PORTUGAL

In both law and in fact, individuals and political parties enjoy largely equal opportunities to register for and to run in elections. The laws are adhered to in reality.
Parties espousing racist, fascist or regionalist values are all constitutionally prohibited, as are parties whose names are directly related to specific religious communities. Moreover, while independent citizen lists can run in municipal elections, they are barred from contesting legislative elections.
The requirements for running in elections are relatively onerous. Candidates for legislative elections must be affiliated with a party. This has been a feature of Portuguese democracy since its very outset, facilitating the consolidation of the Portuguese party system and reinforcing parties’ hold on the political system. While there is no consistent movement advocating an end to this situation, a poll carried out in April 2009 showed that the overwhelming majority of Portuguese (78%) considers that independent lists should also be allowed to contest parliamentary elections.
Parties require the legally verified signatures of 7,500 voters to be formed. However, this did not impede four new parties from running in the September 2009 legislative elections. Moreover, the number of parties contesting the 2009 legislative elections increased vis-à-vis the 2005 elections, from 11 to 16.
Moreover, the most restrictive elements of the legislation are largely moot. The barring of parties is relatively rare, having occurred most recently in 1995. Indeed, a small extreme-right party (Partido Nacional Renovador) was allowed to contest the 2009 legislative and local elections. Moreover, after the Constitutional Court considered enforcing a 2003 political party legislative provision stipulating that parties with fewer than 5,000 party members should be disbanded – an action that, in 2008, would have affected virtually all parties aside from those with parliamentary representation – the legislation was changed in May 2008 to remove this condition.

Parties have access to broadcast time on television and radio for political purposes during election campaign periods. This time is divided equally among the parties, according to the number of candidates they field. Parties need to present lists in at least 25% of electoral districts, and field a total of candidates equal to at least one-quarter of the total number of possible candidates, in order to qualify for these broadcasts. However, despite airing in prime time, these short broadcasts (lasting a maximum of three minutes for each party) do not attract much of an audience. Thus, in September 2009, none of the political broadcast segments for the legislative elections of that month were in the top 20 most-watched television programs of that month.
In practice, the party political broadcasts serve as the only certain media platform for smaller parties (of which there were 11 in the 2009 legislative election). Party access to media news programs and political debates is overwhelmingly concentrated on the five parties that have parliamentary representation (the Socialist Party (PS), the Social Democratic Party (PSD), the Democratic and Social Center/Popular Party (CDS-PP), the Left Bloc (BE) and the Unitarian Democratic Coalition (CDU)). Thus, before the 2009 legislative elections, a total of 10 debates took place between the leaders of these main parties, with each debate featuring two leaders. The leaders of the remaining 11 smaller parties had only one televised debate, in which all participated. As such, the coverage in televised debates was some 10 times greater for the main parties than for their smaller counterparts. These debates drew considerable attention in the 2009 legislative elections, with four featuring in the top 20 most-watched television programs of September 2009. Television news coverage – which is also popular in terms of TV ratings, and is the predominant source of information for the Portuguese – is also heavily concentrated on the five main parties.

All adult citizens are guaranteed the right to participate in national elections, and this right is respected in practice. The government even provides transportation to those requiring it. Citizens in hospitals and in jail are also assisted in being able to vote, and Portuguese citizens living abroad are similarly eligible. There is no observable discrimination.
As in the 2009 report, problems with substantial inflation of the electoral register remain. For the 2009 legislative elections, the register’s count stood at slightly above 1 million voters, thus inflating the abstention rate by more than seven percentage points. This is very high in comparative terms. Such inflated registers are often associated with risks of electoral fraud. However, this does not appear to be the case in Portugal.
The problem of inflated voter registration figures masking cases of non-registration, highlighted in the previous report, is being resolved. The implementation of new citizen cards, which began nationally in 2008, led to the adoption of a process of automatic registration. As these cards are more widely diffused, the proportion of nonregistered voters is likely to dwindle. However, the system continues to lack absentee voting options.

