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The land within the borders of the current Portuguese Republic has been continuously settled since prehistoric times. After a period of Roman rule followed by Visigothic and Suebian domination, in the 8th century most of the Iberian Peninsula was conquered by Moorish invaders professing Islam, who were later expelled by the Knights Templar. During the Christian Reconquista, Portugal established itself as an independent kingdom from Galicia in 1139, claiming to be the oldest European nation - state. In the 15th and 16th centuries, as the result of pioneering the Age of Discovery, Portugal expanded western influence and established the first global empire, becoming one of the world's major economic, political and military powers. In addition, the Portuguese Empire was the longest lived of the modern European colonial empires, spanning almost 600 years, from the capture of Ceuta in 1415 to the handover of Macau in 1999 and granting of sovereignty to East Timor in 2002. The empire spread throughout a vast number of territories that are now part of 53 different sovereign states. However, the country's international status was greatly reduced during the 19th century, especially following the Independence of Brazil, its largest colony. After the 1910 revolution deposed the monarchy, the democratic but unstable Portuguese First Republic was established, itself being superseded by the "Estado Novo" authoritarian regime. Democracy was restored after the Portuguese Colonial War and the Carnation Revolution in 1974.

Portugal is a developed country with a very high Human Development Index, the world's 19th highest quality - of - life as of 2005, and the 25th in Bloomberg's Global Innovation Index. It is one of the world's most globalized and peaceful nations: a member of the European Union and the United Nations, and a founding member of the Latin Union, the Organization of Ibero - American States, OECD, NATO, the Community of Portuguese Language Countries, the eurozone and the Schengen Agreement.

The early history of Portugal is shared with the rest of the Iberian Peninsula. The name of Portugal derives from the Roman name Portus Cale. The region was settled by Pre-Celts and Celts, giving origin to peoples like the Gallaeci, Lusitanians, Celtici and Cynetes, visited by Phoenicians and Carthaginians, incorporated in the Roman Republic dominions as Lusitania and part of Gallaecia (both part of Hispania), after 45 BC until 298 AD, settled again by Suebi, Buri and Visigoths, and conquered by Moors. Other minor influences include some 5th century vestiges of Alan settlement, which were found in Alenquer, Coimbra and even Lisbon.

The region of present day Portugal was inhabited by Neanderthals and then by Homo sapiens, who roamed the borderless region of the northern Iberian peninsula. These were subsistence societies that, although they did not establish prosperous settlements, did establish organized societies. Neolithic Portugal experimented with domestication of herding animals, the raising of some cereal crops and pluvial or marine fishing.

Early in the first millennium BC, several waves of Celts invaded Portugal from central Europe and inter-married with the local populations, forming different ethnic groups, with many tribes.

Chief among these tribes were the Calaicians or Gallaeci of northern Portugal, the Lusitanians of central Portugal, the Celtici of Alentejo, and the Cynetes or Conii of the Algarve. Among the lesser tribes or sub-divisions were the Bracari, Coelerni, Equaesi, Grovii, Interamici, Leuni, Luanqui, Limici, Narbasi, Nemetati, Paesuri, Quaquerni, Seurbi, Tamagani, Tapoli, Turduli, Turduli Veteres, Turdulorum Oppida, Turodi and Zoelae.

There were in the southern part of the country, some small, semi - permanent commercial coastal settlements founded by Phoenicians - Carthaginians (such as Tavira, in the Algarve).

The Tartessian language is claimed by some to be the first attested Celtic language. However, the linguistic mainstream continues to treat Tartessian as an unclassified language, and Koch's view of the evolution of Celtic has not been generally accepted.

The first Roman invasion of the Iberian Peninsula occurred in 219 BC. Within 200 years, almost the entire peninsula had been annexed to the Roman Republic. The Carthaginians, Rome's adversary in the Punic Wars, were expelled from their coastal colonies.

The Roman conquest of what is now part of modern day Portugal took almost two hundred years and took many lives of young soldiers and the lives of those who were sentenced to a quick death in the slavery mines when not sold as slaves to other parts of the empire. It suffered a severe setback in 150 BC, when a rebellion began in the north. The Lusitanians and other native tribes, under the leadership of Viriathus, wrested control of all of western Iberia.

Rome sent numerous legions and its best generals to Lusitania to quell the rebellion, but to no avail — the Lusitanians kept conquering territory. The Roman leaders decided to change their strategy. They bribed Viriathus's allies to kill him. In 139 BC, Viriathus was assassinated, and Tautalus became leader.

Rome installed a colonial regime. The complete Romanization of Lusitania only took place in the Visigothic era.

In 27 BC, Lusitania gained the status of Roman province, the Lusitanians lost their freedom and became oppressed. Later, a northern province of Lusitania was formed, known as Gallaecia, with capital in Bracara Augusta, today's Braga. There are still many ruins of castros (Hill fort) all over modern Portugal and remains of Castro culture. Numerous Roman sites are scattered around present day Portugal, some urban remains are quite large, like Conimbriga and Mirobriga. Several works of engineering, such as baths, temples, bridges, roads, circus, theaters and layman's homes are preserved throughout the country. Coins, some of which coined in Lusitanian land, as well as numerous pieces of ceramics were also found. Contemporary historians include Paulus Orosius (c. 375 - 418) and Hydatius (c. 400 - 469), bishop of Aquae Flaviae, who reported on the final years of the roman rule and arrival of the Germanic tribes.

In the early 5th century, Germanic tribes invaded the Iberian Peninsula, namely the Suebi and the Vandals (Silingi and Hasdingi) together with their allies, the Sarmatian Alans. Only the kingdom of the Suebi (Quadi and Marcomanni) would endure after the arrival of another wave of Germanic invaders, the Visigoths, who conquered all of the Iberian Peninsula and expelled or partially integrated the Vandals and the Alans. The Visigoths eventually conquered the Suebi kingdom and its capital city Bracara (modern day Braga) in 584 - 585. By the year 700, the entire Iberian Peninsula was ruled by Visigoths.

Portugal was part of the Caliphate for approximately five and a half centuries, following the Umayyad Caliphate conquest of the Iberian Peninsula in 711 until 1249 with the taking back of the Algarve by King Afonso III of Portugal during the Reconquista.

After beating the Visigoths in only a few months, the Umayyad Caliphate started expanding rapidly in the peninsula. Beginning in 711, the land that is now Portugal became part of the vast Umayyad Caliphate's empire of Damascus that stretched from the Indus river in India up to the South of France until its collapse in 750, a year in which the west of the empire gained its independence under Abd - ar - Rahman I with the creation of the Emirate of Córdoba. After almost two centuries, the Emirate turned into the Caliphate of Córdoba in 929 until its dissolution a century later in 1031 to no less than 23 small kingdoms, called Taifa kingdoms.

The governors of the taifas proclaimed themselves each Emir of his province and established diplomatic relations with the Christian Kingdoms of the north. Most of Portugal fell into the hands of the Taifa of Badajoz of the Aftasid Dynasty, and after a short spell of an ephemera taifa of Lisbon in 1022, fell within the dominion of the Taifa of Seville of the Abbadids poets. The Taifa period ended with the conquest of the Almoravids that came from Morocco in 1086 with a decisive victory in the Battle of Sagrajas followed one century later by the Almohads also coming from Marrakesh in 1147 after the second period of Taifa.

Al-Andalus was divided into different districts called Kura. Gharb Al-Andalus at its largest was constituted of ten kuras, each with a distinct capital and governor. The main cities of the period were Beja, Silves, Alcácer do Sal, Santarém, Lisbon and Coimbra.

The Muslim population of the region consisted mainly of Arabs, Berbers and Latin converts to Islam. The Arabs were principally noblemen coming from Yemen, though they were only few in numbers they constituted the elite of the population. The Berbers were originally from the Atlas mountains and Rif mountains of North Africa and were essentially nomads. The Muslim conquerors, few in number, stayed largely in the Algarve region, and in general south of the Tagus.

During the Reconquista period, Christians reconquered the Iberian Peninsula from the Muslim and Moorish domination. In 868, the First County of Portugal was formed. A victory over the Muslims at the Battle of Ourique in 1139 is traditionally taken as the occasion when the County of Portugal as a fief of the Kingdom of León was transformed into the independent Kingdom of Portugal.

Henry, to whom the newly formed county was awarded by Alfonso VI for his role in reconquering land from the Moors, based his newly formed county in Bracara Augusta (nowadays Braga), capital city of the ancient Roman province, and also previous capital of several kingdoms over the first millennia.

On 24 June 1128, the Battle of São Mamede occurred near Guimarães. Afonso Henriques, Count of Portugal, defeated his mother Countess Teresa and her lover Fernão Peres de Trava, thereby establishing himself as sole leader. Afonso then turned his arms against the persistent problem of the Moors in the south. His campaigns were successful and, on 25 July 1139, he obtained an overwhelming victory in the Battle of Ourique, and straight after was unanimously proclaimed King of Portugal by his soldiers.

Afonso then established the first of the Portuguese Cortes at Lamego, where he was crowned by the Archbishop of Braga, though the validity of the Cortes of Lamego has been disputed and called a myth created during the Portuguese Restoration War. Afonso was recognized in 1143 by King Alfonso VII of León and Castile, and in 1179 by Pope Alexander III.

Afonso Henriques and his successors, aided by military monastic orders, pushed southward to drive out the Moors, as the size of Portugal covered about half of its present area. In 1249, this Reconquista ended with the capture of the Algarve on the southern coast, giving Portugal its present day borders, with minor exceptions.

The reigns of Dinis I, Afonso IV, and Pedro I for the most part saw peace with the Christian kingdoms of Iberia, and thus the Portuguese kingdom advanced in prosperity and culture.

In 1348 and 1349, like the rest of Europe, Portugal was devastated by the Black Death. In 1373, Portugal made an alliance with England, which is the longest standing alliance in the world.

In 1383, John I of Castile, husband of Beatrice of Portugal and son - in - law of Ferdinand I of Portugal, claimed the throne of Portugal. A faction of petty noblemen and commoners, led by John of Aviz (later King John I of Portugal) and commanded by General Nuno Álvares Pereira defeated the Castilians in the Battle of Aljubarrota. With this battle, the House of Aviz became the ruling house of Portugal.

