This year marks the 40th anniversary of Portugal signing the Accession Treaty, paving the way for the country’s full EU membership. Over the four decades of membership, the Union has changed, both intensifying and enlarging. Throughout, Portugal has remained steadfast to the European vision, even though it has undergone profound changes in its relationship with the bloc.
The good student
Portugal’s political leaders opened discussions with the EU about future membership not long after the Revolution. There was a broad consensus amongst the political groups – except the Communists – that EU membership would help consolidate the country’s infant democracy and help it move away from its colonial legacy towards a continental European identity.
The EU was generally positive towards Portuguese membership, but the negotiations that led to its accession were long and tortuous. Portugal’s political structures were weak, its economy was substantially state-controlled and its military still carried substantial political influence. Before accession could occur, Portugal had to resolve these issues, as well as await the resolution of issues between the EU and Spain, whose bid to join was tied to Portugal’s.
Full membership began in 1986 and Portugal quickly felt the benefit of being a poor country joining a rich club! When membership began, Portugal’s GDP per head was just 58% of the EU average. As substantial funds began flowing into a reforming country, the economy began to strengthen. State enterprises were privatised. Financial markets were liberalised. Infrastructure development – notably motorways, airports and stadia – were rapidly constructed.
The EU’s political leaders hailed Portugal as a ‘good student’, as the reform obligations of the Union were keenly implemented. By 2000, GDP per capita had risen to 68% of the EU average. Public approval of EU membership in Portugal reached 80%.
Special needs
While Portugal began to bask in a new prosperity, the EU’s attention turned eastward, embracing poorer eastern European states recently liberated from the Soviet grip. Integration took a further significant step with the creation of the euro currency zone. Portuguese governments strongly backed these initiatives. But, their impact took some toll on the country’s small economy. The flow of EU funds to Portugal slowed. Weaknesses in Portugal’s labour market were exposed. Euro membership imposed tight new constraints on fiscal policy.
Portugal entered a recession. Government revenues tumbled and the budget deficit rocketed. The economy limped along until the 2008 global financial crisis finally tipped it towards the edge. By 2010, Portugal was being bailed out. Between them, the EU and the IMF pumped €78 billion into the country to help support the economy and stabilise government finances. State spending was cut, public salaries reduced and taxes increased. By 2014, the tough medicine had worked and the economy began to recover, with GDP per head reaching 78% of the EU average. Although the popularity of the Union had suffered, a majority of Portuguese voters still favoured continued membership.
Despite hardships, Portugal continued to champion major EU reforms, such as the establishment of the Schengen area and the substantial institutional and economic reforms enshrined in the 2007 Lisbon Treaty.
The graduate
By the time the bailout period ended, Portugal was a long-established member of the Union and began playing a key role in building relations with the new, small accession states in the east, helping guide them through the reform process it had undergone itself in the 1970s and 1980s.
Portugal also helped the Union improve its relations with Latin American and African countries, drawing on its close ties with several former colonies. These links were important in securing several new trade agreements.
Financial subsidy from the centre now runs at a lower level. Portugal is receiving €16 billion between 2022 and 2026 from the Union’s Recovery and Resilience Fund, designed to support recovery from the Covid slump. A wide variety of projects in the Algarve are receiving EU funding, including smart energy projects, water conservation measures, sustainable fisheries and support for small business development.
The Union faces formidable challenges, including uncertainty over global trade and developments over the future of Ukraine, matters made more complicated by the return of Trump in the US.
To guide the Union through this problematic future, the 27 member states have turned to Portugal’s former prime minister, Antonio Costa, who has now been appointed President of the European Council.
After 40 years of EU membership, Portugal has moved from the periphery to the centre, and there has never been a referendum in sight.
James Plaskitt is a retired politician who served in the British Parliament from 1997 until 2010. He now lives in the Algarve.
Photo: Signature of the Accession Treaty of Portugal at the Jeronimos Monastry in Lisbon on June 12, 1985 © Communautés européennes (multimedia.europarl.europa.eu)