Oversight responsibility regarding political party funding lies with the Constitutional Court, which has a specific body to monitor party financing and accounts, the Entidade das Contas e Financiamentos Políticos (EFPC). There are two main sources of funds: First, the government proves funding based on the number of votes a political party has received in previous elections; second, parties can receive private contributions, which must be registered with party electoral commissions at the local, district and national levels.
Parties’ annual accounts and separate electoral campaign accounts are published on the EFPC website, and are scrutinized by this entity. As of the time of writing, assessments of the 2009 election campaign accounts had not yet been published. However, taking into account previous experience, we can conclude that:
(1) There remains scope for irregularities in party financing and campaign financing; and
(2) The EFPC assessments have led to a tighter control of party funding in recent years, which is positive. However, sanctions take place long after infractions are committed. This situation was reflected in fines issued by the court in the 2008 – 2010 period. Thus, in February 2008 the PSD was issued a substantial fine related to illegal funds provided by the Somague company, an event which took place in 2001. Likewise, in March 2010 the court issued fines of €30,000 to the PS and PSD, of €20,000 to the CDU, and of €14,000 to the CDS for irregularities in campaign financing, including illegal funding. Once again, these decisions came very late, stemming from the 2005 local elections.
Overall, the consensus is that oversight of party funding is tightening, but is not sufficient to control all infringements.

The Portuguese media system by and large continues to conform to the criteria of media independence. However, as in the 2009 report, there continue to be increasingly worrying signs of alleged and/or attempted government interference with media operations. In September 2009, a popular television news program was cancelled. That news program (Jornal Nacional de 6ª– JN6, of the private TVI channel) had been very critical of the prime minister, and had been leading high-profile investigations on an alleged corruption scandal dating to the time when the prime minister was minister of the environment, in 2001. Moreover, the program had a very polemic style of reporting, which many disliked.
The prime minister publicly expressed criticism of this news program several times in 2009. In April of that year, he accused the program during a prime-time interview of being “a travesty of journalism” and of heading a “manhunt.” In February 2009, during the Socialist Party congress, he alluded to “dark campaigns” against him, in which the media were included. Likewise, he stated that the government was chosen by the people, not the heads of TV channels, a reference widely interpreted even then as being aimed squarely at TVI.
The news program was due to return to the airwaves after the summer break on September 4, 2009, and had been promoted by its anchor heavily in the preceding days. However, it was cancelled on the day before airing (September 3), under circumstances that still today are not entirely clear. The TV channel said it decided to cancel the program to reinforce the homogeneity and consistency of its evening news program throughout the week (the Friday program was a ratings leader in its time slot, but it did also have a very grating and polemic style). However, the decision was not well received amongst the channel’s journalists – the news editorial team resigned, and the channel’s journalists signed a petition repudiating the cancellation. While the prime minister and the Socialist Party denied any involvement in the decision, other parties cried censorship, and argued that the TVI board’s decision was influenced by the government’s opinion.
These allegations gained further traction in early 2010. In June 2009, Portugal Telecom (in which the Portuguese state retains a “golden share” as well as some influence) was involved in a quickly aborted attempt to purchase TVI. At the time, the prime minister stated in parliament that he did not know of this deal, and two days later said the government would veto this purchase through use of its “golden share.” However, a corruption case involving a close ally of Sócrates was to reopen allegations of government interference, giving rise to allegations that Sócrates not only knew of the deal but it was the government that had orchestrated the deal to buy TVI in order to silence its criticism. No case was opened against Sócrates, who has strenuously denied the allegations. However, opposition parties see this as further evidence of attempts to control the media, and a poll carried out in March 2010 showed that the majority of Portuguese citizens thought the prime minister deliberately lied to parliament. In an unprecedented move, the opposition parties voted for the opening of a commission of inquiry to investigate the prime minister’s involvement in the PT/TVI deal. This commission, which began its work in April 2010, was the first in the history of Portuguese democracy to question a sitting prime minister.

The media is a very competitive business in Portugal, and there is a great deal of competition both between the different forms of media and within each form of media. Consequently, there is competition in opinions. In addition, the 1976 constitution and the laws noted above (see Media Access) prohibit monopolies in the media, with extensive government opinions providing additional support on this issue.
The state-owned RTP and RDP each have seven channels or stations. However, there are also two private TV channels. One of them, TVI, or Independent Television, attracts the largest TV audience share. Overall, the media, consisting of TV, radio, daily and weekly newspapers, and magazines, are owned by three main groups of private investors. The competitive business environment ensures a pluralism of views and opinions.
The scenario in general remains largely similar to that described in the 2009 report. The changes that can be noted are the following:
(1) The Sol weekly newspaper was purchased by a Luso-Angolan holding company in March 2009. Who is behind this holding company is unclear, and this was to be a point of some controversy in February 2010. In early 2010, Sol released alleged telephone wiretap recordings that implicated the prime minister in the PT/TVI deal (see Media Freedom above), despite a legal order barring the publication of the material. Socialist Party legislators raised questions as to who was behind the Sol newspaper, which were not answered in full. In the same month, Sol editor José António Saraiva accused the government of trying to shut his newspaper down, by leaning on one its main lenders, the BCP bank.
(2) The TVI group launched a 24-hour cable news channel, TVI24, in February 2009.
(3) The free weekly Sexta closed in January 2009.