Portugal spearheaded the exploration of the world and undertook the Age of Discovery. Prince Henry the Navigator, son of King João I, became the main sponsor and patron of this endeavor. During this period, Portugal explored the Atlantic Ocean, discovering several Atlantic archipelagos like the Azores, Madeira or Cape Verde, explored the African coast as well as colonizing selected areas of Africa, discovered an eastern route to India that rounded the Cape of Good Hope, discovered Brazil, explored the Indian Ocean and established trading routes throughout most of southern Asia, and sent the first direct European maritime trade and diplomatic missions to China and Japan.

In 1415, Portugal acquired the first of its overseas colonies by conquering Ceuta. It was the first prosperous Islamic trade center in North Africa. There followed the first discoveries in the Atlantic: Madeira and the Azores, which led to the first colonization movements.

Throughout the 15th century, Portuguese explorers sailed the coast of Africa, establishing trading posts for several common types of tradable commodities at the time, ranging from gold to slaves, as they looked for a route to India and its spices, which were coveted in Europe.

The Treaty of Tordesillas, intended to resolve the dispute that had been created following the return of Christopher Columbus, was signed on 7 June 1494, and divided the newly discovered lands outside Europe between Portugal and Spain along a meridian 370 leagues west of the Cape Verde islands (off the west coast of Africa).

In 1498, Vasco da Gama reached India and brought economic prosperity to Portugal and its population of 1.7 million residents, which helped start the Portuguese Renaissance.

In 1500, Pedro Álvares Cabral discovered Brazil and claimed it for Portugal. Ten years later, Afonso de Albuquerque conquered Goa in India, Ormuz in the Persian Strait, and Malacca, now a state in Malaysia. Thus, the Portuguese empire held dominion over commerce in the Indian Ocean and South Atlantic. The Portuguese sailors set out to reach Eastern Asia by sailing eastward from Europe landing in such places as Taiwan, Japan and the island of Timor.

The Treaty of Zaragoza, signed on 22 April 1529 between Portugal and Spain, specified the antimeridian to the line of demarcation specified in the Treaty of Tordesillas. All these facts made Portugal the world's major economic, military and political power from the 15th century to the beginning of the 16th century.

Portugal's sovereignty was interrupted between 1580 and 1640. This occurred because the last two kings of the House of Aviz – King Sebastian, who died in the battle of Alcácer Quibir in Morocco, and his great - uncle and successor, King Henry of Portugal – both died without heirs, resulting in the Portuguese succession crisis of 1580.

Subsequently, Philip II of Spain claimed the throne and so became Philip I of Portugal. Although Portugal did not lose its formal independence, it was governed by the same monarch who governed Spain, briefly forming a union of kingdoms, as a personal union. At this time Spain was a geographic territory. The joining of the two crowns deprived Portugal of a separate foreign policy, and led to the involvement in the Eighty Years' War being fought in Europe at the time between Spain and the Netherlands.

War led to a deterioration of the relations with Portugal's oldest ally, England, and the loss of Hormuz. From 1595 to 1663 the Dutch - Portuguese War primarily involved the Dutch companies invading many Portuguese colonies and commercial interests in Brazil, Africa, India and the Far East, resulting in the loss of the Portuguese Indian Sea trade monopoly.

In 1640, John IV spearheaded an uprising backed by disgruntled nobles and was proclaimed king. The Portuguese Restoration War between Portugal and the Spains, on the aftermath of the 1640 revolt, ended the sixty year period of the Iberian Union under the House of Habsburg. This was the beginning of the House of Braganza, which reigned in Portugal until 1910.

Official estimates – and most estimates made so far – place the number of Portuguese migrants to Colonial Brazil during the gold rush of the 18th century at 600,000. This represented one of the largest movements of European populations to their colonies to the Americas during the colonial times. According to historian Leslie Bethell, "In 1700 Portugal had a population of about two million people." During the 18th century, hundreds of thousands left for the Portuguese Colony of Brazil, despite efforts by the crown to place severe restrictions on emigration.

In 1738, Sebastião José de Carvalho e Melo, 1st Marquis of Pombal, began a diplomatic career as the Portuguese Ambassador in London and later in Vienna. The Queen consort of Portugal, Archduchess Maria Anne Josefa of Austria, was fond of Melo; and after his first wife died, she arranged the widowed de Melo's second marriage to the daughter of the Austrian Field Marshal Leopold Josef, Count von Daun. King John V of Portugal, however, was not pleased and recalled Melo to Portugal in 1749. John V died the following year and his son, Joseph I of Portugal, was crowned. In contrast to his father, Joseph I was fond of de Melo, and with the Queen Mother's approval, he appointed Melo as Minister of Foreign Affairs. As the King's confidence in de Melo increased, the King entrusted him with more control of the state. By 1755, Sebastião de Melo was made Prime Minister. Impressed by British economic success he had witnessed while Ambassador, he successfully implemented similar economic policies in Portugal. He abolished slavery in Portugal and in the Portuguese colonies in India; reorganized the army and the navy; restructured the University of Coimbra, and ended discrimination against different Christian sects in Portugal.

But Sebastião de Melo's greatest reforms were economic and financial, with the creation of several companies and guilds to regulate every commercial activity. He demarcated the region for production of Port to ensure the wine's quality, and this was the first attempt to control wine quality and production in Europe. He ruled with a strong hand by imposing strict law upon all classes of Portuguese society from the high nobility to the poorest working class, along with a widespread review of the country's tax system. These reforms gained him enemies in the upper classes, especially among the high nobility, who despised him as a social upstart.

Disaster fell upon Portugal in the morning of 1 November 1755, when Lisbon was struck by a violent earthquake with an estimated Richter scale magnitude of 9. The city was razed to the ground by the earthquake and the subsequent tsunami and ensuing fires. Sebastião de Melo survived by a stroke of luck and then immediately embarked on rebuilding the city, with his famous quote: "What now? We bury the dead and take care of the living."

Despite the calamity and huge death toll, Lisbon suffered no epidemics and within less than one year was already being rebuilt. The new downtown of Lisbon was designed to resist subsequent earthquakes. Architectural models were built for tests, and the effects of an earthquake were simulated by marching troops around the models. The buildings and big squares of the Pombaline Downtown still remain as one of Lisbon's tourist attractions. Sebastião de Melo also made an important contribution to the study of seismology by designing an inquiry that was sent to every parish in the country.

Following the earthquake, Joseph I gave his Prime Minister even more power, and Sebastião de Melo became a powerful, progressive dictator. As his power grew, his enemies increased in number, and bitter disputes with the high nobility became frequent. In 1758 Joseph I was wounded in an attempted assassination. The Távora family and the Duke of Aveiro were implicated and executed after a quick trial. The Jesuits were expelled from the country and their assets confiscated by the crown. Sebastião de Melo prosecuted every person involved, even women and children. This was the final stroke that broke the power of the aristocracy. Joseph I made his loyal minister Count of Oeiras in 1759.

In 1762 Spain invaded Portuguese territory as part of the Seven Years' War, but by 1763 the status quo between Spain and Portugal before the war had been restored.

Following the Távora affair, the new Count of Oeiras knew no opposition. Made "Marquis of Pombal" in 1770, he effectively ruled Portugal until Joseph I's death in 1779. However, historians also argue that Pombal’s "enlightenment," while far reaching, was primarily a mechanism for enhancing autocracy at the expense of individual liberty and especially an apparatus for crushing opposition, suppressing criticism and furthering colonial economic exploitation as well as intensifying book censorship and consolidating personal control and profit.

The new ruler, Queen Maria I of Portugal, disliked the Marquis because of the power he amassed, and never forgave him for the ruthlessness at which he dispatched the Távora family, and upon her accession to the throne, she withdrew all his political offices. Pombal died on his estate at Pombal in 1782.

In the autumn of 1807, Napoleon moved French troops through Spain to invade Portugal. From 1807 to 1811, British - Portuguese forces would successfully fight against the French invasion of Portugal, while the royal family and the Portuguese nobility, including Maria I, relocated to the Portuguese territory of Brazil, at that time a colony of the Portuguese Empire, in South America. This episode is known as the Transfer of the Portuguese Court to Brazil.

With the occupation by Napoleon, Portugal began a slow but inexorable decline that lasted until the 20th century. This decline was hastened by the independence in 1822 of the country's largest colonial possession, Brazil. In 1807, as Napoleon's army closed in on Lisbon, the Prince Regent João VI of Portugal transferred his court to Brazil and established Rio de Janeiro as the capital of the Portuguese Empire. In 1815, the Portuguese Empire changed its name to the United Kingdom of Portugal, Brazil and the Algarves.

As a result of the change in its status and the arrival of the Portuguese royal family, Brazilian administrative, civic, economical, military, educational and scientific apparatus were expanded and highly modernized. Portuguese and their allied British troops fought against the French Invasion of Portugal and by 1815 the situation in Europe had cooled down sufficiently that João VI would have been able to return safely to Lisbon. However, the King of Portugal remained in Brazil until the Liberal Revolution of 1820, which started in Porto, demanded his return to Lisbon in 1821.

Thus he returned to Portugal but left his son Pedro in charge of Brazil. When the king attempted the following year to return the Kingdom of Brazil to subordinate status as a principality, his son Pedro, with the overwhelming support of the Brazilian elites, declared Brazil's independence from Portugal. Cisplatina (today's sovereign state of Uruguay), in the south, was one of the last additions to the territory of Brazil under Portuguese rule.

At the height of European colonialism in the 19th century, Portugal had already lost its territory in South America and all but a few bases in Asia. Luanda, Benguela, Bissau, Lourenço Marques, Porto Amboim and the Island of Mozambique were among the oldest Portuguese founded port cities in its African territories. During this phase, Portuguese colonialism focused on expanding its outposts in Africa into nation-sized territories to compete with other European powers there.

With the Conference of Berlin of 1884, Portuguese Africa territories had their borders formally established on request of Portugal in order to protect the centuries long Portuguese interests in the continent from rivalries enticed by the Scramble for Africa. Portuguese Africa's cities and towns like Nova Lisboa, Sá da Bandeira, Silva Porto, Malanje, Tete, Vila Junqueiro, Vila Pery and Vila Cabral were founded or redeveloped inland during this period and beyond. New coastal towns like Beira, Moçâmedes, Lobito, João Belo, Nacala and Porto Amélia were also founded. Even before the turn of the 20th century, railway tracks as the Benguela railway in Angola, and the Beira railway in Mozambique, started to be built to link coastal areas and selected inland regions.

