Portugal flag

Portugal country brief

Located in south-western Europe on the Iberian Peninsula, Portugal has a 1,793 km border to the west with the North Atlantic Ocean and a 1,214 km border with Spain to the north and east. Portugal is home to around 10.5million people. The capital is Lisbon.

Portugal is a democratic republic with a unicameral parliamentary system. It became a republic after the monarchy was deposed in 1910. Portugal is a founding member of NATO and entered the European Community, now the European Union (EU), in 1986. In January 2011, Portugal assumed a non-permanent seat on the UN Security Council for the 2011-12 term.

Bilateral relations

Portugal has an Embassy in Canberra and a Consulate-General in Sydney. Australia has an Embassy in Lisbon.

A shared interest in the future of East Timor is a key element in the bilateral relationship between Australia and Portugal.Australia and Portugal are the two largest donor countries and work closely together to ensure a coordinated approach to development assistance.

Community, cultural and educational links

Portuguese migrants from the island of Madeira settled in Fremantle in Western Australia in the 1950s and established a fishing community of6,000 people.Portuguese migration to Australia has, however, mostly occurred since the late 1960s. According to the 2011 Census, 15,328 Portuguese-born live in Australia and46,519 claim Portuguese ancestry.The majority of Portuguese migrants have settled in Sydney, Wollongong, Newcastle, Melbourne, Perth and Fremantle.

The presence of a Portuguese community in Australia has produced a steady flow of family visits and cultural exchanges in recent decades.

There has been a steady increase in the number of Portuguese students choosing Australia as a study destination.In 2011, 960 student visas were issued to Portuguese students.

BairroPortuguês: Petersham Food & Wine Fair – Sydney

Every year in March since 2003, Petersham's Audley Street has transformed into a Portuguese Quarter or BairroPortuguês, highlighting Portuguese culture. The streets come alive with a party atmosphere, featuring contemporary and traditional Portuguese and Brazilian dancing and music, wine tastingand stalls serving Portuguese and Brazilian cuisine.

Trade and investment

Two-way merchandise trade between Australia and Portugal was A$164 million in 2011. The balance of trade remains in Portugal's favour, with exports to Australia amounting to A$148 million – principally exports of passenger motor vehicles (A$37 million), cork manufactures (A$16 million), and furniture, mattresses and cushions (A$13 million). Australia rates as Portugal's 47thbiggest export destination and 82ndbiggest source of imports.

As of 2011, Australian investment in Portugal totalled A$223 million and Portuguese investment in Australia was A$22 million. Portuguese companies have mainly invested in plants in Australia to manufacture wine closures from Portuguese cork, as well as in the timber, veterinary, wine, pharmaceutical and biotechnology industries.

Bilateral agreements

Australia and Portugal signed a bilateral social security agreement in Lisbon in 2001, which entered into force in 2002. The agreementprovidesimproved social security protection to people who have lived and/or worked in both Australia and Portugal.The agreement also exempts Australian employers from the need to provide Portuguese social security support for Australian employees sent temporarily to work in Portugal, provided the employee remains covered in Australia by compulsory superannuation arrangements.

Portugal and Australia have also signed aTreaty of Extradition, a Treaty on Mutual Assistance in Criminal Matters and an Agreement on Employment of the Spouses and Dependants of Diplomatic and Consular Personnel.

As an EU member, Portugal has access to asimple online visitor visa service to travel to Australia, either for tourism or business purposes.Portugal grants Australian citizens visa-free access for visits of tourism, business (other than paidemployment)or official purposes of up to ninety days.

High-level visits (positions held at time of visit)

Political overview

The President of the Republic is directly elected for a maximum of two consecutive terms of five years. The President has no executive power, but can play a role in foreign policy and as a political arbiter, while maintaining political neutrality. The President is also the Commander-in-Chief of Portugal's armed forces.

In 2006 former Prime Minister, Aníbal Cavaco Silva, was elected as President in the first round of voting, obtaining 50.6 per cent of the vote. In January 2011 he was elected for a second term.

In 2009 the Socialist Party was returned to power under Prime Minister Socrates. However, having failed to secure passage of his austerity budget in March 2011, Socrates resigned. At the subsequent elections in June 2011, the centre-right Social Democrats, led by Pedro Passos Coelho, won enough seats to form a coalition government with the smaller Popular Party.

The Parliament, known in Portugal as the Assembly of the Republic, is a unicameral body composed of up to 230 members. The members are elected by universal suffrage, according to a system of proportional representation, and serve terms of four years, unless the President dissolves the Assembly and calls for new elections.

Foreign policy

The European Union (EU) is at the heart of Portuguese foreign and economic policies.Portugal was one of the Contracting States that established the EU in 1994. It has held the rotating six-monthly EU Presidency on three occasions: in 1992, 2000, and again in the second half of 2007.Portugal participates in the EU foreign policy agenda, particularly in relation to its former colonies in Africa, Latin America and Asia (East Timor and Macau). The highlight of Portugal's most recent Presidency was the signature of the EU Reform Treaty (the "Lisbon Treaty") by all 27 member countries in December 2007 and the holding of an EU-Africa Summit in Lisbon in 2007, the first in ten years. Former Portuguese Prime Minister Jose Manuel Durão Barroso has held the position of President of the European Commission since November 2004.

