Portugal
Long march towards Europe

Almost forty years elapsed between the participation of Portugal in the Organization for European Economic Cooperation in 1948 and its accession to the European Community (EC) in 1986. The period of transition to full EC membership will extend until 1996: Portugal will therefore have participated in institutions of European cooperation for almost half a century before becoming a full partner in the Community. In Discussion Paper No. 163, Research Fellow Jorge de Macedo argues that this protracted transition can be explained by the peculiar nature of Portugal's commitment: its domestic policy was dominated by objectives which were potentially inconsistent with European integration.

In the period between 1948 and 1974, the objective of policy was to seek greater economic integration between Portugal and her overseas dependencies. Despite this objective and Portugal's limited political contact with EC governments, economic interdependence with Europe grew. Portugal joined the European Free Trade Association in 1960, and increasingly she exported manufactures to her EFTA partners and labour to the EC, in exchange for EC imports and gold. Paradoxically, economic interdependence between Portugal and the EC grew at a time when political responsiveness was low.

Since 1974, political contacts between the young Portuguese democracy and the EC have grown but economic interdependence has disminished, as a result partly of new domestic policy objectives. After the demise of the authoritarian regime, the process of constructing socialism transformed 'national pride' into 'state pride', de Macedo argues. The higher political responsiveness of the EC was more than offset by the economic consequences of 'state pride', such as the increased burden of an enlarged public sector (including state-owned enterprises), whose borrowing requirement is much too high a percentage of output. One lasting effect of this politicization is that economic activity in Portugal has generally been inversely correlated with the world business cycle, which is unusual in a small, open market economy.

De Macedo argues that European economic difficulties were the major cause of delay during the last leg of Portugal's long transition. He concludes that in order to reconcile full Portuguese membership with a preservation of its cultural identity the EC must increase its interdependence with the economies of Africa, Asia and America, instead of drifting towards 'Europrotectionism'.


Portugal and Europe: The Longest Transition
Jorge Braga de Macedo

Discussion Paper No. 163, March 1987 (IM/IT)