Other episodes during this period of the Portuguese presence in Africa include the 1890 British Ultimatum. This forced the Portuguese military to retreat from the land between the Portuguese colonies of Mozambique and Angola (most of present day Zimbabwe and Zambia), which had been claimed by Portugal and included in its "Pink Map", which clashed with British aspirations to create a Cape to Cairo Railway. The Portuguese territories in Africa were Cape Verde, São Tomé and Príncipe, Portuguese Guinea, Angola and Mozambique. The tiny fortress of São João Baptista de Ajudá on the coast of Dahomey, was also under Portuguese rule. In addition, the country still ruled the Asian territories of Portuguese India, Portuguese Timor and Macau.

On 1 February 1908, the king Dom Carlos I of Portugal and his heir apparent, Prince Royal Dom Luís Filipe, Duke of Braganza, were murdered in Lisbon. Under his rule, Portugal had twice been declared bankrupt – on 14 June 1892, and again on 10 May 1902 – causing social turmoil, economic disturbances, protests, revolts and criticism of the monarchy. Manuel II of Portugal become the new king, but was eventually overthrown by the 5 October 1910 revolution, which abolished the regime and instated republicanism in Portugal. Political instability and economic weaknesses were fertile ground for chaos and unrest during the Portuguese First Republic. These conditions would lead to the failed Monarchy of the North, the 28 May 1926 coup d'état, and the creation of the National Dictatorship (Ditadura Nacional).

This in turn led to the establishment of the right wing dictatorship of the Estado Novo under António de Oliveira Salazar in 1933. Portugal was one of only five European countries to remain neutral in World War II. From the 1940s to the 1960s, Portugal was a founding member of NATO, OECD and the European Free Trade Association (EFTA). Gradually, new economic development projects and relocation of mainland Portuguese citizens into the overseas provinces in Africa were initiated, with Angola and Mozambique, as the largest and richest overseas territories, being the main targets of those initiatives. These actions were used to affirm Portugal's status as a pluricontinental nation and not as a colonial empire.

After India attained independence in 1947, pro-Indian residents of Dadra and Nagar Haveli, with the support of the Indian government and the help of pro-independence organizations, invaded the territories of Dadra and Nagar Haveli from Portuguese rule in 1954. In 1961, São João Baptista de Ajudá's annexation by the Republic of Dahomey was the start of a process that led to the final dissolution of the centuries old Portuguese Empire.

According to the census of 1921 São João Baptista de Ajudá had 5 inhabitants and, at the moment of the ultimatum by the Dahomey Government, it had only 2 inhabitants representing Portuguese Sovereignty. Another forcible retreat from overseas territories occurred in December 1961 when Portugal refused to relinquish the territories of Goa, Daman and Diu. As a result, the Portuguese army and navy were involved in armed conflict in its colony of Portuguese India against the Indian Armed Forces. The operations resulted in the defeat of the limited Portuguese defensive garrison, which was forced to surrender to a much larger military force. The outcome was the loss of the remaining Portuguese territories in the Indian subcontinent. The Portuguese regime refused to recognize Indian sovereignty over the annexed territories, which continued to be represented in Portugal's National Assembly until the military coup of 1974.

Also in the early 1960s, independence movements in the Portuguese overseas provinces of Angola, Mozambique and Guinea in Africa, resulted in the Portuguese Colonial War (1961 - 1974).

Throughout the colonial war period Portugal had to deal with increasing dissent, arms embargoes and other punitive sanctions imposed by most of the international community. However, the authoritarian and conservative Estado Novo regime, firstly installed and governed by António de Oliveira Salazar and from 1968 onward led by Marcelo Caetano, tried to preserve a vast centuries long intercontinental empire with a total area of 2,168,071 km².

The Portuguese government and army successfully resisted the decolonization of its overseas territories until April 1974, when a bloodless left wing military coup in Lisbon, known as the Carnation Revolution, led the way for the independence of the overseas territories in Africa and Asia, as well as for the restoration of democracy after two years of a transitional period known as PREC (Processo Revolucionário Em Curso). This period was characterized by social turmoil and power disputes between left and right wing political forces. The retreat from the overseas territories and the acceptance of its independence terms by Portuguese head representatives for overseas negotiations, which would create independent states in 1975, prompted a mass exodus of Portuguese citizens from Portugal's African territories (mostly from Portuguese Angola and Mozambique).

Over one million Portuguese refugees fled the former Portuguese provinces. Mário Soares and António de Almeida Santos were charged with organizing the independence of Portugal's overseas territories. By 1975, all the Portuguese African territories were independent and Portugal held its first democratic elections in 50 years.

The country continued to be governed by a Junta de Salvação Nacional until the Portuguese legislative election of 1976. It was won by the Portuguese Socialist Party (PS) and Mário Soares, its leader, became Prime Minister of the 1st Constitutional Government on 23 July. Mário Soares would be Prime Minister from 1976 to 1978 and again from 1983 to 1985. In this capacity Soares tried to resume the economic growth and development record that had been achieved before the Carnation Revolution, during the last decade of the previous regime. He initiated the process of accession to the European Economic Community (EEC) by starting accession negotiations as early as 1977.

The country bounced between socialism and adherence to the neoliberal model. Land reform and nationalizations were enforced; the Portuguese Constitution (approved in 1976) was rewritten in order to accommodate socialist and communist principles. Until the constitutional revisions of 1982 and 1989, the constitution was a highly charged ideological document with numerous references to socialism, the rights of workers, and the desirability of a socialist economy. Portugal's economic situation after its transition to democracy, obliged the government to pursue International Monetary Fund (IMF) - monitored stabilization programs in 1977-78 and 1983-85.

In 1986, Portugal joined the European Economic Community (EEC) that later became the European Union (EU). In the following years Portugal's economy progressed considerably as a result of EEC / EU structural and cohesion funds and Portuguese companies' easier access to foreign markets.

Portugal's last overseas territory, Macau, was peacefully handed over to the People's Republic of China (PRC) in 1999, under the 1987 joint declaration that set the terms for Macau's handover from Portugal to the PRC. In 2002, the independence of East Timor (Asia) was formally recognized by Portugal, after an incomplete decolonization process that was started in 1975 because of the Carnation Revolution.

On 26 March 1995, Portugal started to implement Schengen Area rules, eliminating border controls with other Schengen members while simultaneously strengthening border controls with non-member states. In 1996 the country was a co-founder of the Community of Portuguese Language Countries (CPLP) headquartered in Lisbon. Expo '98 took place in Portugal and in 1999 it was one of the founding countries of the euro and the eurozone.

On 5 July 2004, José Manuel Barroso, then Prime Minister of Portugal, was nominated President of the European Commission, the most powerful office in the European Union. On 1 December 2009, the Treaty of Lisbon entered into force, after had been signed by the European Union member states on 13 December 2007 in the Jerónimos Monastery, in Lisbon, enhancing the efficiency and democratic legitimacy of the Union and improving the coherence of its action.

Economic disruption and an unsustainable government debt in the wake of the late 2000s financial crisis led the country to negotiate in 2011 with the IMF and the European Union, through the European Financial Stability Mechanism (EFSM) and the European Financial Stability Facility (EFSF), a loan to help the country stabilize its finances.

The territory of Portugal includes an area in the Iberian Peninsula (referred to as the continent by most Portuguese) and two archipelagos in the Atlantic Ocean: the archipelagos of Madeira and the Azores. It lies between latitudes 32° and 43° N, and longitudes 32° and 6° W.

Mainland Portugal is split by its main river, the Tagus that flows from Spain and disgorges in Tagus Estuary, in Lisbon, before escaping into the Atlantic. The northern landscape is mountainous towards the interior with several plateaus indented by river valleys, whereas the south, that includes the Algarve and the Alentejo regions, is characterized by rolling plains.

Portugal's highest peak is the similarly named Mount Pico on the island of Pico in the Azores. This ancient volcano, which measures 2,351 m (7,713 ft) is a highly iconic symbol of the Azores, while the Serra da Estrela on the mainland (the summit being 1,991 m (6,532 ft) above sea level) is an important seasonal attraction for skiers and winter sports enthusiasts.

The archipelagos of Madeira and the Azores are scattered within the Atlantic Ocean: the Azores straddling the Mid Atlantic Ridge on a tectonic triple junction, and Madeira along a range formed by in-plate hotspot geology. Geologically, these islands were formed by volcanic and seismic events, although the last terrestrial volcanic eruption occurred in 1957-58 (Capelinhos) and minor earthquakes occur sporadically, usually of low intensity.

Portugal's Exclusive Economic Zone, a sea zone over which the Portuguese have special rights over the exploration and use of marine resources, has 1,727,408 km². This is the 3rd largest Exclusive Economic Zone of the European Union and the 11th largest in the world.

Portugal is defined as a Mediterranean climate (Csa in the south, interior, and Douro region; Csb in the north, center and coastal Alentejo; and also Semi - arid climate or Steppe climate (Bsk in certain parts of Beja district) according to the Koppen - Geiger Climate Classification), and is one of the warmest European countries: the annual average temperature in mainland Portugal varies from 12 °C (53.6 °F) in the mountainous interior north to over 18 °C (64.4 °F) in the south and on the Guadiana river basin. The Algarve, separated from the Alentejo region by mountains reaching up to 900 meters (3,000 ft) in Pico da Foia, has a climate similar to that of the southern coastal areas of Spain or Southern California.

Annual average rainfall in the mainland varies from just over 3,000 mm (118.1 in) in the northern mountains to less than 300 mm (11.8 in) in the area of the Massueime River, near Côa, along the Douro river. Mount Pico is recognized as receiving the largest annual rainfall (over 6,250 mm (246.1 in) per year) in Portugal, according to Instituto de Meteorologia (English: Portuguese Meteorological Institute).

In some areas, such as the Guadiana basin, annual average temperatures can be as high as 20 °C (68 °F), but summer highest temperatures may be over 45 °C (113 °F). The record high of 47.4 °C (117.3 °F) was recorded in Amareleja, although this might not be the hottest spot in summer, according to satellite readings.

