History, Constitutional Government

In April 1976 the constituent assembly approved a new constitution for Portugal. The document committed future governments to democratic principles and socialist policies, including the creation of a “classless society.” The constitution also declared the earlier nationalizations and land appropriations irreversible. In the parliamentary elections in April 1976, the Socialist Party (PS) won a plurality of the vote, and their leader, Mario Soares, became prime minister. The following June General Antonio Ramalho Eanes was elected president of Portugal.

Soares attempted to restore stability to the economy, and in 1977 Portugal applied for membership in the European Community (EC), now the European Union (EU). Soares resigned in late 1977 after failing to win support for an austerity program. After the fall of two successive interim governments, the conservative Democratic Alliance—a coalition of the Social Democratic Party (PSD) and the Social Democratic Center Party (CDS)—won a clear majority in parliamentary elections held in December 1979. The Democratic Alliance backed several important constitutional reforms, including the abolition of the Revolutionary Council, which had retained veto power over legislation and blocked moves toward liberalizing the economy. It also developed plans to denationalize certain industries.

Parliamentary elections in April 1983 brought PS leader Soares back to power as prime minister. Soares’s government, with support from the International Monetary Fund (IMF), introduced an austerity program and conducted negotiations leading toward Portugal’s eventual entry into the EC. The government’s belt-tightening measures proved unpopular, however, and the government collapsed in 1985 amid disagreements over labor and agricultural reforms. Elections in October led to the formation of a minority government under PSD leader Anibal Cavaco Silva. Silva held the post for the next ten years, leading the PSD to parliamentary victories in 1987 and 1991. Soares returned as president following elections in 1986, and he won another term in 1991. The PS and PSD both backed Portugal’s membership in the EC, which it formally joined in 1986, and they cooperated to remove the remaining revolutionary passages from the constitution in 1989. Portugal’s entry in the EC spurred unprecedented economic growth. Silva’s administration continued to privatize industry, backed reforms in agriculture and education, and embraced high levels of foreign investment.

Resistance to the PSD gradually increased, however, despite the government’s promises of continued growth. An economic downturn in the early 1990s further diminished confidence in the government, amid a wave of strikes in support of higher wages, student demonstrations protesting against higher tuition fees, and corruption allegations. In the 1995 general election the PSD lost its majority to the PS, and PS leader Antonio Guterres became prime minister. In 1996 former prime minister Anibal Cavaco Silva ran for president on the PSD ticket and was soundly defeated by PS candidate Jorge Sampaio. Guterres and the PS were returned to power in the general election in 1999, and Sampaio won a second five-year term as president in 2001. However, a slowing economy and a series of policy reversals weakened the PS government. Guterres resigned in December 2001 after the PSD won a sweeping victory in local elections, and a new general election was scheduled in March 2002. The PSD narrowly defeated the PS but failed to capture a majority. The PSD entered a governing alliance with the conservative Popular Party (PP), and PSD leader Jose Manuel Durao Barroso was named prime minister. Barroso campaigned on a pledge to reduce corporate taxes and lower public spending by encouraging private investment in public services.