Portugal is a founding member of NATO and places a high priority on a strong transatlantic relationship. The United States has an air-force base at Terceiraisland in Portugal's Azores archipelago.

Portugal joined the United Nations in 1955 and since then it has on three occasions assumed a non-permanent seat at the UN Security Council (1979-80, 1997-98 and 2011-12).

Portugal is a signatory to the 1990 Convention applying the Schengen Agreement; a European inter-governmental arrangement on the elimination of border controls between signatory countries.

Portugal and East Timor

The former colony of East Timor remains an important foreign policy focus for Portugal. Portugal did not recognise the 1975 annexation of East Timor by Indonesia and pursued the cause of East Timorese independence in international forums for many years. In the subsequent period of the UN Transitional Authority, Portugal was engaged in helping East Timor in its transition to independence and the Portuguese Armed Forces have participated in UN Security Council-endorsed activities in East Timor.

The United Nations Police (UNPOL) makes up a major component of the United Nations Integrated Mission in Timor-Leste (UNMIT) and is currently headed by Police Commissioner Luis Carrilho, a Portuguese national. Portugal is the second largest contributor to policing operations in East Timor.The UNPOL Portuguese Formed Police Unit has 139 officers (May 2012). In addition to providing static security, riot control and dealing with civil disturbances, the Portuguese Unit provides close protection for government leaders and includes a water rescue and SWATteam. They also have specialised capacity to detonate unexploded ordnances.

Peacekeeping

In addition to East Timor, Portugal is a contributor to several peacekeeping operations, having 449 military officers deployed as of September 2012. In per capita terms, Portugal is a significant European contributor to international peacekeeping operations around the world. Portugal is contributing 133 troops (as of June 2012) to the International Security Assistance Force (ISAF) and two troops to the Operational Mentor and Liaison Team (OMLT) in Afghanistan. In addition to deploying troops under NATO, Portugal also contributes to both the UN and EU missions in Kosovo, Democratic Republic of Congo, Somalia, East Timor and Guinea Bissau, both with military and police officers.

Economic overview

Portugal has become a diversified and increasingly service-based economy since joining the EU (services now account for 75% of GDP and hire 65% of the labour force). The country qualified for the European Monetary Union (EMU) in 1998 and began circulating the Euro in 2002, along with 11 other EU member economies.

Economic growth has been weak since 2008. Portugal has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment. It has received structural funding from the EU and while this has helped it to upgrade its infrastructure, modernisation of its industry has been slow. Public finances have also become a significant concern in Portugal, like in other Eurozone countries.

Despite efforts to balance the government budget to comply with the EU's Stability and Growth Pact (through spending cuts and a significant privatisation program), the deficit remained at just under 10 per cent of GDP in 2010. In May 2011, former Prime Minister Socrates secured an EU-IMF bailout package valued at around €80 billion to address international concerns about Portugal's national debt. In return for the loan, which covers the period 2011-14, Portugal is expected to further reduce its deficit by a substantial amount. While some progress has been made - through a combination of spending cuts, tax increases and other reforms - it remains to be seen whether the targets will be met.

In the meantime the Portuguese economy has fallen into a serious recession. The economy shrank by around 1.6% in 2011 and is expected to contract further in 2012 and 2013, only returning to growth in 2014 at the earliest. Unemployment is now around 15%, compared to 8% in 2007.

Foreign trade and investment

Portugal's principle export destinations and import sources are Spain, Germany and France. The United States, Brazil and Angola are Portugal's most important non-EU trading partners. The main Portuguese exports are machinery and equipment, as well as transportation materials and mineral fuels.

EU Member States are the main sources of foreign direct investment (FDI), particularly Luxembourg, Spain, the United Kingdom, France, the Netherlands and Germany. In 2011, FDI into Portugal was mainly in the wholesale and retail trade sector, for insurance and financial activities and manufacturing.In 2011, Portugal invested in insurance and financial activities (80% of total outward FDI) in the Netherlands (67%) and Spain, Brazil, Luxembourg and Angola, among other destinations.

Investment promotion remains a high priority for the government, as well as exporting to overseas markets.Nowadays economic diplomacy is one of the major goals of Portuguese foreign policy. In 2011 the Portuguese Agency for Investment and External Trade (Agênciapara o Investimento e ComércioExterno) was placed under the umbrella of the Portuguese Ministry of Foreign Affairs. Portugal wants to diversify its traditional business partners, focusing more on the Middle East, Asia and Latin America. It is also seeking to attract investment involving technology transfer in sectors like information and communications technologies, biotechnology and renewable sources of energy.

Updated October 2012