Snowfalls occur regularly in the interior North and Center of the country in particular in the districts of Vila Real, Bragança, Viseu and Guarda. In winter temperatures may drop below −10 °C (14.0 °F) in particular in Serra da Estrela, Serra do Gerês and Serra de Montesinho. In these places snow can fall any time from October to May. In the south of the country snowfalls are rare but still occur in the highest elevations.

The country has around 2500 to 3200 hours of sunshine a year, an average of 4-6 h in winter and 10-12 h in the summer, with higher values in the southeast and lower in the northwest.

The sea surface temperature on the west coast of mainland Portugal varies from 13 °C (55.4 °F) - 15 °C (59.0 °F) in winter to 18 °C (64.4 °F) - 20 °C (68.0 °F) in the summer while on the south coast it ranges from 15 °C (59.0 °F) in Winter and rises in the summer to about 23 °C (73.4 °F) occasionally reaching 26 °C (78.8 °F).

Both the archipelagos of the Azores and Madeira have a subtropical climate, although variations between islands exist, making weather predictions very difficult (owing to rough topography). The Madeira and Azorean archipelagos have a narrower temperature range, with annual average temperatures exceeding 20 °C (68 °F) along the coast (according to the Portuguese Meteorological Institute). Some islands in Azores do have drier months in the summer. Consequently, the island of the Azores have been identified as having a Mediterranean climate (both Csa and Csb types), while some islands (such as Flores or Corvo) are classified as Maritime Temperate (Cfb) or Humid subtropical (Cfa), respectively, according to Koppen - Geiger classification. Porto Santo island in Madeira has a semi - arid Steppe climate (BSh). The Savage Islands, which are part of the regional territory of Madeira are unique in being classified as a Desert climates (BWh) with an annual average rainfall of approximately 150 mm (5.9 in). The sea surface temperature in the archipelagos varies from 17 °C (62.6 °F) - 18 °C (64.4 °F) in winter to 24 °C (75.2 °F) - 25 °C (77.0 °F) in the summer occasionally reaching 26 °C (78.8 °F).

Owing to humans occupying the territory of Portugal for thousands of years, little is left of the original vegetation. Protected areas of Portugal include one national park (Portuguese: Parque Nacional), 12 natural parks (Portuguese: Parque Natural), nine natural reserves (Portuguese: Reserva Natural), five natural monuments (Portuguese: Monumento Natural), and seven protected landscapes (Portuguese: Paisagem Protegida), which include the Parque Nacional da Peneda - Gerês, the Parque Natural da Serra da Estrela and the Paul de Arzila.

These natural environments are shaped by diverse flora, and include widespread species of pine (especially the Pinus pinaster and Pinus pinea species), the chestnut (Castanea sativa), the cork-oak (Quercus suber), the holm oak (Quercus ilex), the Portuguese oak (Quercus faginea), and eucalyptus (Eucalyptus globulus). All are prized for their economic value. Laurisilva is a unique type of subtropical rainforest found in few areas of Europe and the world: in the Azores, and in particular on the island of Madeira, there are large forests of endemic Laurisilva forests (the latter protected as a natural heritage preserve).

There are several species of diverse mammalian fauna, including the fox, badger, Iberian lynx, Iberian Wolf, wild goat (Capra pyrenaica), wild cat (Felis silvestris), hare, weasel, polecat, chameleon, mongoose, civet, brown bear (spotted near Rio Minho, close to Peneda - Gerês) and many others. Portugal is an important stopover for migratory birds, in places such as Cape St. Vincent or the Monchique mountain, where thousands of birds cross from Europe to Africa during the autumn or in the spring (return migration).

Most of the avian species congregate along the Iberian Peninsula since it is the closest stopover between northern Europe and Africa. Six hundred bird species occur in Portugal (either for nesting or during the course of migration), and annually there are new registries of nesting species. The archipelagos of the Azores and Madeira are transient stopover for American, European, and African birds, while continental Portugal mostly encounters European and African bird species.

There are over 100 varieties of freshwater fish species, varying from the giant European catfish (in the Tagus International Natural Park) to some small and endemic species that live only in small lakes (along the western lakes for example). Some of these rare and specific species are highly endangered because of habitat loss, pollution and drought. Upwelling along the west coast of Portugal makes the sea extremely rich in nutrients and diverse species of marine fish; the Portuguese marine waters are one of the richest in the world. Marine fish species are more common, and include thousands of species, such as the sardine (Sardina pilchardus), tuna and Atlantic mackerel. Bioluminescent species are also well represented (including species in different colour spectrum and forms), like the glowing plankton that are possible to observe in some beaches.

There are many endemic insect species, most only found in certain parts of Portugal, while other species are more widespread like the stag beetle (Lucanus cervus) and the cicada. The Macaronesian islands (Azores and Madeira) have many endemic species (like birds, reptiles, bats, insects, snails and slugs) that evolved independently from other regions of Portugal. In Madeira, for example, it is possible to observe more than 250 species of land gastropods.

Portugal has been a democratic republic since the ratification of the Constitution of 1976, with Lisbon, the nation's largest city, as its capital. The constitution grants the division, or separation, of powers among legislative, executive and judicial branches. The four main institutions as described in this constitution are the President of the Republic, the Parliament, known as the Assembleia da República (English: Assembly of the Republic (Portugal)), the Government, headed by a Prime Minister, and the courts.

The President, who is elected to a five year term, has a supervisory non-executive role. The Parliament is a chamber composed of 230 deputies elected for a four year term. The government, whose head is the Prime Minister, chooses a Council of Ministers, that comprises the Ministers and State Secretaries. The courts are organized into several levels: judicial, administrative and fiscal branches. The Supreme Courts are institutions of last resort / appeal. A thirteen member Constitutional Court oversees the constitutionality of the laws.

Portugal operates a multi - party system of competitive legislatures / local administrative governments at the national, regional and local levels. The Legislative Assembly, Regional Assemblies and local municipalities and / or parishes, are dominated by two political parties, the Socialist Party and the Social Democratic Party, in addition to the Democratic Unity Coalition (Portuguese Communist Party plus Ecologist Party "The Greens"), the Left Bloc and the Democratic and Social Centre – People's Party, which garner between 5 and 15% of the vote regularly.

The President, elected to a five year term by direct, universal suffrage, is also Commander - in - Chief of the Armed Forces. Presidential powers include the appointment of the Prime Minister and Council of Ministers (where the President is obligated by the results from Legislative Elections); dismissing the Prime Minister; dissolving the Assembly (to call early elections); vetoing legislation (which may be overridden by the Assembly); and declaring a State of War or siege.

The President is advised on issues of importance by the Council of State, which is composed of six senior civilian officers, any former Presidents elected under the 1976 Constitution, five members chosen by the Assembly, and five selected by the president.

The Government is headed by the presidentially appointed Prime Minister, who names a Council of Ministers to act as the government and cabinet. Each government is required to define the broad outline of its policies in a program, and present it to the Assembly for a mandatory period of debate. The failure of the Assembly to reject the program by a majority of deputies confirms the government in office.

The Assembly of the Republic is a unicameral body composed of up to 230 deputies. Elected by universal suffrage according to a system of proportional representation, deputies serve four year terms of office, unless the President dissolves the Assembly and calls for new elections.

The Portuguese legal system is part of the civil law legal system, also called the continental family legal system. Until the end of the 19th century, French law was the main influence. Since then, the major influence has been German law. The main laws include the Constitution (1976, as amended), the Civil Code (1966, as amended) and the Penal Code (1982, as amended). Other relevant laws are the Commercial Code (1888, as amended) and the Civil Procedure Code (1961, as amended).

Portuguese law applied in the former colonies and territories and continues to be the major influence for those countries. Portugal's main police organizations are the Guarda Nacional Republicana – GNR (National Republican Guard), a gendarmerie; the Polícia de Segurança Pública – PSP (Public Security Police), a civilian police force who work in urban areas; and the Polícia Judiciária – PJ (Judicial Police), a highly specialized criminal investigation police that is overseen by the Public Ministry.

Portugal was one of the first countries in the world to abolish the death penalty. Maximum jail sentences are limited to 25 years.

Portugal has arguably the most liberal laws concerning possession of illicit drugs in the Western world. In 2001 Portugal decriminalized possession of effectively all drugs that are still illegal in other developed nations including, but not limited to, marijuana, cocaine, heroin and LSD. While possession is legal, trafficking and possession of more than "10 days worth of personal use" are still punishable by jail time and fines. People caught with small amounts of any drug are given the choice to go to a rehab facility, and may refuse treatment without consequences. Despite criticism from other European nations, who stated Portugal's drug consumption would tremendously increase, overall drug use rose only slightly, whilst use among teenagers dropped, along with the number of HIV infection cases, which had dropped 50 percent by 2009.

On 31 May 2010, Portugal became the sixth country in Europe and the eighth country in the world to legally recognize same sex marriage on the national level. The law came into force on 5 June 2010.

Administratively, Portugal is divided into 308 municipalities (Portuguese: municípios or concelhos), which are subdivided into 4260 civil parishes (Portuguese: freguesia). Operationally, the municipality and civil parish, along with the national government, are the only legally identifiable local administrative units identified by the government of Portugal (for example, cities, towns or villages have no standing in law, although may be used as catchment for the defining services). For statistical purposes the Portuguese government also identifies NUTS, inter - municipal communities and informally, the district system, used until European integration (and being phased-out by the national government). Continental Portugal is agglomerated into 18 districts, while the archipelagos of the Azores and Madeira are governed as autonomous regions; the largest units, established since 1976, are either mainland Portugal (Portuguese: Portugal Continental) and the autonomous regions of Portugal (Azores and Madeira).

The 18 districts of mainland Portugal are: Aveiro, Beja, Braga, Bragança, Castelo Branco, Coimbra, Évora, Faro, Guarda, Leiria, Lisbon, Portalegre, Porto, Santarém, Setúbal, Viana do Castelo, Vila Real and Viseu – each district takes the name of the district capital.

Within the European Union NUTS (Nomenclature of Territorial Units for Statistics) system, Portugal is divided into seven regions: the Azores, Alentejo, Algarve, Centro, Lisboa, Madeira and Norte, and with the exception of the Azores and Madeira, these NUTS areas are subdivided into 28 subregions.

