Portugal

Parliamentary elections in April 1983 brought Soares back into power as prime minister. Soares’s government introduced an austerity programme and conducted negotiations leading towards Portugal’s entry into the European Community (now the European Union). Elections in October 1985 led to the formation of a minority government under a Social Democrat, Aníbal Cavaço Silva. Soares returned as president following elections in 1986; Portugal entered the European Community the same year.

In the 1987 elections the Social Democrats won control of parliament, the first time a single party had held the majority since 1975. President Soares won another five-year term in January 1991, and the Social Democrats held their majority in parliamentary elections in October. In 1992 mass student demonstrations against university entrance examinations resulted in the resignation of the minister of education, public-service employees struck for wage increases, and doctors staged a two-day strike to protest at government plans to privatize some health services.

In foreign affairs, Portugal improved its relations with the government of Spain in the late 1980s. Negotiations with the People’s Republic of China resulted in a 1987 agreement to transfer Macau, Portugal’s overseas territory, to Chinese control (as Macao Special Administrative Region) in December 1999. Beginning in 1988, Portugal played a significant role in the process to restore peace to Angola, a former Portuguese possession, and participated in negotiations for peace in Mozambique. Discussions with Indonesia regarding the former Portuguese territory of East Timor continued, despite setbacks, into 1993.

In October 1995 the Social Democratic government fell in parliamentary elections after a decade in office. The Socialist Party won the largest share of the vote, but did not secure a working majority, and formed a minority government with António Guterres as prime minister. In January 1996 the Socialist Party candidate Jorge Sampaio was elected president, succeeding the incumbent Soares after his retirement in March.

In April 1997 an inquiry was announced, headed by Soares, into Portugal’s gold purchases from Nazi Germany during World War II; Portugal was estimated to be the largest purchaser of Nazi gold after Switzerland. In November 1997 Guterres’s deputy prime minister, António Vitorino, resigned after his tax evasion on a property purchase in 1989 came to light. Local elections in December showed increased support for the socialist government. In February 1998 the government announced unexpectedly good public deficit figures, clearing Portugal for admission to the first wave of European Economic and Monetary Union (EMU) in 1999. In August 1998 Portugal and the new government in Indonesia pledged to reach an agreement on the status of the former Portuguese territory of Timor-Leste (the former East Timor); in December 1999 the two countries resumed diplomatic relations, after 24 years. Earlier that year, Portugal duly entered the single European currency, and in the general election of October 1999, António Guterres was re-elected prime minister. One of the first acts of the new government was to decriminalize the consumption of illegal drugs such as cannabis and heroin. In January 2001 Jorge Sampaio was elected for a second term as president when he defeated Joaquim Ferreira do Amaral.

Portugal was hit by two bus tragedies in March 2001. In the first of these a bridge across the River Douro collapsed, and several vehicles, including a bus, were swept away by the waters, drowning about 70 people; the second disaster, near Santa Comba Dão, about 200 km (120 mi) north of the capital, Lisbon, left 14 dead and more than 20 injured. The government took responsibility for the bridge disaster but was also beset by corruption and economic mismanagement charges. Guterres sacked six ministers in June 2001. He also attempted to introduce the toughest legislation in Europe on drink driving but was forced to abandon the proposals in the face of opposition from the wine-producing lobby. In local elections held in December the Socialist Party fared badly and in a surprise move Guterres tendered his resignation. President Sampaio dissolved parliament and called for a general election for March 2002, 18 months ahead of time.

On January 1, 2002, Portugal adopted the Euro, in place of the escudo, as part of the introduction of the single European currency. Eleven other European nations adopted the Euro at the same time.

Guterres was replaced by Eduardo Ferro Rodrigues as the new leader of the Socialist Party (PS) in January 2002. However, in the general election held in March, ahead of time, he failed to make a significant showing and the Social Democrats won 102 out of 230 seats. Failing to gain sufficient votes to take power, the Social Democrats formed a coalition with the Popular Party—who had won 24 seats. The Social Democrat leader, José Manuel Durão Barroso, became prime minister and pledged to cut corporate taxes, slash public spending, and privatize some public services. Proposed revisions to the country’s labour laws led to general strikes in November and December 2002. In foreign relations Durão Barroso leaned towards the pro-American position of Spain and the UK. In March 2003, shortly before the invasion of Iraq was launched, he hosted a summit meeting in the Azores, attended by the leaders of the coalition, to discuss the crisis. In July 2004 Durão Barroso decided to resign to take up the role of president of the European Commission. As well as resigning the premiership he also stepped down as party leader. A general election was held in February 2005 and was won by the Socialist Party, which took 120 of the 230 seats. The party’s leader José Sócrates was appointed the new prime minister by President Sampaio. After his second consecutive term as president, Sampaio was succeeded by Aníbal Cavaço Silva, the former prime minister (1985-1995). Cavaço won just over 50 per cent of the vote, negating the need to go to an election run-off.