released; full civil liberties, including freedom of the press and of all political parties, were restored; and overtures were made to the guerrilla groups in the African territories for a peaceful settlement of the conflicts. In September, Spínola was forced to resign and the government became dominated by leftists.

In 1975, Angola, Mozambique, São Tomé and Principe, and Cape Verde were granted independence. East Timor was forcibly taken over by Indonesia and did not achieve independence until 2002. January to November of 1975 was the period of greatest leftist ascendancy domestically—most banks and industries were nationalized, a massive agrarian reform was begun in the Alentejo, and the MFA-dominated government tried to ignore the elections of Apr., 1975, which strongly favored moderate parties, and instead relied on Communist support. Leftist predominance vanished after a failed coup attempt by radical military units in November, but many features of the revolutionary period of 1974–75 were incorporated into the constitution of 1976.

From 1977 to 1980 several moderate, Socialist-dominated governments tried unsuccessfully to stabilize the country politically and economically. In 1980–82, a center-right coalition experienced a similar fate, although it did succeed in instituting a process of constitutional revision, which reduced presidential power, the right of the military to intervene in politics, and the anticapitalist biases of the 1976 constitution. From 1983 to 1985 a coalition government under Socialist leader Mário Soares began to make some headway against the chaos and poverty into which Salazar's long dictatorship, the African wars, and the 1974–75 leftist revolution had thrown Portugal.

In 1986, the centrist Social Democratic party under Aníbal Cavaco Silva won an undisputed majority in parliament, Soares was elected to the presidency, and Portugal was admitted to the European Community (now the European Union). Constitutional revision was furthered in 1989. Political stability and economic reforms created a favorable business climate, especially for renewed foreign investment, and there was strong economic growth. The Socialists returned to power as a minority government after the 1995 parliamentary elections; António Guterres became prime minister.

Barred from running for a third term, Soares retired as president in 1996; he was succeeded by another Socialist, Jorge Fernando Branco de Sampaio. Portugal became part of the European Union's single currency plan in 1999; in October, Guterres and the Socialists were returned to power, again as a minority government. Under a 1987 agreement, Portugal's last overseas territory, Macau, reverted to Chinese sovereignty at the end of 1999. Sampaio was reelected in Jan., 2001. Social Democratic victories in the Dec., 2001, local elections led Guterres to resign as prime minister and party leader in 2001. Early parliamentary elections in Mar., 2002, resulted in a defeat for the Socialists, and Social Democrat José Manuel Durão Barroso became prime minister, heading a coalition with the smaller Popular party. Barroso resigned in July, 2004, in anticipation of his being named president of the European Commission, and Social Democrat Pedro Miguel de Santana Lopes was appointed prime minister.

Parliamentary elections in Feb., 2005, resulted in a victory for the Socialists, who won more than half the seats, and José Sócrates Carvalho Pinto de Sousa became prime minister. In 2006 former prime minister Aníbal Cavaco Silva was elected president, becoming the first center-right candidate to win the office since the 1974 revolution; he won a second term in 2011. The Socialists won the parliamentary elections in Sept., 2009, but failed to secure a majority of the seats. Sócrates subsequently formed a minority government.

High budget deficits in the wake of the global recession of 2008–9 forced the government to adopt an austerity budget in 2010. When additional austerity measures failed to win passage in Mar., 2011, Sócrates resigned, and in April, as cost of financing Portugal's debt increased, he asked for financial aid from the European Union in exchange for austerity measures that were enacted in May. Parliamentary elections in June led to a win for the Social Democrats and the Popular party; they formed a coalition government with Social Democrat Pedro Passos Coelho as prime minister. In Nov., 2011, the new government enacted austerity measures more severe than those put forward by the Socialists.

Dismal economic conditions, increasing unemployment, and decreasing government revenues in 2012 led to the need for greater austerities, and a proposal for a significant increase in employee social security contributions (coupled with a reduction in employer contributions) led to protests and government backtracking in Sept., 2012. A number of austerity measures were also overturned by the constitutional court. In mid-2013 tensions within the governing coalition over austerity measures led to a brief crisis but little ultimate change. By 2014, however, unemployment had fallen from a high of 17.7% in early 2013, and the economy had begun to grow slowly, benefiting from increased exports. In May, 2014, Portugal exited from EU bailout program.

The Oct., 2015, parliamentary elections were won by the governing coalition, but it lost its majority and subsequently lost a confidence vote. In November, the Socialists formed a minority government with the support of leftist parties, and António Costa became prime minister. His government subsequently reversed a number of austerity measures while also reducing other spending to reduce budget deficits. By 2018 its policies had helped revive the economy, though the overall government debt remained high, and wages remained low despite a significant drop in unemployment. Marcelo Rebelo de Sousa, the Social Democratic candidate, won the Jan., 2016, presidential election. The worst drought in more than 20 years contributed to deadly wildfires in June and Oct., 2017. Costa and the Socialists won a plurality in the Oct., 2019, parliamentary elections, and again formed a minority government. Rebelo de Sousa won a second term in Jan., 2021.

Sections in this article:

• Introduction
• Portugal in the Late Twentieth Century
• The RepublicModern Portugal
• Absolutism and Reform
• Years of Decline
• Years of Glory and Decline
• Growth of the State
• Early History and the Growth of the State
• Government
• Economy
• Land and People
• Bibliography

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