A member state of the United Nations since 1955, Portugal is also a founding member of NATO (1949), OECD (1961) and EFTA (1960); it left the latter in 1986 to join the European Economic Community, that would become the European Union in 1993. In 1996 it co-founded the Community of Portuguese Language Countries (CPLP), which seeks to foster closer economic and cultural ties between the world's Lusophone nations.

In addition, Portugal is a full member of the Latin Union (1983) and the Organization of Ibero - American States (1949). It has a friendship alliance and dual citizenship treaty with its former colony, Brazil. Portugal and England (subsequently, the United Kingdom of Great Britain and Northern Ireland) share the world's oldest active military accord through their Anglo - Portuguese Alliance (Treaty of Windsor), which was signed in 1373.

There are two international territorial disputes, both with Spain:

• Olivenza. Under Portuguese sovereignty since 1297, the municipality of Olivenza was ceded to Spain under the Treaty of Badajoz in 1801, after the War of the Oranges. Portugal claimed it back in 1815 under the Treaty of Vienna. However, since the 19th century, it has been continuously ruled by Spain which considers the territory theirs not only de facto but also de jure.
• The Ilhas Selvagens (Savage Islands). The archipelago is under Portuguese domination but is geographically closer to the Canary Islands (165 km) than to Madeira (280 km). Found in 1364 by Italian navigators, the islands belonged to private owners until 1971, when the Portuguese government bought them and established a natural reserve area covering the whole archipelago. The islands have been claimed by Spain since 1911 and the dispute has caused some periods of political tension between the two countries. The main problem is not so much their intrinsic value but the fact that they expand considerably to the south the Exclusive Economic Zone of Portugal.

The armed forces have three branches: Navy, Army and Air Force. They serve primarily as a self defense force whose mission is to protect the territorial integrity of the country and provide humanitarian assistance and security at home and abroad. As of 2008, the three branches numbered 39,200 active personnel including 7,500 women. Portuguese military expenditure in 2009 was $5.2 billion, representing 2.1 percent of GDP. Military conscription was abolished in 2004. The minimum age for voluntary recruitment is 18 years.

The Army (21,000 personnel) comprises three brigades and other small units. An infantry brigade (mainly equipped with Pandur II APC), a mechanized brigade (mainly equipped with Leopard 2 A6 tanks and M113 APC) and a Rapid Reaction Brigade (consisting of paratroopers, commandos and rangers). The Navy (10,700 personnel, of which 1,580 are marines) has five frigates, seven corvettes, two submarines, and 28 patrol and auxiliary vessels. The Air Force (7,500 personnel) has the Lockheed F-16 Fighting Falcon and the Dassault / Dornier Alpha Jet as the main combat aircraft.

In addition to the three branches of the armed forces, there is the National Republican Guard, a security force subject to military law and organization (gendarmerie) comprising 25,000 personnel. This force is under the authority of both the Defense and the Interior Ministry. It has provided detachments for participation in international operations in Iraq and East Timor.

The United States maintains a military presence with 770 troops in the Lajes Air Base at Terceira Island, in the Azores. The Allied Joint Force Command Lisbon (JFC Lisbon) – one of the three main subdivisions of NATO's Allied Command Operations – it is based in Oeiras, near Lisbon.

In the 20th century, Portugal engaged in two major military interventions: World War I and the Portuguese Colonial War (1961–1974). After the end of the Portuguese Empire in 1975, the Portuguese Armed Forces have participated in peacekeeping missions in East Timor, Bosnia, Kosovo, Afghanistan, Somalia, Iraq (Nasiriyah) and Lebanon. Portugal also conducted several independent unilateral military operations abroad, as were the cases of the interventions of the Portuguese Armed Forces in Angola in 1992 and in Guinea - Bissau in 1998 with the main objectives of protecting and withdrawing of Portuguese and foreign citizens threatened by local civil conflicts.

Since the Carnation Revolution (1974) which culminated with the end of one of its most notable phases of economic expansion (that started in the 1960s), there has been a significant change in annual economic growth. After the turmoil of the 1974 revolution and the PREC period, Portugal has been trying to adapt itself to a changing modern global economy. Since the 1990s, Portugal's economic development model has been slowly changing from one based on public consumption to one focused on exports, private investment, and development of the high tech sector. Business services have overtaken more traditional industries such as textiles, clothing, footwear, cork (of which Portugal is the world's leading producer), wood products and beverages.

Most industry, business and finance are concentrated in Lisbon and Porto metropolitan areas. The districts of Aveiro, Braga, Coimbra, and Leiria are the biggest economic centers outside those two main metropolitan areas.

The Portuguese currency is the euro (€) and the country's economy has been in the eurozone from its beginning. Portugal's central bank is the Banco de Portugal, which is an integral part of the European System of Central Banks.

Agriculture in Portugal is based on small to medium sized family owned dispersed units. However, the sector also includes larger scale intensive farming export oriented agrobusinesses backed by companies (like Grupo RAR's Vitacress, Sovena, Lactogal, Vale da Rosa, Companhia das Lezírias and Valouro). The country produces a wide variety of crops and livestock products, including tomatoes, citrus, green vegetables, rice, corn, barley, olives, oilseeds, nuts, cherries, bilberry, table grapes, edible mushrooms, dairy products, poultry and beef. Forestry has also played an important economic role among the rural communities and industry (namely paper industry that includes Portucel Soporcel Group, engineered wood that includes Sonae Indústria, and furniture that includes several manufacturing plants in and around Paços de Ferreira, the core of Portugal's major industrial operations of IKEA). In 2001, the gross agricultural product accounted for 4 percent of the national GDP.

Traditionally a sea power, Portugal has had a strong tradition in the Portuguese fishing sector and is one of the countries with the highest fish consumption per capita. The main landing sites in Portugal (including Azores and Madeira), according to total landings in weight by year, are the harbours of Matosinhos, Peniche, Olhão, Sesimbra, Figueira da Foz, Sines, Portimão and Madeira. Portuguese processed fish products are exported through several companies under a number of different brands and registered trademarks like Ramirez, the World’s oldest canned fish producer still in operation, Bom Petisco, Nero, Combate, Comur, General, Líder, Manná, Murtosa, Pescador, Pitéu, Tenório, Torreira, Vasco da Gama, etc.

Portugal is a significant European minerals producer and is ranked among Europe's leading copper producers. It is also a noted producer of tin, tungsten and uranium. However, the country lacks hydrocarbon exploration potential, as well as aluminum, a feature that has hindered its mining and metallurgy sector's development. Although the country has vast iron and coal reserves, mainly in the north, after the '74 revolution and the consequent economy globalization, low competitiveness forced the decline of these minerals extraction. The Panasqueira and Neves - Corvo mines are among the most noted Portuguese mines in operation.

Industry is diversified, ranging from automobile (Volkswagen Autoeuropa, Peugeot Citroen), aerospace (Embraer), electronics and textiles, to food, chemicals, cement and wood pulp. Volkswagen Group's AutoEuropa motor vehicle assembly plant in Palmela is among the largest foreign direct investment projects in Portugal.

Modern non-traditional technology based industries like aerospace, biotechnology and information technology, have been developed in several locations across the country. Alverca, Covilhã, Évora, and Ponte de Sor are the main centers of Portuguese aerospace industry, which is led by Brazil based company Embraer and the Portuguese company OGMA. Since after the turn of the 21st century, many major biotechnology and information technology industries have been founded and are concentrated in the metropolitan areas of Lisbon, Porto, Braga, Coimbra and Aveiro.

Travel and tourism continue to become extremely important for Portugal, with visitor numbers forecast to increase significantly over the next years. However, there is increasing competition from Eastern European destinations such as Croatia who offer similar attractions, which are often cheaper. Consequently, the country is almost obligated to focus on its niche attractions such as health, nature and rural tourism in order to stay ahead of its competitors.

The banking and insurance sectors performed well until the late 2000s financial crisis, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting risks, both the life and non-life sectors, overall, are estimated to be able to withstand a number of severe shocks, even though the impact on individual insurers varies widely.

Major State owned companies include Águas de Portugal (water), Caixa Geral de Depósitos (banking), Comboios de Portugal (railways), Companhia das Lezírias (agriculture), CTT (postal services), RTP (media) and TAP Portugal (airline). Some of the former are managed by state run holding company Parpública, which is a shareholder of several companies, both public and private.

Companies listed on Euronext Lisbon stock exchange like EDP, Cimpor, Corticeira Amorim, Galp, Jerónimo Martins, Millennium bcp, Portucel Soporcel, Portugal Telecom and Sonae, are among the largest corporations of Portugal by number of employees, net income or international market share. The Euronext Lisbon is the major stock exchange of Portugal and is part of the NYSE Euronext, the first global stock exchange. The PSI-20 is Portugal's most selective and widely known stock index.

The Global Competitiveness Report for 2005, published by the World Economic Forum, placed Portugal's competitiveness in the 22nd position, but the 2008 - 2009 edition placed Portugal in the 43rd position out of 134 countries and territories. Research about quality of life by the Economist Intelligence Unit's quality of life survey placed Portugal as the country with the 19th best quality of life in the world for 2005, ahead of other economically and technologically advanced countries like France, Germany, the United Kingdom and South Korea, but 9 places behind its only neighbour, Spain. This is despite the fact that Portugal remains the country with the lowest per capita GDP in Western Europe.

The poor performance of the Portuguese economy was explored in April 2007 by The Economist, which described Portugal as "a new sick man of Europe". From 2002 to 2007, the unemployment rate increased by 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007). By early December 2009, unemployment had reached 10.2% – a 23 year record high. In December 2009, ratings agency Standard and Poor's lowered its long term credit assessment of Portugal to "negative" from "stable," voicing pessimism on the country's structural weaknesses in the economy and weak competitiveness that would hamper growth and the capacity to strengthen its public finances and reduce debt. In July 2011, ratings agency Moody's downgraded its long term credit assessment of Portugal after warning of deteriorating risk of default in March 2011.

Corruption has become an issue of major political and economic significance for the country. Some cases are well known and were widely reported in the media, such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power. Nevertheless the Transparency International report for 2010 places Portugal in 31st position in terms of perceived corruption, just below Israel and Spain, and 34 positions above Italy.