Free and readily available access to official information is guaranteed in Article 48.2 of the 1976 constitution, and there are mechanisms in place to ensure that this access is respected. There are extensive legal stipulations providing guarantees for access to official information. In addition, the EU Aarhus Convention, signed on July 25, 1998, was ratified by Portugal on September 7, 2003. Maybe most important in this regard, the government has put virtually all official information online, as well as requirements for documents such as permits and licenses, allowing the population to access this information through computers at home and for free in a wide variety of public places such as municipal libraries. This issue is discussed and monitored in Portugal, and access to official information does in fact take place. The Commission on Access to Administrative Documents (Comissao de Acesso aos Documentos Administrativos, CADA), established in 1995, deals with complaints regarding public access to information. Thus, there is broad access, according to the law. However, the information that is available is difficult to locate and uneven across government departments.

The Portuguese constitution of 1976 defines the population’s broad categories of rights and guarantees in articles 12 – 23 and 24 – 27. These are generally respected in practice. However, several elements of concern highlighted in the previous report remain largely unchanged.
(1) Reports of police violence and brutality continue to emerge. Indeed, the government department responsible for investigating police brutality, the Inspecção-Geral da Administração Interna, received some 1,018 complaints in 2008 – a very substantial increase when compared with 2007 (207 complaints). The U.S. Department of State Report on Human Rights Practices in Portugal for 2009 considers there to be “credible reports of excessive use of force by police.”
(2) The treatment of prisoners continues to be a point of concern, with the U.S. Department of State Report on Human Rights Practices in Portugal for 2009 identifying once again as “credible” reports of “abuse of detainees by prison guards.” Moreover, this report quotes data from the Directorate-General of Prison Services that, in September 2009, the prison system was operating at 91.6% of capacity, a fact not inconsistent with allegations of overcrowding. However, there have been some improvements in this domain, with the approval of the new Code of Execution of Sentences and other Freedom-Depriving Measures (Law 115/2009, of October 12, 2009), which increased prisoner’s rights.
(3) The legal system continues to hold the possibility of lengthy pretrial “preventive” detentions, without charges being filed. According to the U.S. Department of State Report on Human Rights Practices in Portugal for 2009, some 19% of the prison population was in preventive detention of this kind in September 2009. While this is somewhat lower than the proportion highlighted in the 2005 – 2007 report – a reflection of the new penal code adopted in September 2007 – this figure is nevertheless high and remains, according to the US report, “a problem.” Also according to this report, the average detention time under preventive arrest was eight months, with approximately 20% of such detainees spending more than one year in preventive arrest.
Aside from this issue, there were further advances in the area of religious freedom. In September 2009, a new decree-law (Decreto-Lei 253/2009) laid out rules for established non-Catholic religious groups, including Jews, Evangelicals, Muslims and Bahá’ís, to provide spiritual and religious assistance in hospitals. This was previously permitted only to the Catholic Church.

There are widely agreed-upon political liberties. These are guaranteed by the constitution’s basic provisions and subsequent regular legislation, and they function well.

Cases of discrimination are rare. Generally, the Portuguese are extremely tolerant. However, Portugal is home to 500,000 legal immigrants, about 5% of the population, and also about 50,000 gypsies. These are large numbers, and there are some cases of discrimination. To prevent, discourage and punish discrimination, the government has done a number of things, including: passing a law prohibiting racial discrimination; creating programs to integrate immigrants and gypsies into societal, work, and educational settings; promoting increased awareness of human rights issues among police and judges; and giving the Commission for the Elimination of Racial Discrimination (Comite para a Eliminacao da Discriminacao Racial, CERT) authority to analyze and call attention to cases of racial discrimination.
There has been little change in terms of the gender pay gap. The World Economic Forum’s 2009 Global Gender Gap Index ranks Portugal 46th out of 134 countries – below such countries as Mozambique, Costa Rica, Mongolia, Botswana, Uganda, Panama and Peru. This represents little change as compared to the 2006 – 2008 period, either in terms of Portugal’s ranking or its absolute score on the index.
In the SGI 2009 report, we highlighted the lack of legislation mandating access for disabled people to private businesses or other facilities. According to the Department of State Report on Human Rights Practices in Portugal for 2009, this lacuna still persists.

Portugal is an extremely legalistic society. However, as highlighted in the 2009 SGI report, the legal environment is very complex, allowing considerable decision-making discretion to the government and public administration.
There is currently a debate over whether the laws are being applied consistently and predictably in the financial sector. However, while the PS majority held its majority in parliament, the government did not act at all times fully in accord with the spirit of the law.

