Portugal Must Integrate with Europe

By Carlos Gaspar & Teresa de Sousa

It is quite impossible to underestimate the importance, for Portugal, of its integration in Europe. Portuguese democracy and European integration are considered the inseparable outcomes of the post-authoritarian transition by the three main parties: the Socialist Party (PS); the Social-Democratic Party (PSD); and the Social Democratic Centre (CDS). This consensus has been shaken by the euro crisis, and the initial Portuguese response of a firm demonstration of European credentials has only recently faltered thanks to a troubled economy and doubts about the effectiveness of the prescribed treatment. However, Portuguese pro-European sentiment remains strong in the political mainstream, despite increasing public protests, and any retreat from keeping pace with Europe and Portugal's EU partners would only be done with the utmost reluctance.

Integrate or be marginalised

The first decade of Portugal's integration in Europe was marked by change. Portugal's economy and society were modernising rapidly against a backdrop of political stability and access to European structural funds. This sustained the credibility of a "strategy of convergence" with other EU members. The stabilisation of Portugal's international status as a member of the EU and NATO allowed a new cycle in bilateral relations to begin with Spain, Brazil and the former African colonies. Spain was no longer regarded as a threat to national independence and became Portugal's chief economic partner; Portugal became one of the main international investors in Brazil, playing a key role in institutionalising relations between it and the EU; and the normalisation of relations with former colonies led to the creation of the Community of Portuguese Speaking Countries.

Portugal's European policies also evolved, with officials acknowledging the need to be at the "core" of European integration and "as Europeanist as Spain". Portugal defending the principles of solidarity and equality between member states, against the perceived threat of domination by larger countries. Portugal has also stood firmly behind enlargement, despite being more negatively affected by recent expansions than any other member state.

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Indeed there has been a tension between Portugal's push for inclusion in further integration while becoming more marginalised within the Union. The EU's westernmost state was in danger of becoming a periphery within a periphery, which in turn pushed it towards the strategy of risking joining the single currency, despite stark disadvantages in productivity and competitiveness: the idea of remaining isolated at the margins of the economic and monetary unification was unthinkable. Yet the euro's first decade represented a period of stagnation, which further deepened Portugal's economic crisis.

The Present Crisis

The request for external financial assistance from the EU and the International Monetary Fund had devastating consequences for Portugal. The associated austerity measures have put both the country's democratic institutions and its economy to the test. The "European convergence" strategy, which assured political consensus amongst the largest national parties and, in a sense, defined the social contract of the Portuguese democracy, has been challenged in its very essence. Portugal's standing in the EU has slipped from being a "middle power" to one of the "PIGS", repeatedly downgraded by rating agencies.

The Portuguese political mainstream was initially united in its response to the crisis, avoiding the need for a technocratic government (as seen in Italy and Greece). There was consensus between the PS, PSD, and CDS, who shared strong public support in their implementation of the Memorandum negotiated with the troika. A minority Socialist government was replaced in 2011 with a majority centre right coalition (PSD and CDS), with the three mainstream parties picking up almost 80 percent of the vote while subscribing to the Economic Adjustment Programme. Although the government was then able to meet targets established in the Memorandum and face down a peaceful general strike, over recent months the situation has deteriorated.

Portugal had prided itself on a record of stoicism and relative peace, in contrast to others like Spain and Greece. But although recent protests have been led by only a small minority, they also suggest deepening disquiet within the population. This is partly fired by the economy underperforming in comparison to estimates, causing some to lose faith that the "recipe" of reform and austerity is working. The protests have also been fired by questions over the government's determination to "go further than the troika" (to demonstrate European commitment, credibility, and differentiate itself from Greece), with unpopular cuts in sensitive areas like health, pensions, and education. The immediate cause of country-wide protests in mid-September 2012, also involving the middle classes, was a controversial tax reform.

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As part of the 'Reinventing Europe' project, ECFR is publishing a series of papers on the national debates within EU member states over the crisis and the future direction of Europe.

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