A report published in January 2011 by the Diário de Notícias, a leading Portuguese newspaper, demonstrated that in the period between the Carnation Revolution in 1974 and 2010, the democratic Portuguese Republic governments encouraged over expenditure and investment bubbles through unclear public-private partnerships. This has funded numerous ineffective and unnecessary external consultancy and advising committees and firms, allowed considerable slippage in state managed public works, inflated top management and head officers' bonuses and wages, causing a persistent and lasting recruitment policy that boosted the number of the expensive and highly privileged redundant public servants. In addition to risky credit and out of control public debt creation, the state run services and departments mismanaged a wealth of European structural and cohesion funds for almost four decades. Apparently, the Prime Minister Sócrates's cabinet was not able to forecast or prevent any of this when symptoms first appeared in 2005, and in 2011 the country was on the verge of bankruptcy.

If analysed under a wider time span, the convergence of the Portuguese economy to EU levels has been impressive, especially from 1986 to the early 2000s (decade). According to Barry (2003), "what appears to have been crucial in the Portuguese case, relative to Spain at least, is the degree of labor market flexibility that the economy exhibits.... Thus Portuguese convergence has been impressive, even though, consistent with its relatively low human capital stock, the economy has specialized in low tech production."

On 6 April 2011 Prime Minister José Sócrates announced on national television that the country would request financial assistance from the IMF and the European Financial Stability Facility, like Greece and the Republic of Ireland had done before. It was the third time that external financial aid was requested to the IMF – the first was in the late 1970s following the Carnation Revolution.

In October 2011, Moody's Investor Services downgraded nine Portuguese banks, blaming financial weakness.

Although a developed country and a high income country, Portugal has the lowest GDP per capita in Western Europe and its population has one of the lowest incomes per head among member states of the European Union. According to Eurostat, in 2009, Portugal's GDP per capita stood at 80% of the EU27 average, the 10th lowest in the Union.

The average wage in Portugal is 1,039 € per month (net), and the minimum wage, which is regulated/ref by law, is €485 per month. Officially, in 2008 the unemployment rate decreased to 7.3% in the second quarter of 2008. However, it immediately rose again to higher rates. Influenced by events worldwide, by December 2009, unemployment had surpassed the 10% mark nationwide, by 2010, it was about 11%, and in 2011 it was above 12%. As of March 2012, the unemployment rate is at 14.8%.

Portugal is among the 20 most visited countries in the world, receiving an average of 13 million foreign tourists each year. Tourism is playing an increasingly important role in Portugal's economy, contributing to about 5% of its Gross Domestic Product (GDP).

Tourist hotspots in Portugal are Lisbon, Algarve and Madeira, but the Portuguese government continues to promote and develop new tourist destinations, such as the Douro Valley, the island of Porto Santo and Alentejo. Lisbon is, after Barcelona, the European city which attracts the most tourists (with seven million tourists occupying the city's hotels in 2006, a number that grew 11.8% compared to previous year). Lisbon in recent years surpassed the Algarve as the leading tourist region in Portugal. Porto and Northern Portugal, especially the urban areas north of Douro River valley, was the tourist destination which grew most (11.9%) in 2006, surpassing Madeira (in 2010), as the third most visited destination.

Most tourists in Portugal are British, Spanish or German origin visitors, travel by low cost airliners, and not only seek sun and beaches, but increasingly search for cultural, gastronomic, environmental or nautical experiences (or travel for reasons of business).

The main tourist regions can be broken down into: the Greater Lisbon (Portuguese: Lisboa), the Algarve, Greater Porto and Northern Portugal (Portuguese: Porto and Norte), the Portuguese Islands (Portuguese: Ilhas Portuguesas: Madeira and Azores) and Alentejo. Other tourist regions include Douro Sul, Templários, Dão-Lafões, Costa do Sol, Costa Azul, Planície Dourada, that are unknown to many tourists or visitors.

Most of these regions are grouped in tourism reference areas, which continue to be in a state of reorganization and evolution, some based on the traditional regions of Portugal: the Costa Verde (Green Coast); Costa da Prata (Silver Coast)); Costa de Lisboa (Lisbon Coast); Montanhas (Mountains); Planícies (Plains); Algarve; and the islands of the archipelagos of Madeira and the Azores.

By the early 1970s Portugal's fast economic growth with increasing consumption and purchase of new automobiles set the priority for improvements in transportation. Again in the 1990s, after joining the European Economic Community, the country built many new motorways. Today, the country has a 68,732 km (42,708 mi) road network, of which almost 3,000 km (1,864 mi) are part of system of 44 motorways. Opened in 1944, the first motorway (which linked Lisbon to the National Stadium) was an innovative project that made Portugal among one of the first countries in the world to establish a motorway (this roadway eventually became the Lisbon - Cascais highway, or A5). But, although a few other tracts were created (around 1960 and 1970), it was only after the beginning of the 1980s that large-scale motorway construction was implemented. In 1972, Brisa, the highway concessionaire, was founded to handle the management of many of the regions motorways. On many highways, toll needs to be paid, see Via Verde. Vasco da Gama bridge is the longest bridge in Europe.

Continental Portugal's 89,015 km² (34,369 sq mi) territory is serviced by three international airports located near the principal cities of Lisbon, Porto, Faro and Beja. Lisbon's geographical position makes it a stopover for many foreign airlines at several airports within the country. The primary flag carrier is TAP Portugal, although many other domestic airlines provide services within and without the country. The government decided to build a new airport outside Lisbon, in Alcochete, to replace Lisbon Portela Airport. Currently, the most important airports are in Lisbon, Porto, Faro, Funchal (Madeira) and Ponta Delgada (Azores), managed by the national airport authority group ANA – Aeroportos de Portugal.

A national railway system that extends throughout the country and into Spain, is supported and administered by Comboios de Portugal. Rail transport of passengers and goods is derived using the 2,791 km (1,734 mi) of railway lines currently in service, of which 1,430 km (889 mi) are electrified and about 900 km (559 mi) allow train speeds greater than 120 km/h (75 mph). The railway network is managed by the REFER while the transport of passengers and goods are the responsibility of Caminhos de Ferro Portugueses (CP), both public companies. In 2006 the CP carried 133 million passengers and 9,750,000 t (9,600,000 long tons; 10,700,000 short tons) of goods.

The major seaports are located in Leixões, Aveiro, Figueira da Foz, Lisbon, Setúbal, Sines and Faro.

The two largest metropolitan areas have subway systems: Lisbon Metro and Metro Sul do Tejo in the Lisbon Metropolitan Area and Porto Metro in the Porto Metropolitan Area, each with more than 35 km (22 mi) of lines. In Portugal, Lisbon tram services have been supplied by the Companhia de Carris de Ferro de Lisboa (Carris), for over a century. In Porto, a tram network, of which only a tourist line on the shores of the Douro remain, began construction on 12 September 1895 (a first for the Iberian Peninsula). All major cities and towns have their own local urban transport network, as well as taxi services.

Scientific and technological research activities in Portugal are mainly conducted within a network of R&D units belonging to public universities and state-managed autonomous research institutions like the INETI – Instituto Nacional de Engenharia, Tecnologia e Inovação and the INRB – Instituto Nacional dos Recursos Biológicos. The funding and management of this research system is mainly conducted under the authority of the Ministry of Science, Technology and Higher Education (MCTES) itself and the MCTES's Fundação para a Ciência e Tecnologia (FCT). The largest R&D units of the public universities by volume of research grants and peer reviewed publications, include biosciences research institutions like the Instituto de Medicina Molecular, the Centre for Neuroscience and Cell Biology, the IPATIMUP, the Instituto de Biologia Molecular e Celular and the Abel Salazar Biomedical Sciences Institute.

Among the largest non-state run research institutions in Portugal are the Instituto Gulbenkian de Ciência and the Champalimaud Foundation, a neuroscience and oncology research center, which in addition awards every year one of the highest monetary prizes of any science prize in the world. A number of both national and multinational high tech and industrial companies, are also responsible for research and development projects. One of the oldest learned societies of Portugal is the Sciences Academy of Lisbon, founded in 1779.

Iberian bilateral state supported research efforts include the International Iberian Nanotechnology Laboratory and the Ibercivis distributed computing platform, which are joint research programmes of both Portugal and Spain. Portugal is a member of several pan-European scientific organizations. These include the European Space Agency (ESA), the European Laboratory for Particle Physics (CERN), ITER and the European Southern Observatory (ESO).

Portugal has the largest aquarium in Europe, the Lisbon Oceanarium, and the Portuguese have several other notable organizations focused on science-related exhibits and divulgation, like the state agency Ciência Viva, a program of the Portuguese Ministry of Science and Technology to the promotion of a scientific and technological culture among the Portuguese population, the Science Museum of the University of Coimbra, the National Museum of Natural History at the University of Lisbon, and the Visionarium.

With the emergence and growth of several science parks throughout the world that helped create many thousands of scientific, technological and knowledge based businesses, Portugal started to develop several science parks across the country. These include the Taguspark (in Oeiras), the Coimbra iParque (in Coimbra), the biocant (in Cantanhede), the Madeira Tecnopolo (in Funchal), Sines Tecnopolo (in Sines), Tecmaia (in Maia) and Parkurbis (in Covilhã). Companies locate in the Portuguese science parks to take advantage of a variety of services ranging from financial and legal advice through to marketing and technological support.

Egas Moniz, a Portuguese physician who developed the cerebral angiography and leucotomy, received in 1949 the Nobel Prize in Physiology or Medicine – he is the first Portuguese recipient of a Nobel Prize and the only in the sciences.

The European Innovation Scoreboard 2011, placed Portugal based innovation in the 15th position, with an impressive increase in innovation expenditure and output.

Portugal has considerable resources of wind and river power, the two most cost effective renewable sources. Since the turn of the 21st century, there has been a trend towards the development of a renewable resource industry and reduction of both consumption and use of fossil fuel resources. In 2006, the world's largest solar power plant at that date, the Moura Photovoltaic Power Station, began operating near Moura, in the south, while the world's first commercial wave power farm, the Aguçadoura Wave Farm, opened in the Norte region (2008). By the end of 2006, 66% of the country's electrical production was from coal and fuel power plants, while 29% were derived from hydroelectric dams, and 6% by wind energy. In 2008, renewable energy resource methods began to produce 43% of the nation's consumption of electricity, even as hydroelectric production decreased with severe droughts. As of June 2010, electricity exports had outnumbered imports. In the period between January and May 2010, 70% of the national production of energy came from renewable sources.

