Economy of Portugal
Parque das Nações - Lisbon financial center.
Currency	1 Euro = 100 eurocent
Fiscal year	Calendar year
Trade organisations	EU, WTO and OECD
Statistics
GDP	$247 billion PPP (2010 est.)
GDP growth	1.4% (2010 est.)
GDP per capita	$23,000 (2010 est.)
GDP by sector	agriculture: 2.6%; industry: 23%; services: 74.5% (2010 est.)
Inflation (CPI)	1.1% (2010 est.)
Population below poverty line	18% (2006)
Gini coefficient	38.5 (2007)
Labour force	5.57 million (2010 est.)
Labour force by occupation	agriculture: 10%; industry: 30%; services: 60% (2007 est.)
Unemployment	15.2 % (April 2012)[1]
Average gross salary	894 € / 1,300 $, monthly (2010)[2]
Main industries	textiles, clothing, footwear, wood and cork, paper, chemicals, auto-parts manufacturing, base metals, dairy products, wine and other foods, porcelain and ceramics, glassware, technology, telecommunications; ship construction and refurbishment; tourism
Ease of Doing Business Rank	30th[3]
External
Exports	$55 bn (2011)[4]
Export goods	agricultural products, food products, oil products, chemical products, plastics and rubber, skins and leather, wood and cork, wood pulp and paper, textile materials, clothing, footwear, minerals and mineral products, base metals, machinery and tools, vehicles and other transport material, optical and precision instruments
Main export partners	Spain 26.25%, Germany 12.99%, France 12.04%, Angola 7.21%, United Kingdom 5.54% (2009)
Imports	$68.22 billion (2010 est.)
Import goods	agricultural products, food products, oil products, chemical products, plastics and rubber, skins and leather, wood and cork, wood pulp and paper, textile materials, clothing, footwear, minerals and mineral products, base metals, machinery and tools, vehicles and other transport material, optical and precision instruments, computer accessories and parts, semi-conductors and related devices, household goods, passenger cars new and used, wine products
Main import partners	Spain 31.58%, Germany 12.41%, France 8.58%, Italy 5.55%, Netherlands 5.31% (2009)
FDI stock	$105.7 billion (31 December 2010 est.)
Gross external debt	$497.8 billion (30 June 2010) 210% of GDP
Public finances
Public debt	83.2% of GDP (2010 est.)
Revenues	$91.89 billion
Expenses	$106.8 billion (2009 est.)
Economic aid	donor: ODA, $271 million (1995[update])
Credit rating	Standard & Poor's:[5] BBB- (Domestic) BBB- (Foreign) AAA (T&C Assessment) Outlook: Negative[6] Moody's:[6] Ba2 Outlook: Negative Fitch:[6] A- Outlook: Negative / Rating Under Review
Foreign reserves	US$22.931 billion (April 2011)[7]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars

The Economy of Portugal is a high income mixed economy. The Global Competitiveness Report 2008-2009 edition placed Portugal in the 43rd position out of 134 countries and territories.^[8]

Most imports come from the European Union countries of Spain, Germany, France, Italy, and the United Kingdom. Most exports also go to other European Union member states. The Portuguese currency is the euro (€) and has been a part of the Eurozone from the beginning. Portugal's central bank is the Banco de Portugal, which is part of the European System of Central Banks. The major stock exchange is the Euronext Lisbon which is part of the NYSE Euronext, the first global stock exchange.

Although its gradual modernization and relative expansion since the 1960s, the educational system remained underdeveloped until the 2000s when it finally reached the World's best practices and trends. However, the country has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment.^[9] These long-term problems have hindered much economic growth.

The Financial Crisis of 2008 is still affecting the Portuguese economy severely, causing a wide range of domestic problems specifically related to the levels of public deficit in the economy, as well as the excessive debt levels. Nonetheless, the government faces tough choices in its attempts to stimulate the economy, while attempting to maintain its public deficit around the EU average. In April 2011, Portugal confirmed it will have a financial bail-out from the European Union worth €80bn ($115bn, £70bn), following Greece and the Republic of Ireland. It has been predicted that the Portuguese economy will not significantly recover until 2012.^[10]

The country is home to a number of noted leading companies with world reputation, like Grupo Portucel Soporcel, a major world player in the international paper market, Sonae Indústria, the largest producer of wood-based panels in the world, Corticeira Amorim, the world leader in cork production, and Conservas Ramirez, the oldest canned fish producer in continuous operation.

History[link]

Portuguese Colonial Empire[link]

During the Portuguese Empire period, started in the 15th century, until the Carnation Revolution of 1974, the economy of Portugal was centered in trade and raw materials related activities within its vast colonial possessions, mainly in Asia (spices, silk, dyes, porcelain and gems), Africa (ivory, timber, oil and diamonds) and South America (sugar cane, dyes, woods and gold). The country, with a transcontinental empire with plenty of natural resources and vast unexploited areas, was among the most powerful nations in the world.

In 1822, the Portuguese colony of Brazil became an independent country, however, until 1974, Portugal managed to preserve its colonies/overseas territories in Africa, which included Angola and Mozambique, territories that would experience reasonable rates of economic growth until the departure of the Portuguese in 1975.

After a long period of economic divergence before 1914, the Portuguese economy recovered slightly until 1950, entering thereafter on a path of strong economic convergence. Portuguese economic growth in the period 1950-1973 created an opportunity for real integration with the developed economies of Western Europe. Through emigration, trade, tourism and foreign investment, individuals and firms changed their patterns of production and consumption, bringing about a structural transformation. Simultaneously, the increasing complexity of a growing economy raised new technical and organizational challenges, stimulating the formation of modern professional and management teams.^[11][12]

The economy of Portugal and its overseas territories on the eve of the Carnation Revolution (a military coup on April 25, 1974) was growing well above the European average. Average family purchasing power was rising together with new consumption patterns and trends and this was promoting both investment in new capital equipment and consumption expenditure for durable and nondurable consumer goods. The Estado Novo regime economic policy encouraged and created conditions for the formation of large business conglomerates.

The regime maintained a policy of corporatism that resulted in the placement of a big part of the Portuguese economy in the hands of a number of strong conglomerates, including those founded by the families of António Champalimaud (Banco Totta & Açores, Banco Pinto & Sotto Mayor, Secil, Cimpor), José Manuel de Mello (CUF – Companhia União Fabril), Américo Amorim (Corticeira Amorim) and the dos Santos family (Jerónimo Martins). Those Portuguese conglomerates had a business model with similarities to South Korean chaebols and Japanese keiretsus and zaibatsus.

The Companhia União Fabril (CUF) was one of the largest and most diversified Portuguese conglomerates with its core businesses (cement, chemicals, petrochemicals, agrochemicals, textiles, beer, beverages, metallurgy, naval engineering, electrical engineering, insurance, banking, paper, tourism, mining, etc.) and corporate headquarters located in mainland Portugal, but also with branches, plants and several developing business projects all around the Portuguese Empire, especially in the Portuguese territores of Angola and Mozambique.

Other medium sized family companies specialized in textiles (for instance those located in the city of Covilhã and the northwest), ceramics, porcelain, glass and crystal (like those of Alcobaça, Caldas da Raínha and Marinha Grande), engineered wood (like SONAE near Porto), canned fish (like those of Algarve and the northwest), fishing, food and beverage producing, tourism (well established in Estoril/Cascais/Sintra and growing as an international attraction in the Algarve since the 1960s) and in agriculture (like the ones scattered around the Alentejo – known as the breadbasket of Portugal) completed the panorama of the national economy by the early 1970s. In addition, rural areas' populations were committed to agrarianism that was of great importance for a majority of the total population, with many families living exclusively from agriculture or complementing their salaries with farming, husbandry and forestry yields.

Besides that, the overseas territories were also displaying impressive economic growth and development rates from the 1920s onwards. Even during the Portuguese Colonial War (1961-1974), a counterinsurgency war against independentist guerrilla and terrorism, the overseas territories of Angola and Mozambique (Portuguese Overseas Provinces at the time) had countinuous economic growth rates and several sectors of its local economies were booming. They were internationally notable centres of production of oil, coffee, cotton, cashew, coconut, timber, minerals (like diamonds), metals (like iron and aluminium), banana, citrus, tea, sisal, beer, cement, fish and other sea products, beef and textiles.

Labour unions were not allowed and a minimum wage policy was not enforced. However, in a context of an expanding economy, bringing better living conditions for the Portuguese population in the 1960s, the outbreak of the colonial wars in Africa set off significant social changes, among them the rapid incorporation of more and more women into the labour market. Marcelo Caetano moved on to foster economic growth and some social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security.

The objectives of Caetano's pension reform were threefold: enhancing equity, reducing fiscal and actuarial imbalance, and achieving more efficiency for the economy as a whole, for example, by establishing contributions less distortive to labour markets or by allowing the savings generated by pension funds to increase the investments in the economy.

The military coup of 1974[link]

Portuguese population 1961-2003, in thousands, (2005 Data from FAO) with emigration giving way to retornados^[13][14] ranging from 500,000 to 1 million after the revolution.

The post Carnation Revolution period was characterized by chaos and negative economic growth as industries were nationalised and the negative effects of the decoupling of Portugal from its former territories were felt. Heavy industry came to an abrupt halt. All sectors of the economy from manufacturing, mining, chemical, defence, finance, agriculture and fishing went into free fall.

Portugal found itself overnight going from the country in Western Europe with the highest growth rate to the lowest – in fact it experienced several years of negative growth. This was amplified by the mass emigration of skilled workers and enterpreneurs due to political intimidation, and the costs of accommodating in Portugal thousands of refugees from the former overseas provinces in Africa – the retornados.

After the Carnation Revolution's turmoil of 1974, the Portuguese economic basis changed deeply. The Portuguese economy had changed significantly by 1973 prior to the leftist military coup, compared with its position in 1961 – total output (GDP at factor cost) had grown by 120 percent in real terms. Clearly, the prerevolutionary period was characterized by robust annual growth rates for GDP (6.9 percent), industrial production (9 percent), private consumption (6.5 percent), and gross fixed capital formation (7.8 percent).

In 1960, at the initiation of Salazar's more outward-looking economic policy, Portugal's per capita GDP was only 38 percent of the EC-12 average; by the end of the Salazar period, in 1968, it had risen to 48 percent; and in 1973, on the eve of the revolution, Portugal's per capita GDP had reached 56.4 percent of the EC-12 average. In 1975, the year of maximum revolutionary turmoil, Portugal's per capita GDP declined to 52.3 percent of the EC-12 average. Convergence of real GDP growth toward the EC average occurred as a result of Portugal's economic resurgence since 1985. In 1991 Portugal's GDP per capita climbed to 54.9 percent of the EC average, exceeding by a fraction the level attained just during the worst revolutionary period.^[15]

The growth rate of Portuguese merchandise exports during the period 1959 to 1973 was notable – 11 percent per annum. In 1960 the bulk of exports was accounted for by a few products – canned fish, raw and manufactured cork, cotton textiles, and wine. By contrast, in the early 1970s (before the 1974 military coup), Portugal's export list reflected significant product diversification, including both consumer and capital goods. Several branches of Portuguese industry became export-oriented, and in 1973 over one-fifth of Portuguese manufactured output was exported.

There was a 16-percentage-point increase in the participation of the services sector from 39 percent of GDP in 1973 to 55.5 percent in 1990. Most of this growth reflected the exacerbated proliferation of civil service employment and the associated cost of public administration, together with the contribution of tourism services during the 1980s to the detriment of more sustainable and reproductive activities like manufacturing, exporting and technology/capital-intensive industries.

EU membership (1986)[link]

European GDP (PPP) per capita in 2006. Figures from International Monetary Fund^[16]

Portugal's GDP growth evolution (PPP) from 1980 to 2007.

Membership in the European Communities, achieved in 1986, contributed to stable economic growth and development, largely through increased trade ties and an inflow of funds allocated by the European Union (and before that the European Communities) to improve the country's infrastructure. After a recession in 1993, the economy grew at an average annual rate of 3.3%, well above EU averages but well behind the growth of the Portuguese economy before the military coup of 1974.

In order to qualify for the Economic and Monetary Union (EMU), Portugal agreed to cut its fiscal deficit and undertake structural reforms. The EMU brought to Portugal exchange rate stability, falling inflation, and falling interest rates. Falling interest rates, in turn, lowered the cost of public debt and helped the country achieve its fiscal targets.

In 1999, it continued to enjoy sturdy economic growth, falling interest rates, and low unemployment. The country qualified for the Economic and Monetary Union of the European Union (EMU) in 1998 and joined with 10 other European countries in launching the euro on January 1, 1999. The three different designs chosen for the national side of the Portuguese euro coins were drawn by the artist Vitor Manuel Fernandes dos Santos. The inspiration came from the three seals of the first king, Dom Afonso Henriques. Portugal's inflation rate for 1999, 2.4%, was comfortably low.