The judiciary is independent and is fairly active in seeking to ensure that government actions conform to the law, albeit unevenly so. The most relevant body in this respect is the Court of Auditors (Tribunal de Contas). This is a constitutionally prescribed body, and is defined as a court in the Portuguese legal system. It audits public funds, public revenue and expenditure, and public assets, with the aim of ensuring that “the administration of those resources complies with the legal order.” The Court of Auditors has become increasingly active in auditing and controlling public accounts. Assessment by other bodies is perhaps less effective, largely due to the slow nature of the legal system. The highest body in the Portuguese judicial system is the Supreme Court, constituted by four civil chambers, two criminal chambers, and one labor chamber. There is also a disputed claims chamber, which tries appeals against Higher Judicial Council decisions. The Supreme Court decides appeals on matters of law and not on the facts of a case, and has a staff of 60 justices (conselheiros). There are also district courts, appeals courts, and specialized courts, as well as a nine-member Constitutional Court that reviews the constitutionality of legislation. In total, there are more than 500 courts in Portugal and 3,000 judges. Even so, there are shortages of judges in comparison to the number of cases outstanding, and delays in reaching judicial decisions continue to be a problem.
In late 2009, there were some indications that the government was seeking to influence the judicial system. It must be noted that the judges are nominated by the political parties in a ratio based on the parties’ electoral strength, and those nominated by the PS have mainly voted in favor of the prime minister and the government’s policies, while others have voted against the government.

The High Council of the Public Prosecution Department (Conselho Superior do Ministério Público), which oversees the appointment of judges, consists of 17 judges, including the Attorney General’s Office (Procurador-Geral da República). Five are appointed by the Assembly of the Republic (AR), Portugal’s unicameral parliament, which was controlled by the PS between 2005 and 2009. An additional two are appointed by the Ministry of Justice. There are allegations that the executive sought to influence the Attorney General’s Office (the president of the highest level of judicial system) with regard to a licensing issue involving the Freeport commercial complex. The attention, in the media and the AR, called attention to political influence on the judicial system, but did not result in any solid proof of undue influence or corruption. The case began in late 2009 and continued beyond March of 2010.

As noted in the 2009 SGI report, Portugal’s formal corruption-prevention and integrity mechanisms have had relatively limited success in stopping corruption. Some additional measures were adopted during the period presently under review. Law 54/2008 created the Council for the Prevention of Corruption, which is to be an independent administrative unit working within the Auditors Court. However, a leading corruption magistrate criticized the means given to this council in October 2008, saying that “without a permanent body of specialists” this would become a “castle of anti-corruption bureaucracy.” Anti-corruption legislation was a recurrent theme of parliamentary debate during the past two years, reflecting growing public disquiet over the problem’s apparent prevalence. However, many of the proposals were rejected. Some new measures proposed by the Socialist Party were approved in late April 2010. However, their actual impact is not clear and a leading Socialist, João Cravinho, considered the measures to be “ad hoc measures” that fulfilled only the most basic criteria, and which revealed a lack of strategy in combating corruption.
In law, abuse of position is prohibited and it is a crime to do so. This is stipulated in the Statute on Persons in Positions of Responsibility No. 3 of Estatuto 24/84 - Estatuto Disciplinar dos Funcionários e Agentes da Administração Central, Regional e Local. However, corruption persists despite this legal framework. In its most recent annual report, Transparency International gave Portugal a lower rank than in the previous year on the issue of perception of corruption, dropping the country from 28th place to 32th place worldwide. In Europe, Portugal was ranked at 19th place.

Economic policy since 2002 has focused on getting public finances under control, and on staying within the euro zone’s 3% budget-deficit ceiling. This was seen as the first step before fostering growth. The PSD-CDS center-right coalitions that governed from 2002 to 2005 were able to stay within the 3% ceiling in 2002 and 2003, but were unable to sustain this performance as budget deficits spiraled out of control in 2004 and 2005, with deficits of 3.3% and 6.1% percent respectively. The ensuing Sócrates government (2005 – 2009) retained budgetary consolidation as a key priority, and its austerity measures proved effective until 2007. Budgetary control appeared to coincide with signs (albeit tentative ones) of economic recovery, with growth in 2007 hitting its highest level since 2001 (even if, at 1.9%, it remained below the EU-15 average) and unemployment stabilizing, leading the government to declare that the crisis was over.
However, Portugal’s timid signs of recovery were unable to withstand the global financial and economic crisis in 2008. The economy took a big hit, with a marginally negative GDP growth rate in 2008 (-0.04%) and further recession in 2009 (GDP growth of -2.7%, although this decline was less drastic than the EU-15 average of -4.3%). The impact was particularly salient on public finances (see Budgetary Policy below).
Inevitably this situation accentuated pressure on Portugal, with the country’s debt downgraded by rating agencies in January 2010 (following similar downgrades affecting Spain). The Portuguese government’s response came in the shape of the budget for 2010, announced in late January and approved in March; and particularly in its draft Stability and Growth Program (SGP) for the 2010 – 2013 period. These measures are likely to resolve the budget deficit issue, although further measures were being considered in late April 2010. However, there seems to be little response to the issue of Portugal’s low growth potential. Economic studies point to declining levels of growth in potential GDP in the new millennium, from approximately 3% in 2000 to close to zero by 2008, a pattern caused by falling levels of investment and productivity in the Portuguese economy.