Portugal’s national energy transmission company, Redes Energéticas Nacionais (REN), uses sophisticated modeling to predict weather, especially wind patterns, and computer programs to calculate energy from the various renewable energy plants. Before the solar/wind revolution, Portugal had generated electricity from hydropower plants on its rivers for decades. But new programs combine wind and water: wind driven turbines pump water uphill at night, the most blustery period; then the water flows downhill by day, generating electricity, when consumer demand is highest. Portugal’s distribution system is also now a two way street. Instead of just delivering electricity, it draws electricity from even the smallest generators, like rooftop solar panels. The government aggressively encouraged such contributions by setting a premium price for those who buy rooftop generated solar electricity.

The Instituto Nacional de Estatística (Portuguese: National Institute of Statistics) estimates that, according to the 2011 census, the population was 10,562,178 (of which 52% was female, 48% was male). This population has been relatively homogeneous for most of its history: a single religion (Catholicism) and a single language have contributed to this ethnic and national unity, namely after the expulsion of the Moors, Moriscos and Sephardi Jews.

Native Portuguese are an Iberian ethnic group, whose ancestry is very similar to other Western and Southern Europeans and Mediterranean peoples, in particular Spaniards, with whom they share a common ancestry, history and cultural proximity.

The most important demographic influence in the modern Portuguese seems to be the oldest one; current interpretation of Y-chromosome and mtDNA data suggests that the Portuguese have their origin in Paleolithic peoples that began arriving to the European continent around 45,000 years ago. All subsequent migrations did leave an impact, genetically and culturally, but the main population source of the Portuguese is still Paleolithic. Studies of mitochondrial DNA suggest that 7% and 5-9% of modern Portuguese have some North and Sub-Saharan African ancestry, respectively.

Portugal's colonial history has long since been a cornerstone of its national identity, as has its geographic position at the southwestern corner of Europe, looking out into the Atlantic Ocean. It was the last western colonial European powers to give up its overseas territories (among them Angola and Mozambique in 1975), turning over the administration of Macau to the People's Republic of China at the end of 1999. Consequently, it has both influenced and been influenced by cultures from former colonies or dependencies, resulting in immigration from these former territories for both economic and/or personal reasons. Portugal, long a country of emigration (the vast majority of Brazilians have some Portuguese ancestry), has now become a country of net immigration, and not just from the last Indian (Portuguese until 1961), African (Portuguese until 1975), and Far East Asian (Portuguese until 1999) overseas territories. An estimated 800,000 Portuguese returned to Portugal as the country's African possessions gained independence in 1975. By 2007, Portugal had 10,617,575 inhabitants of whom about 332,137 were legal immigrants.

Since the 1990s, along with a boom in construction, several new waves of Ukrainian, Brazilian, people from the former Portuguese colonies in Africa and other Africans have settled in the country. Romanians, Moldovans and Chinese have also chosen Portugal as destination. Portugal's Romani population, estimated at about 40,000, offers another element of ethnic diversity. Most Romanis congregate with similar ethnic groups in the southern parts of the country and sell clothing and handicrafts in rural markets.

In addition, a number of EU citizens, mostly from the United Kingdom, northern European or Nordic countries, have become permanent residents in the country (with the British community being mostly composed of retired pensioners and choosing to live in the Algarve and Madeira).

According to the 2011 Census, 81% of the Portuguese population are Roman Catholic while 3.3% follow other Christian denominations. Some 6.8% of the population declared themselves to be non-religious. In addition, the country has small Protestant, Mormon, Muslim, Hindu, Sikh, Christian Orthodox, Jehovah's Witnesses, Baha'i, Buddhist and Jewish communities.

Many Portuguese holidays, festivals and traditions have a Christian origin or connotation. Although relations between the Portuguese state and the Roman Catholic Church were generally amiable and stable since the earliest years of the Portuguese nation, their relative power fluctuated. In the 13th and 14th centuries, the church enjoyed both riches and power stemming from its role in the reconquest, its close identification with early Portuguese nationalism and the foundation of the Portuguese educational system, including the first university. The growth of the Portuguese overseas empire made its missionaries important agents of colonization, with important roles in the education and evangelization of people from all the inhabited continents. The growth of liberal and nascent republican movements during the eras leading to the formation of the First Portuguese Republic (1910-26) changed the role and importance of organized religion.

Portuguese is the official language of Portugal. Portuguese is a Romance language that originated in what is now Galicia (Spain) and Northern Portugal, from the Galician - Portuguese language. It is derived from the Latin spoken by the romanized Pre-Roman peoples of the Iberian Peninsula around 2000 years ago. In the 15th and 16th centuries, it spread worldwide as Portugal established a colonial and commercial empire (1415 - 1999). In the present day, Portuguese is spoken as a native language on 4 different continents, with Brazil accounting for the largest number of native Portuguese speakers in any country.

The educational system is divided into preschool (for those under age 6), basic education (9 years, in three stages, compulsory), secondary education (3 years, until 12th grade), and higher education (university and polytechnic).

The total adult literacy rate is 99 percent. Portuguese primary school enrollments are close to 100 percent. According to the OECD's Programme for International Student Assessment (PISA) 2009, the average Portuguese 15 year old student, when rated in terms of reading literacy, mathematics and science knowledge, is placed at the same level as those students from the United States, Sweden, Germany, Ireland, France, Denmark, United Kingdom, Hungary and Taipei, with 489 points (493 is the average). Over 35% of college age citizens (20 years old) attend one of the country's higher education institutions (compared with 50% in the United States and 35% in the OECD countries). In addition to being a destination for international students, Portugal is also among the top places of origin for international students. All higher education students, both domestic and international, totaled 380,937 in 2005.

Portuguese universities have existed since 1290. The oldest Portuguese university was first established in Lisbon before moving to Coimbra. Historically, within the scope of the Portuguese Empire, the Portuguese founded in 1792 the oldest engineering school of Latin America (the Real Academia de Artilharia, Fortificação e Desenho), as well as the oldest medical college in Asia (the Escola Médico - Cirúrgica de Goa) in 1842. The largest university in Portugal is the University of Porto. Universities are usually organized into faculties.

Institutes and schools are also common designations for autonomous subdivisions of Portuguese higher education institutions. The Bologna process has been adopted since 2006 by Portuguese universities and polytechnical institutes. Higher education in state run educational establishments is provided on a competitive basis, a system of numerus clausus is enforced through a national database on student admissions. However, every higher education institution offers also a number of additional vacant places through other extraordinary admission processes for sportsmen, mature applicants (over 23 years old), international students, foreign students from the Lusosphere, degree owners from other institutions, students from other institutions (academic transfer), former students (readmission), and course change, which are subject to specific standards and regulations set by each institution or course department. Most student costs are supported with public money. However, with the increasing tuition fees a student has to pay to attend a Portuguese state run higher education institution and the attraction of new types of students (many as part time students or in evening classes) like employees, businessmen, parents and pensioners, many departments make a substantial profit from every additional student enrolled in courses, with benefits for the college or university's gross tuition revenue and without loss of educational quality (teacher per student, computer per student, classroom size per student, etc.).

Portugal has entered into cooperation agreements with MIT (US) and other North American institutions to further develop and increase the effectiveness of Portuguese higher education and research.

According to the latest Human Development Report, the average life expectancy in 2011 was 79.5 years.

The Portuguese health system is characterized by three coexisting systems: the National Health Service (NHS), special social health insurance schemes for certain professions (health subsystems) and voluntary private health insurance. The NHS provides universal coverage. In addition, about 25% of the population is covered by the health subsystems, 10% by private insurance schemes and another 7% by mutual funds.

The Ministry of Health is responsible for developing health policy as well as managing the NHS. Five regional health administrations are in charge of implementing the national health policy objectives, developing guidelines and protocols and supervising health care delivery. Decentralization efforts have aimed at shifting financial and management responsibility to the regional level. In practice, however, the autonomy of regional health administrations over budget setting and spending has been limited to primary care.

The NHS is predominantly funded through general taxation. Employer (including the state) and employee contributions represent the main funding sources of the health subsystems. In addition, direct payments by the patient and voluntary health insurance premiums account for a large proportion of funding.

Similar to the other Eur-A countries, most Portuguese die from noncommunicable diseases. Mortality from cardiovascular diseases (CVD) is higher than in the eurozone, but its two main components, ischaemic heart disease and cerebrovascular disease, display inverse trends compared with the Eur-A, with cerebrovascular disease being the single biggest killer in Portugal (17%). Portuguese people die 12% less often from cancer than in the Eur-A, but mortality is not declining as rapidly as in the Eur-A. Cancer is more frequent among children as well as among women younger than 44 years. Although lung cancer (slowly increasing among women) and breast cancer (decreasing rapidly) are scarcer, cancer of the cervix and the prostate are more frequent. Portugal has the highest mortality rate for diabetes in the Eur-A, with a sharp increase since the late 1980s.

Portugal's infant mortality rate has dropped sharply since the 1980s, when 24 of 1000 newborns died in the first year of life. It is now around 3 deaths per a 1000 newborns. This improvement was mainly due to the decrease in neonatal mortality, from 15.5 to 3.4 per 1000 live births.

People are usually well informed about their health status, the positive and negative effects of their behavior on their health and their use of health care services. Yet their perceptions of their health can differ from what administrative and examination based data show about levels of illness within populations. Thus, survey results based on self reporting at the household level complement other data on health status and the use of services. Only one third of adults rated their health as good or very good in Portugal (Kasmel et al., 2004). This is the lowest of the Eur-A countries reporting and reflects the relatively adverse situation of the country in terms of mortality and selected morbidity.

Portugal has developed a specific culture while being influenced by various civilizations that have crossed the Mediterranean and the European continent, or were introduced when it played an active role during the Age of Discovery. In the 1990s and 2000s (decade), Portugal modernized its public cultural facilities, in addition to the Calouste Gulbenkian Foundation established in 1956 in Lisbon. These include the Belém Cultural Center in Lisbon, Serralves Foundation and the Casa da Música, both in Porto, as well as new public cultural facilities like municipal libraries and concert halls that were built or renovated in many municipalities across the country.