Household debt has expanded rapidly. The European Commission, OECD, and others have advised the Portuguese Government to exercise more fiscal restraint. Portugal's public deficit exceeded 3% of GNP in 2001, the EU's self-imposed limit, and left the country open to either EU sanctions or tighter financial supervision. The overall rate of growth slowed in late 2001 and into 2002, making fiscal austerity that much more painful to implement.

Portugal has made significant progress in raising its standard of living to that of its EU partners. GDP per capita on a purchasing power parity basis rose from 51% of the EU average in 1985 to 78% in early 2002. By 2005 this had dropped to 72% (of the average across all of now 25 EU members, including seven with GDP per capita lower than Portugal) as GDP per capita rose in other EU countries. Unemployment stood at 4.1% at the end of 2001, which was low compared to the EU average.

GDP growth in 2006, at 1.3%, was the lowest not just in the European Union but in all of Europe. In the 2000s, the Czech Republic, Greece, Malta and Slovenia have all overtaken Portugal in terms of GDP per head. And Portuguese GDP per head has fallen from just over 80% of the EU 25 average in 1999 to just over 70% in 2007. This poor performance of the Portuguese economy was explored in April 2007 by The Economist which described Portugal as "a new sick man of Europe".^[17]

From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).^[18] In December 2009, ratings agency Standard and Poor's lowered its long-term credit assessment of Portugal to "negative" from "stable," voicing pessimism on the country's structural weaknesses in the economy and weak competitiveness that would hamper growth and the capacity to strengthen its public finances and reduce debt.^[19]

However, the Portuguese subsidiaries of large multinational companies, such as Siemens Portugal, Volkswagen Autoeuropa, Qimonda Portugal (before the parent company has filed for bankruptcy), IKEA, Nestlé Portugal, Microsoft Portugal,^[20] Unilever/Jerónimo Martins and Danone Portugal, are still ranked among its most productive in the world for its continued high productivity records.^[21][22] Many Portuguese companies have grown and expanded internationally since after 1986. Among the most notable Portugal-based global companies are SONAE, Amorim, Sogrape, EFACEC, Portugal Telecom, Jerónimo Martins, Cimpor, Unicer, Millennium bcp, Lactogal, Sumol + Compal, Delta Cafés, Derovo, Critical Software, Galp Energia, EDP, Grupo José de Mello, Sovena Group, Valouro, Renova, Teixeira Duarte, Soares da Costa, Portucel Soporcel, Simoldes, Iberomoldes and Logoplaste.

Portuguese Financial Crisis (2010-)[link]

Graph showing the economic data (Surplus/deficit, Public sector debt, GDP growth) of Portugal, the EU and the eurozone for 2009, from Eurostat

The Portuguese Financial crisis is a major political crisis and economic crisis currently taking place in Portugal, which started during the first weeks of 2010. There was renewed anxiety about the excessive levels of debt in some EU countries and, more generally, about the health of the euro has spread from Ireland and Greece to Portugal, Spain and Italy.

Some senior German policy makers went as far as to say that emergency bailouts to Greece and future EU aid recipients should bring with it harsh penalties.^[23]

In 2010, acronyms were widely used by international bond analysts, academics, and by the international economic press when referring to the underperforming economies of Portugal, Italy, Ireland, Greece, and Spain.

A report published in January 2011 by the Diário de Notícias, a leading Portuguese newspaper, demonstrated that in the period between the Carnation Revolution in 1974 and 2010, the democratic Portuguese Republic governments have encouraged over expenditure and investment bubbles through unclear public-private partnerships. This has funded numerous ineffective and unnecessary external consultancy and advising committees and firms, allowed considerable slippage in state-managed public works, inflated top management and head officers' bonuses and wages, causing a persistent and lasting recruitment policy that has boosted the number of redundant public servants.^[24]

The economy has also been damaged by risky credit, public debt creation and mismanaged European structural and cohesion funds for almost four decades. Apparently, the Prime Minister Sócrates's cabinet was not able to forecast or prevent any of this when symptoms first appeared in 2005, and later was incapable of doing anything to ameliorate the situation when the country was on the verge of bankruptcy in 2011.^[25]

In April 2011, Portugal confirmed that it will have a financial bailout from the IMF and the European Union worth 80bn Euros ($115 £70bn), following Greece and the Republic of Ireland.

Employment and Wages[link]

November 2011 Austerity Protest in Lisbon.

As of 2012, the unemployment rate is at almost 15% as of April 2012. The number of unemployed people has increased consistently since 2000 and is estimated to be at around 1 million.

As of May 2006, over 420,000 people were unemployed in Portugal. The unemployment rate in the country was 7.7%. In 2007 the unemployment rate reached 8.4%, the highest unemployment rate in Portugal since 1987. The average European Union unemployment rate decreased to a record low of 7.3% in 2007. In the Portuguese sub-region of Vale do Ave, the unemployment rate has reached 15%, and in the Península de Setúbal sub-region 12.5%.

Officially, in 2008 the unemployment decreased to 7.3% in the second quarter of 2008.^[26] However, it immediately rose again to higher rates. By December 2009, unemployment had surpassed the 10% mark nationwide.

Although being both a developed country and a high income country, Portugal has the lowest GDP per capita in Western Europe and its population has one of the lowest incomes per head among member states of the European Union. According to the Eurostat it had the 6th lowest purchasing power among the 27 member states of the European Union for the period 2005-2007.^[27]

Maria da Conceição Cerdeira, one of the authors of a published research study made by the Technical University of Lisbon's ISEG (Instituto Superior de Economia e Gestão), explained that "in a generic way, there is not a high intensity of work, or a great psychological pressure" in Portugal, for the mass of common ordinary workers, unlike what happens in Northern Europe or North America. Less pressure does not mean, however, a better job. The last European survey of workers, published in 2007 and which formed the basis of this 2009 research study showed that Portugal is the 5th European country with lower quality of work.^[28]

Wages[link]

The average wage in Portugal is €777 per month (net)^[29], and the minimum wage, which is regulated by law, is €485 per month (although paid in 14 installments, which means that on average the minimum wage is €565).

Graduate unemployment[link]

In 2008, about 8%^[30] of the people with a degree were unemployed, and a much larger proportion were underemployed. This directly was correlated with a general lack of employability and student preparation for the workplace seen among many courses in a number of fields offered by certain higher education institutions or departments. The implementation of the Bologna process and other educational reforms, such as the compulsory closing of a number of courses, departments, colleges and private universities after 2005 due to a lack of academic rigour and low teaching standards, tried a totally new approach in order to tackle the problem.

In 2007 alone, some major private universities were investigated by State agencies and two were immediately closed. In addition, a number of degrees of the public system were also discontinued due to lack of quality, low demand by potential students or scarce interest showed by potential employers in fresh graduates on these fields. Secondary and post-secondary non-higher education (intermediate education – ensino médio), involving technical and vocational education, has been redeveloped since 2007, through the government's policies of the XVII Governo Constitucional (headed by Prime-Minister José Sócrates).

Nearly 100,000 (60,000 in 2008)^[30] people with an academic degree are unemployed in Portugal. This group includes a large proportion of young adults.

Economy by sector[link]

Global distribution of Portuguese exports in 2006 as a percentage of the top market (Spain – $11,493,400,000)^[31]

Fisheries and agriculture now account for about 4% of the GDP, down from approximately 25% in 1960, while still employing 13% of the labour force. On the other hand, the tertiary sector has grown, producing 66% of the GDP and providing jobs for 52% of the working population. The remaining 30% of the GDP is mainly produced by the building and energy sectors.

Natural resources[link]

Natural resources such as forests cover about 34% of the country, namely pine trees (13,500 km²), Cork Oak (6800 km²), Holm Oak (5,340 km²), and Eucalyptus (2,430 km²). Cork is a major production, Portugal produces half of the world's cork. Significant mining resources are lithium, tungsten, tin, and uranium.

Agriculture and fisheries[link]

Portugal's Exclusive Economic Zone of 1,727,408 km².

A considerable part of continental Portugal is dedicated to agriculture, although it does not represent most of the economy. The south has developed an extensive monoculture of cereals and olive trees and the Douro Valley in vineyards. Olive trees (4,000 km²; 1,545 sq mi), vineyards (3,750 km²; 1,450 sq mi), wheat (3,000 km²; 1,160 sq mi) and maize (2,680 km²; 1,035 sq mi) are produced in vast areas. Portuguese wine and olive oil are especially praised by nationals for their quality, thus external competition (even at much lower prices) has had little effect on consumer demand.

Portugal is a traditional wine grower, and has exported its wines since the dawn of western civilization; Port Wine, Vinho Verde and Madeira Wine are the leading wine exporters. Portugal is also a quality producer of fruits, namely the Algarve oranges, cherries (large production in Cova da Beira and Alto Alentejo), and Oeste region's pêra rocha (a type of pear). Other exports include horticulture and floriculture products, beet sugar, sunflower oil, cork, and tobacco.

The Portuguese fishing industry is fairly large and diversified. Fishing vessels classified according to the area in which they operate, can be divided into local fishing vessels, coastal fishing vessels and long-distance fishing vessels. The local fleet is mainly composed of small traditional vessels (less than 5 GRT), comprising, in 2004, 87% of the total fishing fleet and accounting for 8% of the total tonnage. These vessels are usually equipped to use more than one fishing method, such as hooks, gill nets and traps, and constitute the so-called polyvalent segment of the fleet.

Their physical output is low but reasonable levels of income are attained by virtue of the high commercial value of the species they capture: octopus, black scabbardfish, conger, pouting, hake and anglerfish. Purse seine fishing is also part of the local fleet and has, on the mainland, only one target species: the sardine. This fishery represents 37% of total landings. Portugal's Exclusive Economic Zone has 1,727,408 km².

The coastal fishing fleet accounted for only 13% of vessels but had the largest GRT (93%). These vessels operate in areas farther from the coast, and even outside the Portugal's Exclusive Economic Zone. The coastal fishing fleet comprises polyvalent, purse seine and trawl fishing vessels. The trawlers operate only on the mainland shelf and target demersal species such as horse mackerel, blue whiting, octopus and crustaceans.

The crustacean trawling fishery targets Norway lobster, red shrimp and deepwater rose shrimp. The most important fish species landed in Portugal in 2004 were sardine, mackerel and horse mackerel, representing 37%, 9% and 8% of total landings by weight, and 13%, 1% and 8% of total value, respectively. Molluscs accounted for only 12% of total landings in weight, but 22% of total landings in value. Crustaceans were 0.6% of the total landings by weight and 5% by value.

Industry[link]

Oeiras Municipality, in Lisbon Metropolitan Area, has headquarters of several Portuguese subsidiaries of major multinational companies.

The major industries include: oil refineries, petrochemistry, cement production, automotive and ship industries, electrical and electronics industries, machinery, pulp and paper industry, injection moulding, plastic products, textile, footwear, leather, furniture, ceramics, beverages and food industry and cork (leader producer). Automotive and other mechanical industries are primarily located in and around Setúbal, Porto, Lisbon, Aveiro, Braga, and Santarém.

Coimbra and Oeiras have growing technological-based industries, including pharmaceuticals and software. Sines is a major petrochemical centre. Maia has one of the largest industrial parks of the country, including noted wood processing and food industries. Figueira da Foz is a major centre of pulp and paper industry. Marinha Grande is the most reputed glass making centre of Portugal. Leiria, Oliveira de Azeméis, Vale de Cambra and Viseu, have important light industries, including injection moulding and plastics.

Modern non-traditional technology-based industries like aerospace, biotechnology and information technology, have been developed in several locations across the country. Alverca, Covilhã,^[32] Évora,^[33] and Ponte de Sor are the main centres of Portuguese aerospace industry, which is led by Brazil-based company Embraer and the Portuguese company OGMA. Since after the turn of the 21st century, many major biotechnology and information technology industries have been founded and are concentrated in the metropolitan areas of Lisbon, Porto, Braga, Coimbra and Aveiro.

Services[link]

The tertiary sector has grown, producing 66% of the GDP and providing jobs for 52% of the working population. The most significant growth rates are found in the trade sector, due to the introduction of modern means of distribution, transport and telecommunications. Financial tertiary have benefited from privatisation, also gaining in terms of efficiency. Tourism in Portugal has developed significantly and generates approximately 5% of the wealth produced in Portugal.

