History, Recent Events

The growing political stability of Portugal during the late 20th century greatly contributed to its success in approaching the economic and social development of other EU members. Portugal’s successful qualification for Economic and Monetary Union (EMU) and participation in the EU’s single currency, the euro, which entered use in 1999, is testament to the newfound strength of the Portuguese economy. However, Portugal still faces many challenges in its efforts to fully catch up with its European partners, and the country is working to increase its international competitiveness by modernizing industry and improving the education system.

For many Portuguese the 1998 World’s Fair in Lisbon offered an important symbol of the nation’s domestic revival. The fair attracted millions of visitors and helped reestablish Portugal as an important international tourist destination. Today, the site, rechristened as the Park of Nations, is an important focal point for commercial, administrative, and cultural activities in Lisbon.

In foreign affairs, Portugal has worked to improve its relations with Spain and its former colonies. Portugal’s traditional fear that it would be annexed and subordinated by its larger Iberian neighbor have given way to an enhanced trading relationship; Spain now rivals Germany as one of Portugal’s chief trading partners. Within the EU, Portugal has benefited from presenting a pan-Iberian front with Spain, and EU funds have been allocated to help strengthen socioeconomic development in both countries.

Portugal has also sought to retain a leadership role among its former colonies. Beginning in 1988, Portugal played a significant part in the effort to restore peace to Angola and participated in negotiations for peace in Mozambique. In April 1993 Portuguese and Indonesian diplomats met with mediators in Rome, Italy, to begin discussions on the former Portuguese colony of East Timor. Portugal supported East Timor’s right to self-determination, and, amidst great bloodshed, East Timor voted to become independent of Indonesia in 1999. In the same year, Portugal transferred control of Macau to China, ending more than 400 years of Portuguese rule of the territory.

In 1996 Portugal and six of its former colonies—Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, and Sao Tome and Principe—formed the Community of Portuguese-Speaking Countries (known by its Portuguese acronym, CPLP) in Lisbon. The CPLP seeks to preserve the Portuguese language and culture, coordinate diplomatic efforts, and improve cooperation among its members.