The anemic growth highlighted in this report has inevitably had effects in other dimensions of the economy, perhaps most notably on the labor market. The unemployment rate has almost trebled in the past decade, rising from 4% in 2000 to 10.5% in January 2010, a level that is 0.6 percentage points above the EU-15 average. The recession of the 2008 – 2010 period trickled through to further job losses, with unemployment rising by more than three percentage points between the second trimester of 2008 and January 2010. Labor laws were changed in 2009, partially liberalizing the employment sector. In early 2010, the government created the Employment Initiative, 2010 (Iniciativa Emprego, 2010) program, attempting to stimulate employment by reducing or eliminating employer social security contributions for new hires who are more than 40 years old. However, policies have lagged well behind the needs of the labor market, with little discernible impact in slowing down a galloping unemployment trend.

Portugal is ranked by foreign investors as one of the least competitive countries in Europe, and private investment has been decreasing since 2003. Enterprise policy does not stimulate private investment. However, the government under Prime Minister José Sócrates has attempted to make it easier to open new businesses and to encourage investment. In Decree Law No 244, of July 23, 2007, the government created the Portuguese Agency for Foreign Investment and Commerce (Agência para o Investimento e Comércio Externo de Portugal, AICEP). In 2006, Portugal was ranked 33rd of 175 countries in a World Bank survey on the speed at which businesses could be opened. Consulting firm Ernst & Young presented a report in Lisbon on November 6, 2009, at the Agency for Portuguese Foreign Investment, highlighting the inefficiency of the judicial and fiscal system, and citing this as a major obstacle to foreign investment in Portugal. However, there have been improvements, notably through the Simplex program. A 2009 OECD report found that “significant steps have been taken towards reducing the number of licenses and the waiting time for application approval.” This improvement is exemplified by the “On-the-Spot-Firm” measure, which has reduced the time necessary to legally set up a business from over 50 days to less than an hour.

Tax receipts dropped substantially in 2009 with the economic recession. In the period between January and August 2009, overall receipts fell by 9.6%, helping generate the substantial public deficit. In addition, tax policy falls well short of the goal of equity. There continues to be widespread tax avoidance in the realm of personal income tax, especially on the part of self-employed professionals. This places tax burden mostly on employees. At the corporate level too, vertical equity continues to be lacking, with studies indicating that the effective tax rate is often lower for more profitable companies. The insufficient revenue from corporate and personal income taxes leads to a greater dependence on indirect taxation to sustain public expenditure. Indeed, looking at the first eight months of 2009, almost 60% of tax revenue was derived from indirect taxation. Moreover, value-added tax (VAT) revenues were higher than personal income tax and corporate tax receipts combined. While a small reduction in VAT– from the EU’s maximum permissible level of 21% to 20% – took place in July 2008, this was insufficient to alleviate the considerable negative impact of indirect taxation in terms of vertical equity. Moreover, rumors of a return to 21% VAT were strong in late April 2010. In early 2010, in an attempt to control the spiraling budget deficit (see Budgetary Policy below), the government announced a new upper tax bracket of 45% on households earning over €150,000 per year, introduced taxation on stock market gains, and reduced existing tax exemptions. Overall, however, tax policy appears to be reactive to budget needs (and often late in reacting) and has not tackled the crucial tax evasion issue.