Financial market[link]

In the Portuguese financial market, the major stock exchange is the Euronext Lisbon which is part of the NYSE Euronext, the first global stock exchange. It is supervised and regulated by the Portuguese Securities Market Commission. The PSI-20 is Portugal's most selective and widely known stock index. Portugal's central bank is the Banco de Portugal, which is an integral part of the European System of Central Banks. The largest Portuguese banks are Banco Comercial Português and the state-owned Caixa Geral de Depósitos.^[34]

Portuguese banks hold strategic stakes in other sectors of the economy, including the insurance sector. Foreign bank participation is relatively high as is state ownership through the Caixa Geral de Depósitos (CGD). Overall, Portugal's financial system is sound, well managed and competitive, with shorter-term risks and vulnerabilities quite well contained, and with the system buttressed by a strong financial policy framework. Despite being relatively small and concentrated, Portugal's banking system generally compares well with other European Union (EU) countries in terms of efficiency, profitability, and asset quality, with solvency also close to European levels.^[35]

Across all the financial sub-sectors, and with particular reference to the larger institutions, supervision of Portuguese financial institutions is active, professional and well organized. The insurance sector has performed well, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting risks, both the life and non-life sectors, overall, are estimated to be able to withstand a number of severe shocks, even though the impact on individual insurers varies widely.^[36]

Competitiveness[link]

Portugal's competitiveness in the world[link]

A graphic presentation of Portugal's exports.

The Global Competitiveness Report for 2005, published by the World Economic Forum, placed Portugal on the 22nd position, ahead of countries and territories like Spain, Ireland, France, Belgium and Hong Kong. This table showed that Portugal had stepped two places regarding the 2004 ranking. On the Technology index, Portugal was ranked 20th, on the Public Institutions index Portugal was the 15th best and on the Macroeconomic index, Portugal was placed on the 37th position. ^[37]

The Global Competitiveness Index 2007-2008 placed Portugal on the 40th position out of 131 countries and territories.^[38] and in the 2008-2009 edition, it went even further down as Portugal was placed as the 43rd out of 134 countries and territories.^[8]

Competitiveness by city[link]

A study concerning competitiveness of the 18 Portuguese district capitals, complying with World Economic Forum methodology, was made by Minho University economics researchers. It was published in Público newspaper on 30 September 2006. The best-ranked cities in the study were Évora, Lisbon and Coimbra. ^[39], ^[40], ^[41]

Ranking:

• 1.Évora: 7,293
• 2.Lisbon: 6,454
• 3.Coimbra: 6,042
• 4.Beja: 5,660
• 5.Leiria: 5,609
• 6.Castelo Branco: 5,608
• 7.Aveiro: 5,452
• 8.Guarda: 5,178
• 9.Santarém: 5,037
• 10.Portalegre: 4,711
• 11.Viseu: 4,628
• 12.Vila Real: 5,514
• 13.Bragança: 4,271
• 14.Setúbal: 4,070
• 15.Braga: 4,055
• 16.Faro: 3,971
• 17.Viana do Castelo: 3,859
• 18.Porto: 3,577

Domestic problems[link]

• Forest Fires: Like in other countries with very hot summers and seasonal drying of soils and vegetation, every year large areas of the Portuguese forest is destroyed. This has an important impact on the economy because many people and industries depend on forestry related activities. It is also a very dramatic ecological problem and a safety issue for the populations.

• Portugal's Public Debt: The public debt exceeds 80% of GDP on 2009 figures. This problem is a threat to the Portuguese economy and the State's financial sustainability.^[42]

• Over-dimensioned Public Sector: The public sector has been generally considered a very large, expensive and inefficient part of the economy. An excess of public employees and useless bureaucracy results in the loss of millions of euros every year. From the XVI Governo Constitucional government, headed by Prime Minister José Durão Barroso, to the XVII Governo Constitucional government, headed by Prime Minister José Sócrates (which tried to create new rules and implement reforms aiming at better efficiency, rationalized resource allocation, fight civil servant excedentary overcapacity (excedentários) and less bureaucracy for both citizens and companies – e.g.: empresa na hora [8], PRACE – Programa de Reestruturação da Administração Central do Estado ^[43], and SIMPLEX – Programa de Simplificação Administrativa e Legislativa,^[44] among others), the "public expenditure problem" has been a major concern in Portugal, however it had little effect, and the country's public debt and deficit were both out of control by 2010. In addition, João Bilhim who directed in 2005 the committee responsible for the Programme for Restructuring the State's Central Administration (PRACE) said to be disappointed with the results of the reforms tried in the mid-2000s.^[45]

• Corruption: According to the 2008 Corruption Perceptions Index of countries published by Transparency International, Portugal had the 32nd lowest level of corruption, out of 180 countries. In 2009 it had slumped to the 35th place. Nevertheless, corruption has become an issue of major political and economic significance for the Portuguese. The responsible authorities and many civic associations and think tanks are trying to combat corruption before it increases further. Many abusive lobbies and corruption schemes are related to concessions, unclear approvals to contractors and economic groups, or job creation for and commercial agreements with friends and family members, mainly involving the huge public sector and companies. Some cases are well known and were widely reported in the media, such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power.^[46][47] Notable criminal cases include the Face Oculta, the Oeiras Municipality Mayor Isaltino Morais scandal, the Apito Dourado and the Saco Azul de Felgueiras.

Education, training and research in business and economic sciences[link]

There are several higher education institutions awarding academic degrees in economics and business management across the whole country. Almost every polytechnical institute have programmes in management and administration. All state-run universities have programmes in economics. Among the largest and most reputed universities which host an economics department and develop research on economics, are the Technical University of Lisbon (through its Instituto Superior de Economia e Gestão – ISEG), ISCTE – Lisbon University Institute, the Portuguese Catholic University at Lisbon (through its Faculdade de Ciências Económicas e Empresariais – FCEE), the University of Porto (through its Faculdade de Economia da Universidade do Porto – FEP); the New University of Lisbon (through its Nova School of Business and Economics – NOVASBE); the Minho University (through its Escola de Economia e Gestão – EEG); and the University of Coimbra (through its Faculdade de Economia da Universidade de Coimbra – FEUC).

The Financial Times European Business school ranking has consistently placed the Católica Lisbon School of Business and Economics and the Nova School of Business and Economics among the top European business and economics schools. Both the Bank of Portugal and Statistics Portugal develop lengthy and thoroughly systematic research and make reports on the Portuguese economy.

References[link]

External links[link]

• Portugal Economy Probe Web site
• OECD's Portugal country Web site
• OECD Economic Survey of Portugal
• The "PIG" with a Little "P"

v t e Life in Portugal Culture • Demographics • Economy • Education • Geography • History • Holidays • Languages • Military • Politics • Religion • Science and technology • Sports • Transport

Portuguese Republic República Portuguesa (Portuguese) República Pertuesa (Mirandese)
Flag Coat of arms
Anthem: "A Portuguesa" "The Portuguese Anthem"
Location of  Portugal  (dark green) – in Europe  (green & dark grey) – in the European Union  (green)  —  [Legend]
Capital (and largest city)		Lisbon 38°46′N 9°9′W / 38.767°N 9.15°W / 38.767; -9.15
Official language(s)		Portuguese
Recognised regional languages		Mirandese1
Ethnic groups (2007)		96.87% Portuguese 3.13% other ethnicities (Cape Verdeans, Brazilians, Goans, Angolans, Ukrainians, etc.)[1]
Demonym		Portuguese
Government		Unitary parliamentary constitutional republic
-	President	Aníbal Cavaco Silva (PSD)
-	Prime Minister	Pedro Passos Coelho (PSD)
-	Assembly President	Assunção Esteves (PSD)
Legislature		Assembly of the Republic
Formation		Conventional date for independence is 1139
-	Founding	868
-	Re-founding	1095
-	De facto sovereignty	24 June 1128
-	Kingdom	25 July 1139
-	Recognized	5 October 1143
-	Papal Recognition	23 May 1179
-	Republic	5 October 1910
-	Democracy	25 April 1974
Area
-	Total	92,090 km2 (111th) 35,645 sq mi
-	Water (%)	0.5
Population
-	2012 estimate	10,578,776[2] (77th)
-	2011 census	10,561,614[3]
-	Density	115/km2 (96th) 298/sq mi
GDP (PPP)		2011 estimate
-	Total	$248.981 billion[4] (49)
-	Per capita	$23,361[4] (41)
GDP (nominal)		2011 estimate
-	Total	$238.880 billion[4] (42)
-	Per capita	$22,413[4] (35)
Gini (2009)		33.7[5]
HDI (2011)		0.809[6] (very high) (41st)
Currency		Euro (€)2 (EUR)
Time zone		WET (UTC+0)
-	Summer (DST)	WEST (UTC+1)
		Note that the Azores are in a different timezone
Date formats		dd-mm-yyyy, yyyy-mm-dd, yyyy/mm/dd
Drives on the		right
ISO 3166 code		PT
Internet TLD		.pt
Calling code		351
1	Mirandese, spoken in some villages of the municipality of Miranda do Douro, was officially recognized in 1999 (Lei n.° 7/99 de 29 de Janeiro), since then awarding an official right-of-use Mirandese to the linguistic minority it is concerned.[7] The Portuguese Sign Language is also recognized.
2	Before 1999: Portuguese escudo.

Portugal ⁱ/ˈpɔrtʃʉɡəl/ (Portuguese: Portugal, IPA: [puɾtuˈɣaɫ]), officially the Portuguese Republic (Portuguese: República Portuguesa) is a country situated in southwestern Europe on the Iberian Peninsula . Portugal is the westernmost country of mainland Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the Azores and Madeira are part of Portugal. The country is named after its second largest city, Porto, whose Latin name was Portus Cale.^[8]

The land within the borders of the current Portuguese Republic has been continuously settled since prehistoric times: occupied by Celts like the Gallaeci and the Lusitanians, integrated into the Roman Republic and later settled by Germanic peoples such as the Suebi, Swabians, Vandals and the Visigoths. In the 8th century most of the Iberian Peninsula was conquered by Moorish invaders professing Islam, which were later expelled by the Knights Templar under the Order of Christ. During the Christian Reconquista, Portugal established itself as an independent kingdom from León in 1139, claiming to be the oldest European nation state.^[9]

In the 15th and 16th centuries, as the result of pioneering the Age of Discovery, Portugal expanded western influence and established a global empire that included possessions in Africa, Asia, Oceania, and South America, becoming the world's major economic, political and military global power. The Portuguese Empire was the first global empire in history,^[10] and also the longest lived of the European colonial empires, spanning almost 600 years, from the capture of Ceuta in 1415, to the handover of Macau to China in 1999. However, the country's international status was greatly reduced during the 19th century, especially following the Independence of Brazil, its largest colony in its history.

After the 5 October 1910 revolution deposed the monarchy, the democratic but unstable Portuguese First Republic was established being then superseded by the "Estado Novo" authoritarian regime. Democracy was restored after the Portuguese Colonial War and the Carnation Revolution in 1974, after which Portugal's last overseas provinces became independent (most prominently Angola and Mozambique); the last overseas territory, Macau, was ceded to China in 1999.

Portugal is a developed country with a very high Human Development Index, the world's 19th-highest quality-of-life, and a strong healthcare system. Portugal is one of the world's most globalized and peaceful nations:^[11] a member of the European Union and the United Nations, and a founding member of the Latin Union, the Organization of Ibero-American States, OECD, NATO, Community of Portuguese Language Countries, the Eurozone and the Schengen Agreement.

History[link]

Early history[link]

The Roman Temple of Diana, Évora.

The early history of Portugal is shared with the rest of the Iberian Peninsula. The name of Portugal derives from the Roman name Portus Cale. The region was settled by Pre-Celts and Celts, giving origin to peoples like the Gallaeci, Lusitanians, Celtici and Cynetes, visited by Phoenicians and Carthaginians, incorporated in the Roman Republic dominions as Lusitania and part of Gallaecia (both part of Hispania), after 45 BC until 298 AD, settled again by Suebi, Buri, and Visigoths, and conquered by Moors. Other minor influences include some 5th century vestiges of Alan settlement, which were found in Alenquer, Coimbra and even Lisbon.^[12]

Reconquista[link]

Guimarães Castle, the city is known as the cradle of Portugal.

During the Reconquista period, Christians reconquered the Iberian Peninsula from the Muslim and Moorish domination. In 868, the First County of Portugal was formed. A victory over the Muslims at Battle of Ourique in 1139 is traditionally taken as the occasion when the County of Portugal as a fief of the Kingdom of León was transformed into the independent Kingdom of Portugal.

Henry, to whom the newly formed county was awarded by Alfonso VI for his role in reconquering land from the Moors, based his newly formed county in Bracara Augusta (nowadays Braga), capital city of the ancient Roman province, and also previous capital of several kingdoms over the first millennia.

On 24 June 1128, the Battle of São Mamede occurred near Guimarães. Afonso Henriques, Count of Portugal, defeated his mother Countess Teresa and her lover Fernão Peres de Trava, thereby establishing himself as sole leader. Afonso Henriques officially declared Portugal's independence when he proclaimed himself king of Portugal on 25 July 1139, after the Battle of Ourique. He was recognized as such in 1143 by King Alfonso VII of León and Castile, and in 1179 by Pope Alexander III.

The Batalha Monastery, built in 1385, is one of the best and original examples of Late Gothic architecture in Portugal. It is also a World Heritage Site.