Traditional architecture is distinctive and include the Manueline, also known as Portuguese late Gothic, a sumptuous, composite Portuguese style of architectural ornamentation of the first decades of the 16th century. A 20th-c. interpretation of traditional architecture, Soft Portuguese style, appears extensively in major cities, especially Lisbon. Modern Portugal has given the world renowned architects like Eduardo Souto de Moura, Álvaro Siza Vieira (both Pritzker Prize winners) and Gonçalo Byrne. In Portugal Tomás Taveira is also noteworthy, particularly for stadium design.

Portuguese cinema has a long tradition, reaching back to the birth of the medium in the late 19th century. Portuguese film directors such as Arthur Duarte, António Lopes Ribeiro, Pedro Costa, Manoel de Oliveira, António - Pedro Vasconcelos, João César Monteiro, João Botelho and Leonel Vieira, are among those that gained notability. Noted Portuguese film actors include Joaquim de Almeida, Daniela Ruah, Maria de Medeiros, Diogo Infante, Soraia Chaves, Vasco Santana, Ribeirinho, António Silva, Lúcia Moniz, among many others.

Portuguese literature, one of the earliest Western literatures, developed through text as well as song. Until 1350, the Portuguese - Galician troubadours spread their literary influence to most of the Iberian Peninsula. Gil Vicente (ca. 1465 - ca. 1536), was one of the founders of both Portuguese and Spanish dramatic traditions.

Adventurer and poet Luís de Camões (ca. 1524 - 1580) wrote the epic poem "Os Lusíadas" (The Lusiads), with Virgil's Aeneid as his main influence. Modern Portuguese poetry is rooted in neoclassic and contemporary styles, as exemplified by Fernando Pessoa (1888 - 1935). Modern Portuguese literature is represented by authors such as Almeida Garrett, Camilo Castelo Branco, Eça de Queiroz, Fernando Pessoa, Sophia de Mello Breyner Andresen, António Lobo Antunes and Miguel Torga. Particularly popular and distinguished is José Saramago, recipient of the 1998 Nobel Prize in Literature.

Portuguese cuisine is diverse. The Portuguese consume a lot of dry cod (bacalhau in Portuguese), for which there are hundreds of recipes. There are more than enough bacalhau dishes for each day of the year. Two other popular fish recipes are grilled sardines and caldeirada, a potato-based stew that can be made from several types of fish. Typical Portuguese meat recipes, that may be made out of beef, pork, lamb, or chicken, include cozido à portuguesa, feijoada, frango de churrasco, leitão (roast suckling pig) and carne de porco à alentejana, a very popular northern dish is the arroz de sarrabulho (rice stewed in pigs blood) or the arroz de cabidela (Rice and chickens meat stewed in chickens blood).

Typical fast food dishes include the francesinha from Porto, and bifanas (grilled pork) or prego (grilled beef) sandwiches, which are well known around the country. The Portuguese art of pastry has its origins in Middle Ages Catholic monasteries widely spread across the country. These monasteries, using very few ingredients (mostly almonds, flour, eggs and some liquor), managed to create a spectacular wide range of different pastries, of which pastéis de Belém (or pastéis de nata) originally from Lisbon, and ovos moles from Aveiro are examples. Portuguese cuisine is very diverse, with different regions having their own traditional dishes. The Portuguese have a culture of good food and throughout the country there are myriad good restaurants and small typical tascas.

Portuguese wines have deserved international recognition since the times of the Roman Empire, which associated Portugal with their god Bacchus. Today the country is known by wine lovers and its wines have won several international prizes. Some of the best Portuguese wines are: Vinho Verde, Vinho Alvarinho, Vinho do Douro, Vinho do Alentejo, Vinho do Dão, Vinho da Bairrada and the sweet: Port Wine, Madeira Wine and the Moscatel from Setúbal and Favaios. Port Wine is well known around the world and the most widely known wine type in the world. The Douro wine region is the oldest in the world.

Portuguese music encompasses a wide variety of genres. The most renowned is fado, a melancholy urban music, usually associated with the Portuguese guitar and saudade, or longing. Coimbra fado, a unique type of fado, is also noteworthy. Internationally notable performers include Amália Rodrigues, Carlos Paredes, José Afonso, Mariza, Carlos do Carmo, António Chainho, Mísia and Madredeus.

In addition to fado and folk, the Portuguese listen to pop and other types of modern music, particularly from North America and the United Kingdom, as well as a wide range of Portuguese and Brazilian artists and bands. Artists with international recognition include Moonspell, Buraka Som Sistema, Blasted Mechanism and The Gift, with the two latter being nominees for a MTV Europe Music Award.

Portugal has several summer music festivals, such as Festival Sudoeste in Zambujeira do Mar, Festival de Paredes de Coura in Paredes de Coura, Festival Vilar de Mouros near Caminha, Boom Festival in Idanha - a - Nova Municipality, and Optimus Alive!, Rock in Rio Lisboa and Super Bock Super Rock in Greater Lisbon. Out of the summer season, Portugal has a large number of festivals, designed more to an urban audience, like Flowfest or Hip Hop Porto. Furthermore, one of the largest international Goa trance festivals takes place in central Portugal every two years, the Boom Festival, that is also the only festival in Portugal to win international awards: European Festival Award 2010 – Green 'n' Clean Festival of the Year and the Greener Festival Award Outstanding 2008 and 2010. There is also the student festivals of Queima das Fitas are major events in a number of cities across Portugal. In 2005, Portugal held the MTV Europe Music Awards, in Pavilhão Atlântico, Lisbon.

Fandango is one of the most popular regional dances.

In the Classical music domain, Portugal is represented by names as the pianist Artur Pizarro, Maria João Pires, Sequeira Costa, the violinists Carlos Damas, Gerardo Ribeiro and in the past by the great cellist Guilhermina Suggia. Notable composers include José Vianna da Motta, Carlos Seixas, João Domingos Bomtempo, João de Sousa Carvalho, Luís de Freitas Branco and his student Joly Braga Santos, Fernando Lopes - Graça, Emmanuel Nunes and Sérgio Azevedo.

It has also a rich history as far as painting is concerned. The first well known painters date back to the 15th century – like Nuno Gonçalves – were part of the Gothic painting period. José Malhoa, known for his work Fado, and Columbano Bordalo Pinheiro (who painted the portraits of Teófilo Braga and Antero de Quental) were both references in naturalist painting.

The 20th century saw the arrival of Modernism, and along with it came the most prominent Portuguese painters: Amadeo de Souza - Cardoso, who was heavily influenced by French painters, particularly by the Delaunays. Among his best known works is Canção Popular a Russa e o Fígaro. Another great modernist painter/writer was Almada Negreiros, friend to the poet Fernando Pessoa, who painted his (Pessoa's) portrait. He was deeply influenced by both Cubist and Futurist trends. Prominent international figures in visual arts nowadays include painters Vieira da Silva, Júlio Pomar, Helena Almeida, Joana Vasconcelos, Julião Sarmento and Paula Rego.

Football is the most popular sport in Portugal. There are several football competitions ranging from local amateur to world class professional level. The legendary Eusébio is still a major symbol of Portuguese football history. FIFA World Player of the Year winners Luís Figo and Cristiano Ronaldo, are among the numerous examples of other world class football (soccer) players born in Portugal and noted worldwide. Portuguese football managers are also noteworthy, with José Mourinho, André Villas - Boas, Fernando Santos, Carlos Queiroz and Manuel José among the most renowned.

The Portuguese national football team has titles in the FIFA World Youth Championship and in the UEFA youth championships. The main national team – Selecção Nacional – won the Euro 2016, finished second in Euro 2004 (held in Portugal), reached the third place in the 1966 FIFA World Cup, and reached the fourth place in the 2006 FIFA World Cup, their best results in major competitions to date.

SL Benfica, FC Porto, and Sporting CP are the largest sports clubs by popularity and by number of trophies won, often known as "os três grandes" ("the big three"). They have 12 titles won in the European UEFA club competitions, were present in many finals and have been regular contenders in the last stages almost every season. Other than football, many Portuguese sports clubs, including the "big three", compete in several other sports events with a varying level of success and popularity, these may include roller hockey, basketball, futsal, handball and volleyball.

Portugal has a successful roller hockey team, with 15 world titles and 20 European titles, making it the country with the most wins in both competitions. The most successful Portuguese roller hockey clubs in the history of European championships are Futebol Clube do Porto, Sporting Clube de Portugal, Sport Lisboa e Benfica and Óquei de Barcelos.

The Portuguese national rugby union team made a dramatic qualification into the 2007 Rugby World Cup and became the first all amateur team to qualify for the World Cup since the dawn of the professional era. The Portuguese national rugby sevens team has performed well, becoming one of the strongest teams in Europe, and proved their status as European champions in several occasions.

In athletics, the Portuguese have won a number of gold, silver and bronze medals in the European, World and Olympic Games competitions. Cycling, with Volta a Portugal being the most important race, is also a popular sports event and include professional cycling teams such as Sport Lisboa e Benfica, Boavista, Clube de Ciclismo de Tavira and União Ciclista da Maia.

The country has also achieved notable performances in sports like fencing, judo, kitesurf, rowing, sailing, surfing, shooting, triathlon and windsurf, owning several European and world titles. The paralympic athletes have also conquered many medals in sports like swimming, boccia and wrestling.

In motorsport, Portugal is internationally noted for the Rally of Portugal, and the Estoril, Algarve Circuits and the revived Porto Street Circuit which holds a stage of the WTCC every two years, as well as for a number of internationally noted pilots in varied motorsports.

In equestrian sports, Portugal won the only Horseball - Pato World Championship (in 2006), achieved the third position in the First Horseball World Cup (organized in Ponte de Lima, Portugal, in 2008), and has achieved several victories in the European Working Equitation Championship.

In swimming sports, Portugal has two major sports: swimming and water polo.

Northern Portugal has its own original martial art, Jogo do Pau, in which the fighters use staffs to confront one or several opponents.

Other popular sport related recreational outdoor activities with thousands of enthusiasts nationwide include airsoft, fishing, golf, hiking, hunting and orienteering.