As highlighted in the SGI 2009 report, efforts at controlling the budget deficit exceeded the government’s own expectations in the 2005 – 2007 period: The government expected reach a level below 3% in 2008, but in fact achieved this a full year earlier, with a deficit of 2.6% in 2007. Since then, however, there has been nothing short of a budgetary collapse.
In December 2008, the government’s projection for 2009’s budget deficit was 3%. In February 2009, the government approved a supplementary budget which projected the deficit for that year at 3.9%. This was revised to 5.9% in mid-2009, a projection the government stuck with until the September 2009 legislative elections. In November, this was revised to 8.4%. In fact, the actual 2009 budget deficit was to exceed even this last estimate, in the end reaching 9.3%. This deficit inevitably percolated through to Portugal’s public debt, which reached 81.1% of GDP in 2009 – 10 percentage points more than 2008, and more than 20 percentage points higher than in 2003.
While some deterioration was expected given the recession and the government’s bailout of parts of the financial sector, its extent was a surprise – even for the government, as the above revisions suggest. As such, policy in the period under analysis here seriously failed to achieve the goal of fiscal sustainability.
The Portuguese government’s response to this situation came in the shape of the budget for 2010, announced in late January and approved in March; and particularly in its draft Stability and Growth Program (SGP) for the 2010 – 2013 period. The SGP, unveiled to euro zone finance ministers on March 15, projects a reduction of the budget deficit to 8.3% in 2010 (a measure also outlined in the 2010 budget), 6.6% in 2011, and 4.6% in 2012, before reaching 2.8% in 2013. With regard to public debt, this is expected to rise before stabilizing, reaching 86% of GDP in 2010 and then rising to 89.4% and 90.7% respectively in 2011 and 2012, before beginning to drop in 2013 (to 89.8% of GDP).
The bulk of the declines in the deficit is to come from cutbacks in public expenditure, which are expected to account for half of the overall deficit decrease. This is to be achieved through a reduction in real public sector wages over the next four years, as well as through cuts in public employment, the government adopting a “retain one public-sector worker for every two that leave” rule. The goal here is to reduce expenditure on public sector wages and personnel to below 10% of GDP by 2013, from the current level of 11.2%. Reflecting the finance minister’s focus on reducing public spending, gains in terms of state revenues are comparatively more modest, accounting for only 15% of the projected reduction in the deficit. This will be done notably through selling off part or all of the state’s holdings in several companies, as well as through a variety of tax changes. The remainder of the budgetary containment is to be achieved through the impact of automatic stabilizers as the economy begins to pick up, with the government estimating fairly moderate growth rates of 0.7% in 2010, 0.9% in 2011, 1.3% in 2012 and 1.7% in 2013.

Portugal’s population shows comparatively good levels of overall health. Life expectancy has grown consistently in the last decade, reaching 76.24 years for men and 82.41 years for women in 2008. Infant mortality was 3.3 per 1,000 live births in 2008, a rate lower than that of United Kingdom, Austria, Netherlands, Italy, Denmark, Germany or Spain. Portugal has a universal and general National Health Service (NHS), accessible to all residents. According to the constitution (Article 64) this service, “with particular regard to the economic and social conditions of the citizens who use it, shall tend to be free of charge,” and is financed predominantly through taxation. While this system faces challenges, as do virtually all systems if this kind in Europe, it is a relative success story in Portugal. Indeed, the relative effectiveness of the health service is reflected in the comparatively high score achieved by Portugal when considering the life expectancy-to-spending ratio: Portugal’s life expectancy is close to the OECD average, with a significantly lower than average health care expenditure per person.
Health policy in the 2008 – 2010 period continued the reform highlighted in the SGI 2009 report, seeking to rationalize health provision structures. Some emergency health services were closed in areas of low population density, generating as a result substantial protests in Valença in March 2010. The government also introduced health center clusters (approved in 2008 with Decree-Law No. 28/2008, and further specified in the form of Decree-Law 82/2009) and implemented public health services in these clusters (Decree-Law 82/2009). One emerging problem in this period is that of a lack of doctors in the NHS.
There is in addition a private health care system that provides high-quality care, but this is expensive, and can be afforded by only a small minority of perhaps 5% of the population.

Government social policy seeks to limit the most extreme socioeconomic disparity, but this effort is poorly funded and does not effectively prevent poverty. Taxes have recently been increased, including on pensions. The ostensibly minimum salary level of €475 per month in 2010, which is in fact higher than what some workers earn, is not enough to prevent poverty. The same is true for some pension levels.
The gravity of the country’s poverty and socioeconomic disparity is demonstrated in a whole series of current indicators. Portugal has the most unequal distribution of income in the European Union, and the greatest percentage of people in poverty (20%). The country has slipped from 26th to 27th place in the United Nations’ Human Development Index. The lack of social cohesion is widely recognized, and there is currently a great deal of discussion of how to remedy this serious situation. The obstacles including the following: the existence of multiple uncoordinated social security programs; archaic and underfunded pension programs; a large number of poorly skilled workers; and a low minimum wage, which serves as a reference for other remunerations. Policies able to remedy these many problems have yet to be implemented. Moreover, social inclusion policy is likely to weaken rather than the opposite. The economic recession and the rising levels of unemployment have increased the risks of social exclusion. Indeed, the number of recipients of the “social inclusion income” (a successor to the guaranteed minimum income) increased by 38.6% between January 2007 and May 2009. In March 2010, the government announced reductions in welfare benefits, including unemployment benefits, and implemented more stringent eligibility criteria. These are aimed at curbing the budget deficit. However, with savings amounting to a total of just 0.5% of GDP by 2013, their cost in terms of social inclusion is likely to be higher any associated budgetary consolidation benefits.