Afonso Henriques and his successors, aided by military monastic orders, pushed southward to drive out the Moors, as the size of Portugal covered about half of its present area. In 1249, this Reconquista ended with the capture of the Algarve on the southern coast, giving Portugal its present-day borders, with minor exceptions.

In 1348 and 1349, like the rest of Europe, Portugal was devastated by the Black Death.^[13]

In 1373, Portugal made an alliance with England, which is the longest-standing alliance in the world.

In 1383, the king of Castile, husband of the daughter of the Portuguese king who had died without a male heir, claimed his throne. An ensuing popular revolt led to the 1383-1385 Crisis. A faction of petty noblemen and commoners, led by John of Aviz (later John I), seconded by General Nuno Álvares Pereira defeated the Castilians in the Battle of Aljubarrota. This celebrated battle is still a symbol of glory and the struggle for independence from neighboring Spain.

Exploration, colonization and trade[link]

Vasco da Gama lands at Calicut (Indian Subcontinent), on May 20th 1498.

In the following decades, Portugal spearheaded the exploration of the world and undertook the Age of Discovery. Infante Dom Henry the Navigator, son of King João I, became the main sponsor and patron of this endeavor.

In 1415, Portugal acquired the first of its overseas colonies by conquering Ceuta. It was the first prosperous Islamic trade center in North Africa. There followed the first discoveries in the Atlantic: Madeira and the Azores, which led to the first colonization movements.

Throughout the 15th century, Portuguese explorers sailed the coast of Africa, establishing trading posts for several common types of tradable commodities at the time, ranging from gold to slaves, as they looked for a route to India and its spices, which were coveted in Europe.

The Treaty of Tordesillas, intended to resolve the dispute that had been created following the return of Christopher Columbus, was signed on 7 June 1494, and divided the newly discovered lands outside Europe between Portugal and Spain along a meridian 370 leagues west of the Cape Verde islands (off the west coast of Africa).

In 1498, Vasco da Gama finally reached India and brought economic prosperity to Portugal and its population of 1.7 million residents.

In 1500, Pedro Álvares Cabral discovered Brazil and claimed it for Portugal.^[14] Ten years later, Afonso de Albuquerque conquered Goa in India, Ormuz in the Persian Strait, and Malacca, now a state in Malaysia. Thus, the Portuguese empire held dominion over commerce in the Indian Ocean and South Atlantic. The Portuguese sailors set out to reach Eastern Asia by sailing eastward from Europe landing in such places as Taiwan, Japan, the island of Timor, they were also the first Europeans to discover Australia and even New Zealand.^[15]

The Treaty of Zaragoza, signed on 22 April 1529 between Portugal and Spain, specified the antimeridian to the line of demarcation specified in the Treaty of Tordesillas. All these facts made Portugal the world's major economic, military, and political power from the 15th century to the beginning of the 16th century.

Iberian Union and Restoration[link]

Acclamation of John IV as King of Portugal. Painting by Veloso Salgado, in the Military Museum, Lisbon.

An anachronistic map of the Portuguese Empire (1415–1999). Red – actual possessions; Olive – explorations; Orange – areas of influence and trade; Pink – claims of sovereignty; Green – trading posts; Blue – main sea explorations, routes and areas of influence. The disputed Portuguese discovery of Australia is not shown.

Portugal's independence was interrupted between 1580 and 1640. This occurred because the last two kings of the House of Aviz – King Sebastian, who died in the battle of Alcácer Quibir in Morocco, and his great-uncle and successor, King Henry of Portugal – both died without heirs, resulting in the extinction of that royal house. Subsequently, Philip II of Spain claimed the throne and so became Philip I of Portugal. Although Portugal did not lose its formal independence, it was governed by the same monarch who governed Spain, briefly forming a union of kingdoms, as a personal union. The joining of the two crowns deprived Portugal of a separate foreign policy, and led to the involvement in the Eighty Years' War being fought in Europe at the time between Spain and the Netherlands. War led to a deterioration of the relations with Portugal's oldest ally, England, and the loss of Hormuz. From 1595 to 1663 the Dutch-Portuguese War primarily involved the Dutch companies invading many Portuguese colonies and commercial interests in Brazil, Africa, India and the Far East, resulting in the loss of the Portuguese Indian Sea trade monopoly.

In 1640, John IV spearheaded an uprising backed by disgruntled nobles and was proclaimed king. The Portuguese Restoration War between Portugal and Spain on the aftermath of the 1640 revolt, ended the sixty-year period of the Iberian Union under the House of Habsburg. This was the beginning of the House of Braganza, which reigned in Portugal until 1910.

Official estimates — and most estimates made so far — place the number of Portuguese migrants to Colonial Brazil during the gold rush of the 18th century at 600,000.^[16] Though not usually studied, this represented one of the largest movements of European populations to their colonies to the Americas during the colonial times. According to historian Leslie Bethell, "In 1700 Portugal had a population of about two million people." During the 18th century, hundreds of thousands left for the Portuguese Colony of Brazil, despite efforts by the crown to place severe restrictions on emigration.^[17]

Pombaline era[link]

Sebastião José de Carvalho e Melo, 1st Marquess of Pombal

In 1738, Sebastião José de Carvalho e Melo, the talented son of a Lisbon squire, began a diplomatic career as the Portuguese Ambassador in London and later in Vienna. The Queen consort of Portugal, Archduchess Maria Anne Josefa of Austria, was fond of Melo; and after his first wife died, she arranged the widowed de Melo's second marriage to the daughter of the Austrian Field Marshal Leopold Josef, Count von Daun. King John V of Portugal, however, was not pleased and recalled Melo to Portugal in 1749. John V died the following year and his son, Joseph I of Portugal was crowned. In contrast to his father, Joseph I was fond of de Melo, and with the Queen Mother's approval, he appointed Melo as Minister of Foreign Affairs. As the King's confidence in de Melo increased, the King entrusted him with more control of the state. By 1755, Sebastião de Melo was made Prime Minister. Impressed by British economic success he had witnessed while Ambassador, he successfully implemented similar economic policies in Portugal. He abolished slavery in Portugal and in the Portuguese colonies in India; reorganized the army and the navy; restructured the University of Coimbra, and ended discrimination against different Christian sects in Portugal.

But Sebastião de Melo's greatest reforms were economic and financial, with the creation of several companies and guilds to regulate every commercial activity. He demarcated the region for production of Port to ensure the wine's quality, and this was the first attempt to control wine quality and production in Europe. He ruled with a strong hand by imposing strict law upon all classes of Portuguese society from the high nobility to the poorest working class, along with a widespread review of the country's tax system. These reforms gained him enemies in the upper classes, especially among the high nobility, who despised him as a social upstart.

1755 copper engraving showing Lisbon in flames and a tidal wave overwhelming the ships in the harbor after the 1755 Lisbon earthquake.

Disaster fell upon Portugal in the morning of 1 November 1755, when Lisbon was struck by a violent earthquake with an estimated Richter scale magnitude of 9. The city was razed to the ground by the earthquake and the subsequent tidal wave and ensuing fires.^[18] Sebastião de Melo survived by a stroke of luck and then immediately embarked on rebuilding the city, with his famous quote: "What now? We bury the dead and feed the living."

Despite the calamity and huge death toll, Lisbon suffered no epidemics and within less than one year was already being rebuilt. The new downtown of Lisbon was designed to resist subsequent earthquakes. Architectural models were built for tests, and the effects of an earthquake were simulated by marching troops around the models. The buildings and big squares of the Pombaline Downtown of Lisbon still remain as one of Lisbon's tourist attractions: They represent the world's first quake-proof buildings^{[citation needed]}. Sebastião de Melo also made an important contribution to the study of seismology by designing an inquiry that was sent to every parish in the country.

Following the earthquake, Joseph I gave his Prime Minister even more power, and Sebastião de Melo became a powerful, progressive dictator. As his power grew, his enemies increased in number, and bitter disputes with the high nobility became frequent. In 1758 Joseph I was wounded in an attempted assassination. The Távora family and the Duke of Aveiro were implicated and executed after a quick trial. The Jesuits were expelled from the country and their assets confiscated by the crown. Sebastião de Melo showed no mercy and prosecuted every person involved, even women and children. This was the final stroke that broke the power of the aristocracy and ensured the victory of the Minister against his enemies. Based upon his swift resolve, Joseph I made his loyal minister Count of Oeiras in 1759.

Maria I of Portugal as princess of Brazil.

In 1762 Spain invaded Portuguese territory as part of the Seven Years' War, however by 1763 the status-quo between Spain and Portugal before the war had been restored.

Following the Távora affair, the new Count of Oeiras knew no opposition. Made "Marquis of Pombal" in 1770, he effectively ruled Portugal until Joseph I's death in 1779. However, historians also argue that Pombal’s "enlightenment," while far-reaching, was primarily a mechanism for enhancing autocracy at the expense of individual liberty and especially an apparatus for crushing opposition, suppressing criticism, and furthering colonial economic exploitation as well as intensifying book censorship and consolidating personal control and profit.^[19]

The new ruler, Queen Maria I of Portugal, disliked the Marquis because of the power he amassed, and never forgave him for the ruthlessness at which he dispatched the Távora family, and upon her accession to the throne, she did what she had long vowed to do: she withdrew all his political offices. Pombal died peacefully on his estate at Pombal in 1782.

In the autumn of 1807, Napoleon moved French troops through Spain to invade Portugal. From 1807 to 1811, British-Portuguese forces would successfully fight against the French invasion of Portugal, while the royal family and the Portuguese nobility, including Maria I, relocated to the Portuguese territory of Brazil, at that time a colony of the Portuguese Empire, in South America. This episode is known as the Transfer of the Portuguese Court to Brazil.

Brazilian independence[link]

Brazil just before independence in 1822 – Cisplatina (modern Uruguay) was one of the last additions to the territory of Brazil under Portuguese rule.

Portugal began a slow but inexorable decline until the 20th century. This decline was hastened by the independence in 1822 of the country's largest colonial possession, Brazil. In 1807, as Napoleon's army closed in on Portugal's capital city of Lisbon, the Prince Regent João VI of Portugal transferred his court to Brazil and established Rio de Janeiro as the capital of the Portuguese Empire. In 1815, the Portuguese Empire changed its name to the United Kingdom of Portugal, Brazil and the Algarves.

Due to the change in its status and the arrival of the Portuguese royal family, Brazilian administrative, civic, economical, military, educational, and scientific apparatus were expanded and highly modernized. Portuguese and their allied British troops fought against the French Invasion of Portugal and by 1815 the situation in Europe had cooled down sufficiently that João VI would be able to safely return to Lisbon. However, the King of Portugal remained in Brazil until the Liberal Revolution of 1820, which started in Porto, demanded his return to Lisbon in 1821.

Thus he returned to Portugal but left his son Pedro in charge of Brazil. When the king attempted the following year to return the Kingdom of Brazil to subordinate status as a principality, his son Pedro, with the overwhelming support of the Brazilian elites, declared Brazil's independence from Portugal. Cisplatina (today's sovereign state of Uruguay), in the south, was one of the last additions to the territory of Brazil under Portuguese rule.

Colonial Portuguese Africa[link]

The Pink Map project: Portugal's claim of sovereingty over the lands between Portuguese Angola and Portuguese Mozambique.

At the height of European colonialism in the 19th century, Portugal had already lost its territory in South America and all but a few bases in Asia. Luanda, Benguela, Bissau, Lourenço Marques, Porto Amboim and the Island of Mozambique were among the oldest Portuguese-founded port cities in its African territories. During this phase, Portuguese colonialism focused on expanding its outposts in Africa into nation-sized territories to compete with other European powers there.

With the Conference of Berlin of 1884, Portuguese Africa territories had their borders formally established on request of Portugal in order to protect the centuries-long Portuguese interests in the continent from rivalries enticed by the Scramble for Africa. Portuguese Africa's cities and towns like Nova Lisboa, Sá da Bandeira, Silva Porto, Malanje, Tete, Vila Junqueiro, Vila Pery and Vila Cabral were founded or redeveloped inland during this period and beyond. New coastal towns like Beira, Moçâmedes, Lobito, João Belo, Nacala and Porto Amélia, were also founded. Even before the turn of the 20th century, railway tracks as the Benguela railway in Angola, and the Beira railway in Mozambique, started to be built to link coastal areas and selected inland regions.

Other episodes during this period of the Portuguese presence in Africa include the 1890 British Ultimatum. This forced the Portuguese military to retreat from the land between the Portuguese colonies of Mozambique and Angola (most of present-day Zimbabwe and Zambia), which had been claimed by Portugal and included in its "Pink Map," which clashed with British aspirations to create a Cape to Cairo Railway. The Portuguese territories in Africa were Cape Verde, São Tomé and Príncipe, Portuguese Guinea, Angola, and Mozambique. The tiny fortress of São João Baptista de Ajudá on the coast of Dahomey, was also under Portuguese rule. In addition, the country still ruled the Asian territories of Portuguese India, Portuguese Timor and Macau.

Republic[link]

Manuel II, the last King of Portugal

On 1 February 1908, the king Dom Carlos I of Portugal and his heir apparent, Prince Royal Dom Luís Filipe, Duke of Braganza, were murdered in Lisbon. Under his rule, Portugal was twice declared bankrupt – on 14 June 1892, and again on 10 May 1902 – causing social turmoil, economic disturbances, protests, revolts and criticism of the monarchy. Manuel II of Portugal become the new king, but was eventually overthrown by the 5 October 1910 revolution, which abolished the regime and instated republicanism in Portugal. Political instability and economic weaknesses were fertile ground for chaos and unrest during the Portuguese First Republic, which aggravated by the Portuguese military intervention in World War I, led to a military coup d'état in 1926 and the creation of the National Dictatorship (Ditadura Nacional).

This in turn led to the establishment of the right-wing dictatorship of the Estado Novo under António de Oliveira Salazar in 1933. Portugal was one of only five European countries to remain neutral in World War II. From the 1940s to the 1960s, Portugal was a founding member of NATO, OECD and the European Free Trade Association (EFTA). Gradually, new economic development projects and relocation of white mainland Portuguese citizens into the overseas colonies in Africa were initiated, with Angola and Mozambique, as the largest and richest overseas territories, being the main targets of those initiatives.

End of colonialism[link]

Map of the Portuguese Overseas provinces in Africa by the time of the Portuguese Colonial War (1961–1974).

After India attained independence in 1947, pro-Indian residents of Dadra and Nagar Haveli, with the support of the Indian government and the help of pro-independence organisations, liberated the territories of Dadra and Nagar Haveli from Portuguese rule in 1954.^[20] In 1961, São João Baptista de Ajudá's annexation by the Republic of Dahomey was the start of a process that led to the final dissolution of the centuries-old Portuguese Empire. According to the census of 1921 São João Baptista de Ajudá had 5 inhabitants and, at the moment of the ultimatum by the Dahomey Government, it had only 2 inhabitants representing Portuguese Sovereignty. Another forcible retreat from overseas territories occurred in December 1961 when Portugal refused to relinquish the territories of Goa, Daman and Diu. As a result, the Portuguese army and navy were involved in armed conflict in its colony of Portuguese India against the Indian Armed Forces. The operations resulted in the defeat of the limited Portuguese defensive garrison, which was forced to surrender to a much larger military force. The outcome was the loss of the remaining Portuguese territories in the Indian subcontinent. The Portuguese regime refused to recognize Indian sovereignty over the annexed territories, which continued to be represented in Portugal's National Assembly until the military coup of 1974.

Also in the early 1960s, independence movements in the Portuguese overseas provinces of Angola, Mozambique and Guinea in Africa, resulted in the Portuguese Colonial War (1961–1974), that would only end in 1974 after a military coup in Lisbon — the Carnation Revolution.

Carnation Revolution[link]

António Oliveira Salazar Prime Minister (1932–1968) and founder of the Estado Novo regime.

Throughout the colonial war period Portugal had to deal with increasing dissent, arms embargoes and other punitive sanctions imposed by most of the international community. However, the authoritarian and conservative Estado Novo regime, firstly installed and governed by António de Oliveira Salazar and from 1968 onwards led by Marcelo Caetano, tried to preserve a vast centuries-long intercontinental empire with a total area of 2,168,071 km².^[21] The Portuguese government and army successfully resisted the decolonization of its overseas territories until April 1974, when a bloodless left-wing military coup in Lisbon, known as the Carnation Revolution, led the way for the independence of the overseas territories in Africa and Asia, as well as for the restoration of democracy after two years of a transitional period known as PREC (Processo Revolucionário Em Curso, or On-Going Revolutionary Process). This period was characterized by social turmoil and power disputes between left- and right-wing political forces. Some factions, including Álvaro Cunhal's Portuguese Communist Party (PCP), unsuccessfully tried to turn the country into a communist state. The retreat from the overseas territories and the acceptance of its independence terms by Portuguese head representatives for overseas negotiations, which would create newly-independent communist states in 1975 (most notably the People's Republic of Angola and the People's Republic of Mozambique), prompted a mass exodus of Portuguese citizens from Portugal's African territories (mostly from Portuguese Angola and Mozambique).^[22][23]

Mário Soares, Prime Minister of Portugal from 1976 to 1978 and from 1983 to 1985 and President of the Portuguese Republic from 1986 to 1996.

Over a million destitute Portuguese refugees fled the former Portuguese colonies. Mário Soares and António de Almeida Santos were charged with organising the independence of Portugal's overseas territories. By 1975, all the Portuguese African territories were independent and Portugal held its first democratic elections in 50 years. However, the country continued to be governed by a military-civilian provisional administration until the Portuguese legislative election of 1976 that took place on 25 April, exactly one year after the previous election, and two years after the Carnation Revolution. It was won by the Portuguese Socialist Party (PS) and Mário Soares, its leader, became Prime Minister of the 1st Constitutional Government on 23 July. Mário Soares would be Prime Minister from 1976 to 1978 and again from 1983 to 1985. In this capacity Soares tried to resume the economic growth and development record that had been achieved before the Carnation Revolution, during the last decade of the previous regime. On the other hand, he initiated the process of adhesion to the European Economic Community (EEC) by starting adhesion negotiations as early as 1977. However, the country bounced between socialism and adherence to the neoliberal model. Land reform and nationalizations were enforced; the Portuguese Constitution (approved in 1976) was rewritten in order to accommodate socialist and communist principles. Until the constitutional revisions of 1982 and 1989, the constitution was a highly charged ideological document with numerous references to socialism, the rights of workers, and the desirability of a socialist economy. Portugal's economic situation after its transition to democracy, obliged the government to pursue International Monetary Fund (IMF)-monitored stabilization programs in 1977–78 and 1983–85.

European integration[link]

The Treaty of Lisbon was signed by the European Union member states on 13 December 2007 in the Jerónimos Monastery, Lisbon.

In 1986, Portugal joined the European Economic Community (EEC) that later became the European Union (EU). In the following years Portugal's economy progressed considerably as result of EEC/EU structural and cohesion funds and Portuguese companies' easier access to foreign markets. Portugal's last overseas territory, Macau, was not handed over to the People's Republic of China (PRC) until 1999, under the 1987 joint declaration that set the terms for Macau's handover from Portugal to the PRC. In 2002, the independence of East Timor (Asia) was formally recognized by Portugal, after an incomplete decolonization process that was started in 1975 because of the Carnation Revolution.

On 26 March 1995, Portugal started to implement Schengen Area rules, eliminating border controls with other Schengen members while simultaneously strengthening border controls with non-member states. In 1996 the country was a co-founder of the Community of Portuguese Language Countries (CPLP) headquartered in Lisbon. Expo '98 took place in Portugal and in 1999 it was one of the founding countries of the euro and the Eurozone.

On 5 July 2004, José Manuel Barroso, then Prime Minister of Portugal, was nominated President of the European Commission, the most powerful office in the European Union. On 1 December 2009, the Treaty of Lisbon entered into force, after had been signed by the European Union member states on 13 December 2007 in the Jerónimos Monastery, in Lisbon, enhancing the efficiency and democratic legitimacy of the Union and improving the coherence of its action.

Economic disruption in the wake of the late-2000s financial crisis led the country to negotiate in 2011 with the IMF and the European Union, through the European Financial Stability Mechanism (EFSM) and the European Financial Stability Facility (EFSF), a loan to help the country stabilise its finances.

Geography[link]

Mount Pico, the highest peak in Portugal, on the volcanic island of Pico in the Azores.

The blue-green lakes of the Lagoa das Sete Cidades within the Sete Cidades Massif on the island of São Miguel, Azores.

The territory of Portugal includes an area in the Iberian Peninsula (referred to as the continent by most Portuguese) and two archipelagos in the Atlantic Ocean: the archipelagos of Madeira and the Azores. It lies between latitudes 32° and 43° N, and longitudes 32° and 6° W.

Mainland Portugal is split by its main river, the Tagus that flows from Spain and disgorges in Tagus Estuary, near Lisbon, before escaping into the Atlantic. The northern landscape is mountainous towards the interior with several plateaus indented by river valleys, whereas the south, that includes the Algarve and the Alentejo regions, is characterized by rolling plains.

Portugal's highest peak is the similarly named Mount Pico on the island of Pico in the Azores. This ancient volcano, which measures 2,351 m (7,713 ft) is a highly iconic symbol of the Azores, while the Serra da Estrela on the mainland (the summit being 1,991 m (6,532 ft) above sea level) is an important seasonal attraction for skiers and winter sports enthusiasts.

The archipelagos of Madeira and the Azores are scattered within the Atlantic Ocean: the Azores straddling the Mid-Atlantic Ridge on a tectonic triple junction, and Madeira along a range formed by in-plate hotspot geology (much like the Hawaiian Islands). Geologically, these islands were formed by volcanic and seismic events, although the last terrestrial volcanic eruption occurred in 1957–58 (Capelinhos) and minor earthquakes occur sporadically, usually of low intensity.

Portugal's Exclusive Economic Zone, a sea zone over which the Portuguese have special rights over the exploration and use of marine resources, has 1,727,408 km². This is the 3rd largest Exclusive Economic Zone of the European Union and the 11th largest in the world.

Climate[link]

Cork oak tree in a wheat field, an iconic image of the Alentejo.

Praia Dona Ana in Lagos, a coastal beach typical of the Algarve.

A view of Serra da Estrela, the highest range on the mainland.

The terraced hills of the wine-making region of the Douro Valley.

Portugal is defined as a Mediterranean climate (Csa in the south, interior, and Douro region; Csb in the north, centre and coastal Alentejo; and also Semi-arid climate or Steppe climate (Bsk in certain parts of Beja district) according to the Koppen-Geiger Climate Classification), and is one of the warmest European countries: the annual average temperature in mainland Portugal varies from 12 °C (53.6 °F) in the mountainous interior north to over 18 °C (64.4 °F) in the south and on the Guadiana river basin. The Algarve, separated from the Alentejo region by mountains reaching up to 900 metres in Pico da Foia, has a climate similar to that of the southern coastal areas of Spain or Southern California.

Annual average rainfall in the mainland varies from just over 3,000 mm (118.1 in) in the northern mountains to less than 300 mm (11.8 in) in the area of the Massueime River, near Côa, along the Douro river. Mount Pico is recognized as receiving the largest annual rainfall (over 6,250 mm (246.1 in) per year) in Portugal, according to Instituto de Meteorologia (English: Portuguese Meteorological Institute).^[24]

In some areas, such as the Guadiana basin, annual average temperatures can be as high as 20 °C (68 °F), but summer highest temperatures may be over 45 °C (113 °F) .^[25] The record high of 47.4 °C (117.3 °F) was recorded in Amareleja, although this might not be the hottest spot in summer, according to satellite readings.^[26]

Snowfalls occur regularly in the interior North and Center of the country in particular in the districts of Vila Real, Bragança, Viseu and Guarda. In winter temperatures may drop below −10 °C (14.0 °F) in particular in Serra da Estrela, Serra do Gerês and Serra de Montesinho. In these places snow can fall any time from October to May. In the south of the country snowfalls are rare but still occur in the highest elevations.

The country has around 2500 to 3200 hours of sunshine a year, an average of 4–6 h in winter and 10–12 h in the summer, with higher values in the southeast and lower in the northwest.

The sea surface temperature on the west coast of mainland Portugal varies from 13 °C (55.4 °F)-15 °C (59.0 °F) in winter to 18 °C (64.4 °F)-20 °C (68.0 °F) in the summer while on the south coast it ranges from 15 °C (59.0 °F) in Winter and rises in the summer to about 23 °C (73.4 °F) occasionally reaching 26 °C (78.8 °F).

Both the archipelagos of the Azores and Madeira have a subtropical climate, although variations between islands exist, making weather predictions very difficult (owing to rough topography). The Madeira and Azorean archipelagos have a narrower temperature range, with annual average temperatures exceeding 20 °C (68 °F) along the coast (according to the Portuguese Meteorological Institute). Some islands in Azores do have drier months in the summer. Consequently, the island of the Azores have been identified as having a Mediterranean climate (both Csa and Csb types), while some islands (such as Flores or Corvo) are classified as Maritime Temperate (Cfb) or Humid subtropical (Cfa), respectively, according to Koppen-Geiger classification. Porto Santo island in Madeira has a semi-arid Steppe climate (BSh). The Savage Islands, which are part of the regional territory of Madeira are unique in being classified as a Desert climates (BWh) with an annual average rainfall of approximately 150 mm (5.9 in). The sea surface temperature in the archipelagos varies from 17 °C (62.6 °F)-18 °C (64.4 °F) in winter to 24 °C (75.2 °F)-25 °C (77.0 °F) in the summer occasionally reaching 26 °C (78.8 °F).

In the southern Azores, and still within the Portuguese maritime territory, there is a unique area of tropical climate (as defined by Koppen-Geiger) influenced by Gulf Stream where sea surface temperatures are over 20 °C (68 °F) even during the winter (Source AEMET).