The hard realities of the economy and the labor market typically prevent women from combining parenting with successful participation in the labor market. Due to the rigidity of the labor market, potential employers are unwilling to hire women who are likely to become pregnant. Or, if they have been hired and do not have a long-term contract, they will be let go. Mothers are legally entitled to four months of parental leave at 100% of earnings, or five months at 80% (fathers may also be entitled to part of this, should the couple so decide). The fertility rate continues to be low, standing at an average of 1.4 children per woman in 2008 (a modest gain vis-à-vis the results reported in the SGI 2009 report). The government has not provided targeted resources aimed at increasing female employment, so women’s salaries and unemployment levels are worse than those of males. For example, although the proportion of women in higher education is now higher than that of men, this advantage is not recognized or rewarded by employers, and women’s situation is actually worsening. Whereas women held 33.9% of the “upper category” (quadros superiores) positions in the job market in 2005, this figure had fallen to 31.4% by 2009. It was only with regard to lower-skilled positions that this percentage increased.
Furthermore, whereas 44.3% of female Portuguese workers were unemployed or held precarious employment in 2009, some 40.6% of men were in that situation. In the last quarter of 2009, 26.8% of unemployed women had been unemployed for more than a year, as opposed to some 22.8% of men.
In the SGI 2009 report, we highlighted the Sócrates government’s commitment to increasing number of child care places for children between three months and three years of age. This goal was one focus of the Program to Widen the Network of Social Equipment (Programa de Alargamento da Rede de Equipamentos Sociais, PARES), which was launched in March 2006 and was to last through 2009. However, the PARES program has not met its goals. In February 2010, the government estimated that it would cover 36% of needs by the end of that year. The PARES program had aimed at building 400 new child care facilities with a capacity of more than 18,000 children. Of these, only 100 were in operation by the end of 2009, though the government estimates that a further 180 to 200 “may also start operating” by the end of 2010. Coverage thus remains insufficient.

Portugal’s pension policy does not achieve any of the system’s primary goals. That is, available funds are not sufficient for any of the three goals: Poverty is not prevented, retirees only receive one-third of the country’s minimum wage, and the program is not fiscally sustainable. Moreover, it is worse for women. For example, in January of 2010, the average old age pension for a woman was €301.42 (with 991,841 women receiving old age pensions), while the average for men was €505.41 (with 874,071 male recipients); that is, the pension level for women was only 59% of that received by men.

Portugal’s integration policy is generally a very good one, albeit unevenly so. The UNDP’s Human Development Report of 2009 praised Portugal as an example of good practices in some aspects of immigrant treatment, notably in providing health care access to migrants regardless of their legal status; allowing the extension of temporary residence permits; allowing migrants to obtain permanent residence permits after five years of regular residence in the country; and providing language courses to migrants. However, this is counterbalanced by areas in which Portugal lags, with the UNDP’s report highlighting Portugal’s failure to provide “schools with teachers and educational resources of similar quality to those attended by locally born pupils.” The role played by the High Commission for Immigration and Ethnic Minorities (ACIME) must also be noted. This has had a prominent and widely praised role in promoting integration.