Biodiversity[link]

Owing to humans occupying the territory of Portugal for thousands of years, little is left of the original vegetation. Protected areas of Portugal include one national park (Portuguese: Parque Nacional), 12 natural parks (Portuguese: Parque Natural), nine natural reserves (Portuguese: Reserva Natural), five natural monuments (Portuguese: Monumento Natural), and seven protected landscapes (Portuguese: Paisagem Protegida), which include the Parque Nacional da Peneda-Gerês, the Parque Natural da Serra da Estrela and the Paul de Arzila. These natural environments are shaped by diverse flora, and include widespread species of pine (especially the Pinus pinaster and Pinus pinea species), the chestnut (Castanea sativa), the cork-oak (Quercus suber), the holm oak (Quercus ilex), the Portuguese oak (Quercus faginea), and eucalyptus (Eucalyptus globulus). All are prized for their economic value. Laurisilva is a unique type of subtropical rainforest found in few areas of Europe and the world: in the Azores, and in particular on the island of Madeira, there are large forests of endemic Laurasilva forests (the latter protected as a natural heritage preserve).

There are several species of diverse mammalian fauna, including the fox, badger, Iberian lynx, Iberian Wolf, wild goat (Capra pyrenaica), wild cat (Felis silvestris), hare, weasel, polecat, chameleon, mongoose, civet, brown bear^{[citation needed]} (spotted near Rio Minho, close to Peneda-Gerês) and many others. Portugal is an important stopover for migratory birds, in places such as Cape St. Vincent or the Monchique mountain, where thousands of birds cross from Europe to Africa during the autumn or in the spring (return migration). Most of the avian species congregate along the Iberian Peninsula since it is the closest stopover between northern Europe and Africa. Six hundred bird species make their nests in Portugal (either permanently or during the course of migration), and annually there are new registries of nesting species. The archipelagos of the Azores and Madeira are transient stopover for American, European, and African birds, while continental Portugal mostly encounters European and African bird species.

There are over 100 varieties of freshwater fish species, varying from the giant European catfish (in the Tagus International Natural Park) to some small and endemic species that live only in small lakes (along the western lakes for example). Some of these rare and specific species are highly endangered because of habitat loss, pollution and drought. Upwelling along the west coast of Portugal makes the sea extremely rich in nutrients and diverse species of marine fish; the Portuguese marine waters are one of the richest in the world. Marine fish species are more common, and include thousands of species, such as the sardine (Sardina pilchardus), tuna and Atlantic mackerel. Bioluminescent species are also well-represented (including species in different colour spectrum and forms), like the glowing plankton that are possible to observe in some beaches.

There are many endemic insect species, most only found in certain parts of Portugal, while other species are more widespread like the stag beetle (Lucanus cervus) and the cicada. The Macronesian islands (Azores and Madeira) have many endemic species (like birds, reptiles, bats, insects, snails and slugs) that evolved independent from other regions of Portugal. In Madeira, for example, it is possible to observe more than 250 species of land gastropods.

Government[link]

Aníbal Cavaco Silva is the current President of Portugal.

Pedro Passos Coelho is the current Prime Minister.

Portugal has been a democratic republic since the ratification of the Constitution of 1976, with Lisbon, the nation's largest city, as its capital. The constitution grants the division, or separation, of powers among legislative, executive, and judicial branches. The four main institutions as described in this constitution are the President of the Republic, the Parliament, known as the Assembleia da República (English: Assembly of the Republic), the Government, headed by a Prime Minister, and the courts.

The President, who is elected to a five-year term, has a supervisory non-executive role: the current President is Aníbal Cavaco Silva. The Parliament is a chamber composed of 230 deputies elected for a four-year term. The government, whose head is the Prime Minister (currently Pedro Passos Coelho), chooses a Council of Ministers, that comprises the Ministers and State Secretaries. The courts are organized into several levels: judicial, administrative, and fiscal branches. The Supreme Courts are institutions of last resort/appeal. A thirteen-member Constitutional Court oversees the constitutionality of the laws.

Portugal operates a multi-party system of competitive legislatures/local administrative governments at the national-, regional- and local-levels. The Legislative Assembly, Regional Assemblies and local municipalities and/or parishes, are dominated by two political parties, the Socialist Party and the Social Democratic Party, in addition to the Unitarian Democratic Coalition (Portuguese Communist Party plus Ecologist Party "The Greens"), the Left Bloc and the Democratic and Social Centre – People's Party, which garner between 5 and 15% of the vote regularly.

Executive branch[link]

The President, elected to a five-year term by direct, universal suffrage, is also Commander-in-Chief of the Armed Forces. Presidential powers include the appointment of the Prime Minister and Council of Ministers (where the President is obligated by the results from Legislative Elections); dismissing the Prime Minister; dissolving the Assembly (to call early elections); vetoing legislation (which may be overridden by the Assembly); and declaring a State of War or siege.

The President is advised on issues of importance by the Council of State, which is composed of six senior civilian officers, any former Presidents elected under the 1976 Constitution, five-members chosen by the Assembly, and five selected by the president.

The Government is headed by the presidentially-appointed Prime Minister, who names a Council of Ministers to act as the government and cabinet. Each government is required to define the broad outline of its policies in a program, and present it to the Assembly for a mandatory period of debate. The failure of the Assembly to reject the program by a majority of deputies confirms the government in office.

Legislative branch[link]

The Assembly of the Republic is a unicameral body composed of up to 230 deputies. Elected by universal suffrage according to a system of proportional representation, deputies serve four-year terms of office, unless the President dissolves the Assembly and calls for new elections.

Law and criminal justice[link]

The Portuguese legal system is part of the civil law legal system, also called the continental family legal system. Until the end of the 19th century, French law was the main influence. Since then, the major influence has been German law. The main laws include the Constitution (1976, as amended), the Civil Code (1966, as amended) and the Penal Code (1982, as amended). Other relevant laws are the Commercial Code (1888, as amended) and the Civil Procedure Code (1961, as amended).

Portuguese law applied in the former colonies and territories and continues to be the major influence for those countries. Portugal's main police organizations are the Guarda Nacional Republicana – GNR (National Republican Guard), a gendarmerie; the Polícia de Segurança Pública – PSP (Public Security Police), a civilian police force who work in urban areas; and the Polícia Judiciária – PJ (Judicial Police), a highly specialized criminal investigation police that is overseen by the Public Ministry.

Portugal was one of the first countries in the world to abolish the death penalty. Maximum jail sentences are limited to 25 years.

Portugal has arguably the most liberal laws concerning possession of illicit drugs in the Western world. In 2001 Portugal decriminalized possession of effectively all drugs that are still illegal in other developed nations including, but not limited to, marijuana, cocaine, heroin, and LSD. While possession is legal, trafficking and possession of more than "10 days worth of personal use" are still punishable by jail time and fines. People caught with small amounts of any drug are given the choice to go to a rehab facility, and may refuse treatment without consequences. Despite criticism from other European nations, who stated Portugal's drug consumption would tremendously increase, overall drug use rose only slightly, whilst use among teenagers dropped, along with the number of HIV infection cases, which had dropped 50% by 2009.^[27][28]

On 31 May 2010, Portugal became the sixth country in Europe and the eighth country in the world to legally recognize same-sex marriage on the national level. The law came into force on 5 June 2010.^[29]

Administrative divisions[link]

Administratively, Portugal is divided into 308 municipalities (Portuguese: municípios or concelhos), which are subdivided into 4260 civil parishes (Portuguese: freguesia). Operationally, the municipality and civil parish, along with the national government, are the only legally identifiable local administrative units identified by the government of Portugal (for example, cities, towns or villages have no standing in law, although may be used as catchment for the defining services). For statistical purposes the Portuguese government also identifies NUTS, inter-municipal communities and informally, the district system, used until European integration (and being phased-out by the national government). Continental Portugal is agglomerated into 18 districts, while the archipelagos of the Azores and Madeira are governed as autonomous regions; the largest units, established since 1976, are either mainland Portugal (Portuguese: Portugal Continental) and the autonomous regions of Portugal (Azores and Madeira).

The 18 districts of mainland Portugal are: Aveiro, Beja, Braga, Bragança, Castelo Branco, Coimbra, Évora, Faro, Guarda, Leiria, Lisbon, Portalegre, Porto, Santarém, Setúbal, Viana do Castelo, Vila Real and Viseu – each district takes the name of the district capital.

Within the European Union NUTS (Nomenclature of Territorial Units for Statistics) system, Portugal is divided into seven regions: the Azores, Alentejo, Algarve, Centro, Lisboa, Madeira and Norte, and with the exception of the Azores and Madeira, these NUTS areas are subdivided into 28 subregions.

Districts[30]
	District	Area	Population			District	Area	Population
1	Lisbon	2,761 km2 (1,066 sq mi)	2,250,382		10	Guarda	5,518 km2 (2,131 sq mi)	160,925
2	Leiria	3,517 km2 (1,358 sq mi)	470,895		11	Coimbra	3,947 km2 (1,524 sq mi)	429,987
3	Santarém	6,747 km2 (2,605 sq mi)	453,633		12	Aveiro	2,808 km2 (1,084 sq mi)	714,218
4	Setúbal	5,064 km2 (1,955 sq mi)	851,232		13	Viseu	5,007 km2 (1,933 sq mi)	377,629
5	Beja	10,225 km2 (3,948 sq mi)	152,728		14	Bragança	6,608 km2 (2,551 sq mi)	136,252
6	Faro	4,960 km2 (1,915 sq mi)	451,005		15	Vila Real	4,328 km2 (1,671 sq mi)	206,661
7	Évora	7,393 km2 (2,854 sq mi)	166,706		16	Porto	2,395 km2 (925 sq mi)	1,817,119
8	Portalegre	6,065 km2 (2,342 sq mi)	118,448		17	Braga	2,673 km2 (1,032 sq mi)	848,165
9	Castelo Branco	6,675 km2 (2,577 sq mi)	196,262		18	Viana do Castelo	2,255 km2 (871 sq mi)	244,826

Foreign relations[link]

The disputed territory of Olivença

A member state of the United Nations since 1955, Portugal is also a founding member of NATO (1949), OECD (1961) and EFTA (1960); it left the latter in 1986 to join the European Economic Community, that would become the European Union in 1993. In 1996 it co-founded the Community of Portuguese Language Countries (CPLP), which seeks to foster closer economic and cultural ties between the world's Lusophone nations.

In addition, Portugal is a full member of the Latin Union (1983) and the Organization of Ibero-American States (1949). It has a friendship alliance and dual citizenship treaty with its former colony, Brazil. Portugal and England (subsequently, the United Kingdom of Great Britain and Northern Ireland) share the world's oldest active military accord through their Anglo-Portuguese Alliance (Treaty of Windsor), which was signed in 1373.

The only international dispute concerns the municipality of Olivença (Olivenza). Under Portuguese sovereignty since 1297, the municipality of Olivenza was ceded to Spain under the Treaty of Badajoz in 1801, after the War of the Oranges. Portugal claimed it back in 1815 under the Treaty of Vienna. However, since the 19th century, it has been continuously and peacefully ruled by Spain which considers the territory not only de facto but also de jure as an integral part of Spain.

Military[link]

Branches of the Portuguese Armed Forces

Portuguese Army Chaimite V-200

Portuguese Navy MEKO-200 PN

Portuguese Air Force F-16 Fighting Falcon

The armed forces have three branches: Navy, Army and Air Force. They serve primarily as a self-defense force whose mission is to protect the territorial integrity of the country and provide humanitarian assistance and security at home and abroad. As of 2008, the three branches numbered 39,200 active personnel including 7,500 women. Portuguese military expenditure in 2009 was $5.2 billion, representing 2.1 percent of GDP. Military conscription was abolished in 2004. The minimum age for voluntary recruitment is 18 years.

The Army (21,000 personnel) comprises three brigades and other small units. An infantry brigade (mainly equipped with Pandur II APC), a mechanized brigade (mainly equipped with Leopard 2 A6 tanks and M113 APC) and a Rapid Reaction Brigade (consisting of paratroopers, commandos and rangers). The Navy (10,700 personnel, of which 1,580 are marines) has five frigates, two submarines, and 28 patrol and auxiliary vessels. The Air Force (7,500 personnel) has the Lockheed F-16 Fighting Falcon and the Dassault/Dornier Alpha Jet as the main combat aircraft.

In addition to the three branches of the armed forces, there is the National Republican Guard, a security force subject to military law and organization (gendarmerie) comprising 25,000 personnel. This force is under the authority of both the Defense and the Interior Ministry. It has provided detachments for participation in international operations in Iraq and East Timor.

The United States maintains a military presence with 770 troops in the Lajes Air Base at Terceira Island, in the Azores. The Allied Joint Force Command Lisbon (JFC Lisbon) – one of the three main subdivisions of NATO's Allied Command Operations – it is based in Oeiras, near Lisbon.