Defense policy, as much else in Portugal, must be analyzed in the context of EU goals and policies, and the country’s active involvement in NATO. Portugal’s ties with the United States, which result in security assistance and a very close bilateral relationship, must also be seen in terms of security policy. Portuguese defense policy with respect to security risks such as organized crime and terrorism are in fact Europe-wide defense policies. Public opinion surveys indicate that the Portuguese view Europe as more important than Portugal itself in issues of defense policy. It must be stressed that the Portuguese do not perceive their nation as having internal security problems. In the public view, everyone is integrated, and if there are terrorist cells in the country, they will attack targets outside Portugal rather than inside.
Portugal has historically and consistently hedged its bets in the relationship within NATO’s European Security and Defense Identity (ESDI) and the Atlantic relationship. Moreover, the country is undergoing very serious economic problems, and lacks the funds to purchase all of the equipment it had once foreseen. It should be noted that the Military Programming Law (Lei da Programação Militar) will be cut 42% as a result of the Program for Stability and Growth (Programa de Estabilidade e Crescimento). But even aside from financial and technological problems, and the emphasis on NATO, it has been argued that Portugal’s input to the development of the European Security and Defense Policy (ESDP) has been curtailed by the politico-diplomatic leadership’s mindset regarding the so-called European project. Portugal has always been against a “federal bond” or federalist model as a part of the integration process. This is evident in the country’s rejection of the “communitarization” of the security and defense pillars, and also in its complete rejection of any dilution in states’ sovereign rights to make independent decisions concerning the definition and implementation of their foreign, security and defense policies.

Criminality has risen with the increase in drug use and unemployment. The freedom of movement resulting from the Schengen agreement, especially with respect to the eastern European countries, has resulted in the imprisonment of individuals associated with international groups involved in illegal immigration, trafficking in women, and robbery. While the Basque terrorist group ETA does not pursue operations in Portugal, it was recently shown that the group does exist in the country. In early 2010, Portugal and Spain worked out protocols of cooperation to combat ETA, and jointly succeeded in capturing ETA cadres with explosives in Óbidos, Portugal.

The period under review was marked by considerable improvement in terms of Portugal’s environmental performance. Portugal had overshot the Kyoto target for greenhouse gas (GHG) emissions by 11% in 2007. In 2008, this excess fell to 5%, and the government estimates that it will fall further, to between 3% and 3.5%, by 2012.
This drop is in part a reflection of the period’s state of economic crisis, which has led to lower levels of polluting activities such as road transport (which was also affected by rising gasoline prices). However, it is also a reflection of policy choices. Prime Minister José Sócrates made the development of renewable energy sources a key priority in this period, and this policy is beginning to show results. Portugal ranked 10th in the Ernst & Young Renewable Energy Country Attractiveness Indices of 2009, ahead of Australia, Japan, Netherlands, Sweden and Denmark, among others. Wind power provided 15% of Portugal’s electricity in 2009, and the country has the world’s first commercial wave farm, which officially opened in September 2008. Portugal’s renewable energy policy objectives for the period 2007 – 2020 are particularly ambitious, including the European Union’s most ambitious carbon dioxide emissions target.

The first Sócrates government (2005 – 2009) placed innovation and R&D at the heart of its development strategy, as part of the planned “technological shock” that constituted a central element of the party’s electoral appeal at the 2005 elections. As such, the government has sought to place a high priority on science and innovation. The sustained investment in R&D by the Portuguese government since the 1990s (to a large extent spearheaded since 2005 by Sócrates’ minister for science and higher education, Mariano Gago, who was also minister for science in the António Guterres administration from 1995 to 2002) has consistently improved the country’s position in terms of European R&D rankings. The 2009 European Innovation Scoreboard found Portugal’s innovation performance to be below the EU-27 average, putting it in the group of moderate innovators. However, it notes that “the rate of improvement [in Portugal] is three times that of the EU-27, making it a growth leader within the group of moderate innovators.”
However, Portugal has a substantial amount of catching up still ahead. On a broader global scale, Portugal ranked 30th out of 45 countries on the EU’s Global Innovation Scoreboard for 2008. Structural deficiencies in Portugal’s R&D arrangements remain, notably with respect to the relatively weak level of private R&D expenditure and low levels of educational attainment, including youth and tertiary education and lifelong training. The private-sector issue is showing improvement, with considerable growth in private R&D investment in recent years, including a 28% increase between 2007 and 2008 alone. The educational weaknesses generate a very segmented labor force, which inevitably limits the development of broader knowledge-based economic activities.

Portugal’s education policy failures are more salient in some dimensions than others, with median quality and universal access as the most obvious weaknesses. Access to educational resources remains low and unequal. The government has sought since 2005 to combat this by encouraging more lifelong learning, vocational training and adult education opportunities, notably through its New Opportunities Initiative, launched in late 2005. This is a laudable initiative. However, there remain questions over its implementation, and opposition parties both on the right and the left have particularly criticized a perceived lack of quality in the training provided.
The most relevant measure implemented during the period under review was the government’s extension of the compulsory education period until the end of secondary school (12th grade), a policy approved in August 2009. Previously, students were obliged to remain in school only until ninth grade. This measure will generate important gains in terms of secondary school attainment, a field in which Portugal lags behind its EU peers. However, it has yet to be fully implemented, and questions remain as to how this will take place.