In the 20th century, Portugal engaged in two major military interventions: World War I and the Portuguese Colonial War (1961–1974). After the end of the Portuguese Empire in 1975, the Portuguese Armed Forces have participated in peacekeeping missions in East Timor, Bosnia, Kosovo, Afghanistan, Somalia, Iraq (Nasiriyah) and Lebanon. Portugal also conducted several independent unilateral military operations abroad, as were the cases of the interventions of the Portuguese Armed Forces in Angola in 1992 and in Guinea-Bissau in 1998 with the main objectives of protecting and withdrawing of Portuguese and foreign citizens threatened by local civil conflicts.

Economy[link]

The municipality of Maia, in Porto Metropolitan Area, is among the most industrialized places in Portugal. Sonae, Portugal's largest private employer, was founded in Maia and has its headquarters there.

Since the Carnation Revolution (1974) which culminated with the end of one of its most notable phases of economic expansion (that started in the 1960s),^[31] there has been a significant change in annual economic growth. After the turmoil of the 1974 revolution and the PREC period, Portugal has been trying to adapt itself to a changing modern global economy. Since the 1990s, Portugal's economic development model has been slowly changing from one based on public consumption to one focused on exports, private investment, and development of the high-tech sector. Business services have overtaken more traditional industries such as textiles, clothing, footwear, cork (of which Portugal is the world's leading producer),^[32] wood products and beverages.^[33]

Most industry, business and finance are concentrated in Lisbon and Porto metropolitan areas. The districts of Aveiro, Braga, Coimbra, and Leiria are the biggest economic centres outside those two main metropolitan areas.

The Portuguese currency is the euro (€) and the country's economy is in the Eurozone since its starting. Portugal's central bank is the Banco de Portugal, which is an integral part of the European System of Central Banks.

Sectors[link]

Primary sector[link]

Most of Portugal's farms have a small area devoted to a diversified intensive farming, like these in the Oeste subregion.

Agriculture in Portugal is based on small to medium-sized family-owned dispersed units. However, the sector also includes larger scale intensive farming export-oriented agrobusinesses backed by companies (like Grupo RAR's Vitacress, Sovena, Lactogal, Vale da Rosa, Companhia das Lezírias and Valouro). The country produces a wide variety of crops and livestock products, including green vegetables, rice, corn, barley, olives, oilseeds, nuts, cherries, bilberry, table grapes, edible mushrooms, dairy products, poultry and beef. Forestry has also played an important economic role among the rural communities and industry (namely paper industry that includes Portucel Soporcel Group, engineered wood that includes Sonae Indústria, and furniture that includes several manufacturing plants in and around Paços de Ferreira, the core of Portugal's major industrial operations of IKEA). In 2001, the gross agricultural product accounted for 4% of the national GDP.

Traditionally a sea-power, Portugal has had a strong tradition in the Portuguese fishing sector and is one of the countries with the highest fish consumption per capita.^[34] The main landing sites in Portugal (including Azores and Madeira), according to total landings in weight by year, are the harbours of Matosinhos, Peniche, Olhão, Sesimbra, Figueira da Foz, Sines, Portimão and Madeira. Portuguese processed fish products are exported through several companies under a number of different brands like Conservas Ramirez, the World’s oldest canned fish producer still in operation, as well as Conservas Nero, Combate, Comur, General, Líder, Manná, Murtosa, Pescador, Pitéu, Tenório, Torreira, Vasco da Gama, etc.

Portugal is a significant European minerals producer and is ranked among Europe's leading copper producers. It is also a noted producer of tin, tungsten and uranium. However, the country lacks hydrocarbon exploration potential, as well as iron, aluminium and coal deposits, a feature that has hindered its mining and metallurgy sector's development. The Panasqueira and Neves-Corvo mines are among the most noted Portuguese mines in operation.

Secondary sector[link]

Industry is diversified, ranging from automobile (Volkswagen Autoeuropa, Peugeot Citroen), aerospace (Embraer), electronics and textiles, to food, chemicals, cement and wood pulp. Volkswagen Group's AutoEuropa motor vehicle assembly plant in Palmela is among the largest foreign direct investment projects in Portugal.

Modern non-traditional technology-based industries like aerospace, biotechnology and information technology, have been developed in several locations across the country. Alverca, Covilhã,^[35] Évora,^[36] and Ponte de Sor are the main centres of Portuguese aerospace industry, which is led by Brazil-based company Embraer and the Portuguese company OGMA. Since after the turn of the 21st century, many major biotechnology and information technology industries have been founded and are concentrated in the metropolitan areas of Lisbon, Porto, Braga, Coimbra and Aveiro.

Tertiary sector[link]

Marina beach in Vilamoura, Algarve.

A TAP Portugal Airbus A320-200 at Frankfurt Airport. (2011)

Oeiras Municipality, in Lisbon Metropolitan Area, is home of many of the headquarters of multinational companies operating in Portugal.

Parque das Nações, one of Lisbon's financial centres.

Thermal Power Plant in Carregado, near Lisbon.

Travel and tourism continues to become extremely important for Portugal, with visitor numbers forecast to increase significantly over the next years. However, there is increasing competition from Eastern European destinations such as Croatia who offer similar attractions, which are often cheaper. Consequently, the country is almost obligated to focus on its niche attractions such as health, nature and rural tourism in order to stay ahead of its competitors.^[37]

The banking and insurance sectors performed well until the late-2000s financial crisis, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting risks, both the life and non-life sectors, overall, are estimated to be able to withstand a number of severe shocks, even though the impact on individual insurers varies widely.^[38]

State-owned companies[link]

Major State-owned companies include Águas de Portugal (water), ANA (airports), Caixa Geral de Depósitos (banking), Comboios de Portugal (railways), Companhia das Lezírias (agriculture), CTT (postal services), RTP (media) and TAP Portugal (airline). Some of the former are managed by state-run holding company Parpública, which is a shareholder of several companies, both public and private.

Listed companies[link]

Companies listed on Euronext Lisbon stock exchange like EDP, Cimpor, Corticeira Amorim, Galp, Jerónimo Martins, Millennium bcp, Portucel Soporcel, Portugal Telecom and Sonae, are among the largest corporations of Portugal by number of employees, net income or international market share. The Euronext Lisbon is the major stock exchange of Portugal and is part of the NYSE Euronext, the first global stock exchange. The PSI-20 is Portugal's most selective and widely known stock index.

Performance[link]

The Global Competitiveness Report for 2005, published by the World Economic Forum, placed Portugal's competitiveness in the 22nd position, but the 2008–2009 edition placed Portugal in the 43rd position out of 134 countries and territories.^[39] Research about quality of life by the Economist Intelligence Unit's quality of life survey placed Portugal as the country with the 19th-best quality of life in the world for 2005, ahead of other economically and technologically advanced countries like France, Germany, the United Kingdom and South Korea, but 9 places behind its only neighbour, Spain.^[40] This is despite the fact that Portugal remains the country with the lowest per capita GDP in Western Europe.^[41]

The poor performance of the Portuguese economy was explored in April 2007 by The Economist, which described Portugal as "a new sick man of Europe".^[42] From 2002 to 2007, the unemployment rate increased by 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).^[43] By early December 2009, unemployment had reached 10.2% – a 23-year record high. In December 2009, ratings agency Standard and Poor's lowered its long-term credit assessment of Portugal to "negative" from "stable," voicing pessimism on the country's structural weaknesses in the economy and weak competitiveness that would hamper growth and the capacity to strengthen its public finances and reduce debt.^[44] In July 2011, ratings agency Moody's downgraded its long-term credit assessment of Portugal after warning of deteriorating risk of default in March 2011.^[45]

Corruption has become an issue of major political and economic significance for the country. Some cases are well known and were widely reported in the media, such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power.^[46][47] Nevertheless the Transparency International report for 2010 places Portugal in 31st position in terms of perceived corruption, just below Israel and Spain, and 34 positions above Italy.^[48]

A report published in January 2011 by the Diário de Notícias, a leading Portuguese newspaper, demonstrated that in the period between the Carnation Revolution in 1974 and 2010, the democratic Portuguese Republic governments encouraged over expenditure and investment bubbles through unclear public-private partnerships. This funded numerous ineffective and unnecessary external consultancy and advising committees and firms, allowed considerable slippage in state-managed public works, inflated top management and head officers' bonuses and wages, causing a persistent and lasting recruitment policy that boosted the number of redundant public servants. The economy was also damaged by risky credit, public debt creation and mismanaged European structural and cohesion funds for almost four decades. Apparently, the Prime Minister Sócrates's cabinet was not able to forecast or prevent any of this when symptoms first appeared in 2005, and in 2011 the country was on the verge of bankruptcy.^[49]

If analysed under a wider time span, the convergence of the Portuguese economy to EU levels has been impressive, especially from 1986 to the early 2000s (decade).^[50][51] According to Barry (2003), "what appears to have been crucial in the Portuguese case, relative to Spain at least, is the degree of labour-market flexibility that the economy exhibits. (...) Thus Portuguese convergence has been impressive, even though, consistent with its relatively low human-capital stock, the economy has specialised in low-tech production."^[51]

On April 6, 2011 Prime Minister José Sócrates announced on national television that the country would request financial assistance from the IMF and the European Financial Stability Facility, like Greece and the Republic of Ireland had done before. It was the third time that external financial aid was requested to the IMF – the first was in the late 1970s following the Carnation Revolution.

In October 2011, Moody's Analytics downgraded nine Portuguese banks, blaming financial weakness.^[52]

Labour market[link]

Although a developed country and a high income country, Portugal has the lowest GDP per capita in Western Europe and its population has one of the lowest incomes per head among member states of the European Union. According to Eurostat, in 2009, Portugal's GDP per capita stood at 80% of the EU27 average,^[53] the 10th lowest in the Union.

The average wage in Portugal is 1,039 € per month (net),^[54] and the minimum wage, which is regulated/ref by law, is €485 per month. Officially, in 2008 the unemployment rate decreased to 7.3% in the second quarter of 2008.^[55] However, it immediately rose again to higher rates. Influenced by events worldwide, by December 2009, unemployment had surpassed the 10% mark nationwide, by 2010, it was about 11%, and in 2011 it was above 12%. As of March 2012, the unemployment rate is at 14.8%.

Tourism[link]

The Pena National Palace in Sintra is a World Heritage Site and one of Portugal's most visited landmarks

Portugal is among the 20 most visited countries in the world, receiving an average of 13 million foreign tourists each year.^[56] Tourism is playing an increasingly important role in Portugal's economy, contributing to about 5% of its Gross Domestic Product (GDP).^{[citation needed]}

Tourist hotspots in Portugal are Lisbon, Algarve and Madeira, but the Portuguese government continues to promote and develop new tourist destinations, such as the Douro Valley, the island of Porto Santo, and Alentejo. Lisbon is, after Barcelona, the European city which attracts the most tourists (with seven million tourists occupying the city's hotels in 2006, a number that grew 11.8% compared to previous year).^[57] Lisbon in recent years surpassed the Algarve as the leading tourist region in Portugal. Porto and Northern Portugal, especially the urban areas north of Douro River valley, was the tourist destination which grew most (11.9%) in 2006, surpassing Madeira (in 2010), as the third most visited destination.^{[citation needed]}

Almourol Castle, a Knights Templar stronghold used during the Christian Reconquista of Iberia from the Muslim Moors

Most tourists in Portugal are British-, Spanish- or German-origin visitors, travel by low cost airliners, and not only seek sun and beaches, but increasingly search for cultural, gastronomic, environmental or nautical experiences (or travel for reasons of business).^{[citation needed]}

Tourist regions[link]

The main tourist regions can be broken-down into (by order of importance): the Greater Lisbon (Portuguese: Lisboa), the Algarve, Greater Porto and Northern Portugal (Portuguese: Porto and Norte), the Portuguese Islands (Portuguese: Ilhas Portuguesas: Madeira and Azores), and Alentejo. Other tourist regions include Douro Sul, Templários, Dão-Lafões, Costa do Sol, Costa Azul, Planície Dourada, that are unknown to many tourists or visitors.^{[citation needed]}

Most of these regions are grouped in tourism reference areas, which continue to be in a state of reorganization and evolution, some based on the traditional regions of Portugal: the Costa Verde (Green Coast); Costa da Prata (Silver Coast)); Costa de Lisboa (Lisbon Coast); Montanhas (Mountains); Planícies (Plains); Algarve; and the islands of the archipelagos of Madeira and the Azores.^{[citation needed]}

Transport[link]

Porto Metro light rail.

By the early 1970s Portugal's fast economic growth with increasing consumption and purchase of new automobiles set the priority for improvements in transportation. Again in the 1990s, after joining the European Economic Community, the country built many new motorways. Today, the country has a 68,732 km (42,708 mi) road network, of which almost 3,000 km (1,864 mi) are part of system of 44 motorways. Opened in 1944, the first motorway (which linked Lisbon to the National Stadium) was an innovative project that made Portugal among one of the first countries in the world to establish a motorway (this roadway eventually became the Lisbon-Cascais highway, or A5). But, although a few other tracts were created (around 1960 and 1970), it was only after the beginning of the 1980s that large-scale motorway construction was implemented. In 1972, Brisa, the highway concessionaire, was founded to handle the management of many of the regions motorways. On many highways, toll needs to be paid, see Via Verde.

Vasco da Gama Bridge, over the Tagus River, is the longest bridge in Europe.^[58][59]

Vasco da Gama bridge is the longest bridge in Europe.^[60][61]

Continental Portugal's 89,015 km² (34,369 sq mi) territory is serviced by three international airports located near the principal cities of Lisbon, Porto, Faro and Beja. Lisbon's geographical position makes it a stopover for many foreign airlines at several airports within the country. The primary flag-carrier is TAP Portugal, although many other domestic airlines provide services within and without the country. The government decided to build a new airport outside Lisbon, in Alcochete, to replace Lisbon Portela Airport. Currently, the most important airports are in Lisbon, Porto, Faro, Funchal (Madeira), and Ponta Delgada (Azores), managed by the national airport authority group ANA – Aeroportos de Portugal.

25 April Bridge across the Tagus River.

A national railway system that extends throughout the continent and into Spain, is supported and administered by Comboios de Portugal. Rail transport of passengers and goods is derived using the 2,791 km (1,734 mi) of railway lines currently in service, of which 1,430 km (889 mi) are electrified and about 900 km (559 mi) allow train speeds greater than 120 km/h (75 mph). The railway network is managed by the REFER while the transport of passengers and goods are the responsibility of Caminhos de Ferro Portugueses (CP), both public companies. In 2006 the CP carried 133 million passengers and 9,750,000 t (9,600,000 long tons; 10,700,000 short tons) of goods.

The major seaports are located in Leixões, Aveiro, Figueira da Foz, Lisbon, Setúbal, Sines and Faro.

The two largest metropolitan areas have subway systems: Lisbon Metro and Metro Sul do Tejo in the Lisbon Metropolitan Area and Porto Metro in the Porto Metropolitan Area, each with more than 35 km (22 mi) of lines. In Portugal, Lisbon tram services have been supplied by the Companhia de Carris de Ferro de Lisboa (Carris), for over a century. In Porto, a tram network, of which only a tourist line on the shores of the Douro remain, began construction on 12 September 1895 (a first for the Iberian Peninsula). All major cities and towns have their own local urban transport network, as well as taxi services.

Science and technology[link]

The headquarters (rectorate) of the University of Porto (UP) – UP is the largest Portuguese university by both number of students and research output.

Scientific and technological research activities in Portugal are mainly conducted within a network of R&D units belonging to public universities and state-managed autonomous research institutions like the INETI – Instituto Nacional de Engenharia, Tecnologia e Inovação and the INRB – Instituto Nacional dos Recursos Biológicos. The funding and management of this research system is mainly conducted under the authority of the Ministry of Science, Technology and Higher Education (MCTES) itself and the MCTES's Fundação para a Ciência e Tecnologia (FCT). The largest R&D units of the public universities by volume of research grants and peer-reviewed publications, include biosciences research institutions like the Instituto de Medicina Molecular, the Centre for Neuroscience and Cell Biology, the IPATIMUP, the Instituto de Biologia Molecular e Celular and the Abel Salazar Biomedical Sciences Institute.

António Egas Moniz was a Portuguese neurologist awarded with the Nobel Prize in Physiology or Medicine in 1949.

Among the largest non-state-run research institutions in Portugal are the Instituto Gulbenkian de Ciência and the Champalimaud Foundation, a neuroscience and oncology research centre, which in addition awards every year one of the highest monetary prizes of any science prize in the world. A number of both national and multinational high-tech and industrial companies, are also responsible for research and development projects. One of the oldest learned societies of Portugal is the Sciences Academy of Lisbon, founded in 1779.

Iberian bilateral state-supported research efforts include the International Iberian Nanotechnology Laboratory and the Ibercivis distributed computing platform, which are joint research programmes of both Portugal and Spain. Portugal is a member of several pan-European scientific organizations. These include the European Space Agency (ESA), the European Laboratory for Particle Physics (CERN), ITER, and the European Southern Observatory (ESO).

The Lisbon Oceanarium – by the time of its opening, it was among the largest aquariums in the world.

Portugal has the largest aquarium in Europe, the Lisbon Oceanarium, and the Portuguese have several other notable organizations focused on science-related exhibits and divulgation, like the state agency Ciência Viva, a programme of the Portuguese Ministry of Science and Technology to the promotion of a scientific and technological culture among the Portuguese population,^[62] the Science Museum of the University of Coimbra, the National Museum of Natural History at the University of Lisbon, and the Visionarium.

With the emergence and growth of several science parks throughout the world that helped create many thousands of scientific, technological and knowledge-based businesses, Portugal started to develop several^[63] science parks across the country. These include the Taguspark (in Oeiras), the Coimbra iParque (in Coimbra), the biocant (in Cantanhede), the Madeira Tecnopolo^[64] (in Funchal), Sines Tecnopolo^[65] (in Sines), Tecmaia^[66] (in Maia) and Parkurbis^[67] (in Covilhã). Companies locate in the Portuguese science parks to take advantage of a variety of services ranging from financial and legal advice through to marketing and technological support.

Egas Moniz, a Portuguese physician who developed the cerebral angiography and leucotomy, received in 1949 the Nobel Prize in Physiology or Medicine – he is the first Portuguese recipient of a Nobel Prize and the only in the sciences.

The European Innovation Scoreboard 2011, placed Portugal-based innovation in the 15th position, with an impressive increase in innovation expenditure and output.^[68]

Energy[link]

Alqueva Dam, in the Alentejo; the Alqueva project, an irrigation and hydroelectric power generation system, created the largest artificial lake in Western Europe.

Portugal has considerable resources of wind and river power, the two most cost-effective renewable sources. Since the turn of the 21st century, there has been a trend towards the development of a renewable resource industry and reduction of both consumption and use of fossil fuel resources. In 2006, the world's largest solar power plant at that date, the Moura Photovoltaic Power Station, began operating near Moura, in the south, while the world's first commercial wave power farm, the Aguçadoura Wave Farm, opened in the Norte region (2008). By the end of 2006, 66% of the country's electrical production was from coal and fuel power plants, while 29% were derived from hydroelectric dams, and 6% by wind energy.^[69] In 2008, renewable energy resource methods began to produce 43% of the nation's consumption of electricity, even as hydroelectric production decreased due to severe droughts.^[70] As of June 2010, electricity exports had outnumbered imports. In the period between January and May 2010, 70% of the national production of energy came from renewable sources.^[71]

Portugal’s national energy transmission company, Redes Energéticas Nacionais (REN), uses sophisticated modeling to predict weather, especially wind patterns, and computer programs to calculate energy from the various renewable-energy plants. Before the solar/wind revolution, Portugal had generated electricity from hydropower plants on its rivers for decades. But new programs combine wind and water: wind-driven turbines pump water uphill at night, the most blustery period; then the water flows downhill by day, generating electricity, when consumer demand is highest. Portugal’s distribution system is also now a two-way street. Instead of just delivering electricity, it draws electricity from even the smallest generators, like rooftop solar panels. The government aggressively encouraged such contributions by setting a premium price for those who buy rooftop-generated solar electricity.

Demographics[link]

The Instituto Nacional de Estatística (Portuguese: National Institute of Statistics) estimates that, according to the 2011 census, the population was 10,561,614 (of which 52% was female, 48% was male). This population has been relatively homogeneous for most of its history: a single religion (Catholicism) and a single language have contributed to this ethnic and national unity, namely after the expulsion of the Moors, Moriscos and Sephardi Jews.^[72]

Native Portuguese are an Iberian ethnic group, whose ancestry is very similar to other Western and Southern Europeans and Mediterranean peoples, in particular Spaniards, with whom they share a common ancestry, history and cultural proximity.

The most important demographic influence in the modern Portuguese seems to be the oldest one; current interpretation of Y-chromosome and mtDNA data suggests that the Portuguese have their origin in Paleolithic peoples that began arriving to the European continent around 45,000 years ago. All subsequent migrations did leave an impact, genetically and culturally, but the main population source of the Portuguese is still Paleolithic. Studies of mitochondrial DNA suggest that 7% and 5–9% of modern Portuguese have some North- and Subsaharan-African ancestry, respectively.^[73]

Urbanization[link]

There are two Greater Metropolitan Areas (GAMs): Lisbon and Porto.^[74]

Map of Portugal with the representation of population density (no. of inhabitants / km ²) by municipality.

Immigration[link]

Portugal's colonial history has long since been a cornerstone of its national identity, as has its geographic position at the southwestern corner of Europe, looking out into the Atlantic Ocean. It was the last western colonial European powers to give up its overseas territories (among them Angola and Mozambique in 1975), turning over the administration of Macau to the People's Republic of China at the end of 1999. Consequently, it has both influenced and been influenced by cultures from former colonies or dependencies, resulting in immigration from these former territories for both economic and/or personal reasons. Portugal, long a country of emigration (the vast majority of Brazilians have some Portuguese ancestry),^[77] has now become a country of net immigration,^[78] and not just from the last Indian (Portuguese until 1961), African (Portuguese until 1975), and Far East Asian (Portuguese until 1999) overseas territories. An estimated 800,000 Portuguese returned to Portugal as the country's African possessions gained independence in 1975.^[77] By 2007, Portugal had 10,617,575 inhabitants of whom about 332,137 were legal immigrants.^[1]

Since the 1990s, along with a boom in construction, several new waves of Ukrainian, Brazilian, people from the former Portuguese colonies in Africa and other Africans have settled in the country. Romanians, Moldovans and Chinese have also chosen Portugal as destination. Portugal's Romani population, estimated at about 40,000,^[79] offers another element of ethnic diversity. Most Romanis congregate with similar ethnic groups in the southern parts of the country and sell clothing and handicrafts in rural markets.

In addition, a number of EU citizens, mostly from the United Kingdom, northern European or Nordic countries, have become permanent residents in the country (with the British community being mostly composed of retired pensioners and choosing to live in the Algarve and Madeira).^[80]

Religion[link]

The Sanctuary of Our Lady of Fátima, one of the largest Marian shrines in the world.

According to the CIA World Fact Book, 84.5% of the Portuguese population are Roman Catholic while 2.2% follow other Christian faiths.^[81] Some 9% of the population are self-declared as non-religious (Zuckerman 2005). In addition, the country has small Protestant, Mormon, Muslim, Hindu, Sikh, Christian Orthodox, Jehovah's Witnesses, Baha'i, Buddhist and Jewish communities.

Many Portuguese holidays, festivals and traditions have a Christian origin or connotation. Although relations between the Portuguese state and the Roman Catholic Church were generally amiable and stable since the earliest years of the Portuguese nation, their relative power fluctuated. In the 13th and 14th centuries, the church enjoyed both riches and power stemming from its role in the reconquest, its close identification with early Portuguese nationalism and the foundation of the Portuguese educational system, including the first university. The growth of the Portuguese overseas empire made its missionaries important agents of colonization, with important roles in the education and evangelization of people from all the inhabited continents. The growth of liberal and nascent republican movements during the eras leading to the formation of the First Portuguese Republic (1910–26) changed the role and importance of organized religion.

Portugal is a secular state: church and state were formally separated during the Portuguese First Republic, and later reiterated in the 1976 Portuguese Constitution. Other than the Constitution, the two most important documents relating to religious freedom in Portugal are: the 1940 Concordata (later amended in 1971) between Portugal and the Holy See, and the 2001 Religious Freedom Act.

Languages[link]

Map of the Lusosphere, the Portuguese-speaking world

Portuguese is the official language of Portugal. Portuguese is a Romance language that originated in what is now Galicia (Spain) and Northern Portugal, from the Galician-Portuguese language. It is derived from the Latin spoken by the romanized Pre-Roman peoples of the Iberian Peninsula around 2000 years ago. In the 15th and 16th centuries, it spread worldwide as Portugal established a colonial and commercial empire (1415–1999). In the present day, Portuguese is spoken as a native language on 4 different continents, with Brazil accounting for the largest number of native Portuguese speakers in any country.

As a result, nowadays the Portuguese language is also official and spoken in Brazil, Angola, Mozambique, Cape Verde, São Tomé and Príncipe, Guinea-Bissau, and East Timor. These countries, plus Macau Special Administrative Region (People's Republic of China), make up the Lusosphere, term derived from the ancient Roman province of Lusitania, which currently matches the Portuguese territory south of the Douro river. Mirandese is also recognized as a co-official regional language in some municipalities of northeastern Portugal. It retains fewer than 5,000 speakers in Portugal (a number that can be up to 12,000 if counting second language speakers).^{[citation needed]}