Dom José I, for his part, escaped the earthquake unscathed. Instead of being in residence at the royal palace, he had ridden out of town to Belém with his extensive retinue. After seeing the devastation, the eccentric José I refused to live in a masonry building ever again, and he set up a wooden residence outside town, in the hills of Ajuda, north of Belém. What was known as the Real Barraca (Royal Tent) became the site of the Palácio Nacional de Ajuda after the king's death.

  Dawn of a Republic

  French Invasion Unleashes Royal Chaos

  In 1793 Portugal found itself at war again when it joined Britain in sending naval forces against revolutionary France. Before long, Napoleon gave Portugal an ultimatum: close your ports to British shipping or be invaded.

  There was no way Portugal could turn its back on Britain, upon which it depended for half of its trade and the protection of its sea routes. In 1807 Portugal’s royal family fled to Brazil (where it stayed for 14 years), and Napoleon’s forces marched into Lisbon, sweeping Portugal into the Peninsular War (France’s invasion of Spain and Portugal, which lasted until 1814).

  To the rescue came Sir Arthur Wellesley (later duke of Wellington), Viscount Beresford and their seasoned British troops, who eventually drove the French back across the Spanish border in 1811.

  Free but weakened, Portugal was administered by Beresford while the royals dallied in Brazil. In 1810 Portugal lost a profitable intermediary role by giving Britain the right to trade directly with Brazil. The next humiliation was João’s 1815 proclamation of Brazil as a kingdom united with Portugal – he did this to bring more wealth and prestige to Brazil (which he was growing to love) and, in turn, to him and the rest of the royal family residing there. With soaring debts and dismal trade, Portugal was at one of the lowest points in its history, reduced to a de facto colony of Brazil and a protectorate of Britain.

  Meanwhile, resentment simmered in the army. Rebel officers quietly convened parliament and drew up a new liberal constitution. Based on Enlightenment ideals, it abolished many rights of the nobility and clergy, and instituted a single-chamber parliament.

  Faced with this fait accompli, João returned and accepted its terms – though his wife and his son Miguel were bitterly opposed to it. João’s elder son, Pedro, had other ideas: left behind to govern Brazil, he snubbed the constitutionalists by declaring Brazil independent in 1822 and himself its emperor. When João died in 1826, the stage was set for civil war.

  Offered the crown, Pedro dashed out a new, less liberal charter and then abdicated in favour of his seven-year-old daughter, Maria, on the provisos that she marry uncle Miguel and that uncle Miguel accept the new constitution. Miguel took the oath but promptly abolished Pedro’s charter and proclaimed himself king. A livid Pedro rallied the equally furious liberals and forced Miguel to surrender at Évoramonte in 1834.

  After Pedro’s death, his daughter Maria, now queen of Portugal at just 15, kept his flame alive with fanatical support of his 1826 charter. The radical supporters of the liberal 1822 constitution grew vociferous over the next two decades, bringing the country to the brink of civil war. The Duke of Saldanha, however, saved the day, negotiating a peace that toned down Pedro’s charter while still radically modernising Portugal’s infrastructure.

  To 'relive' the Lisbon earthquake, visit the Lisbon Story Centre, located near the heart of where so much destruction occurred.

  The Portuguese were the first Westerners to reach Japan, in 1543. They founded Nagasaki, introduced the mosquito net and brought new words to the Japanese language, including pan (bread) and, possibly, arrigato (thank you).

  A Hopeful New Era

  The latter half of the 19th century was a remarkable period for Portugal, and it became known as one of the most advanced societies in southern Europe. Casual visitors to Lisbon, such as Hans Christian Andersen, were surprised to find tree-lined boulevards with gas street lamps, efficient trams and well-dressed residents. Social advances were less anecdotal. The educational reformer João Arroio dramatically increased the number of schools, doubling the number of boys’ schools and quadrupling the number of girls’ schools. Women gained the right to own property; slavery was abolished throughout the Portuguese empire, as was the death penalty; and even the prison system received an overhaul – prisoners were taught useful trades while in jail so they could integrate into society upon their release.

  Professional organisations, such as the Literary Guild, emerged and became a major force for the advancement of ideas in public discourse, inspiring debate in politics, religious life and the art world.

  As elsewhere in Europe, this was also a time of great industrial growth, with a dramatic increase in textile production, much of it to be exported. Other significant undertakings included the building of bridges and a nationwide network of roads, as well as the completion of major architectural works such as the Palácio Nacional da Pena above Sintra.

  Some historians believe Portuguese explorers reached Australia in the 1500s, 250 years before England's James Cook. For the inside scoop, read Kenneth McIntyre’s The Secret Discovery of Australia (1977).

  It was the Portuguese who started England’s obsession with tea: their explorers introduced it to Europe in the mid-17th century and tea enthusiast Catherine of Bragança did the rest.

  Dark Days & A King's Death

  However, by 1900, discontent among workers began to grow. With increased mechanisation, workers began losing their jobs (some factory owners began hiring children to operate the machines), and their demands for fair working conditions went unanswered. Those who went on strike were simply fired and replaced. At the same time, Portugal experienced a dramatic demographic shift: rural areas were increasingly depopulated in favour of cities, and emigration (especially to Brazil) snowballed.

  Much was changing, and more and more people began to look towards socialism as a cure for the country’s inequalities. Nationalist republicanism swept through the lower-middle classes, spurring an attempted coup in 1908. It failed, but the following month King Carlos and Crown Prince Luís Filipe were brutally assassinated in Lisbon.

  Carlos’ younger son, Manuel II, tried feebly to appease republicans, but it was too little, too late. On 5 October 1910, after an uprising by military officers, a republic was declared. Manuel, dubbed ‘the Unfortunate’, sailed into exile in Britain, where he died in 1932.

  SALAZAR & THE ECONOMY

  When General António Carmona was named Portugal’s president in 1926, he inherited a country in serious debt. Fearing economic catastrophe, Carmona called in an expert, a man by the name of António de Oliveira Salazar. At the time, Salazar was a 37-year-old bachelor, sharing spartan quarters with a priest (who would later become cardinal of Lisbon). Salazar himself was no stranger to religious life. He spent eight years studying to become a priest, and some residents of his small native village even called him ‘father’ on his visits. Only a last-minute decision led him to veer into law instead.

  One of the country’s first economists, Salazar garnered wide respect for his articles on public finance. When General Carmona approached him with the job of finance minister, Salazar accepted on one condition: that the spending of all government ministries fall under his discretion. The general agreed.

  Salazar achieved enormous success in firing up the national economy. He severely curtailed government spending, raising taxes and balancing the budget during his first year. Unemployment decreased significantly. Salazar quickly became one of Carmona’s star ministers. He also took on additional posts as other ministers resigned. In this way he consolidated power until Carmona eventually named him prime minister.

  Salazar set a tone for civilian life that would last for many decades. Under his authoritarian rule, the country knew stability and prosperity, though at enormous cost: censorship, and imprisonment and – in some cases – torture of political opponents. Among his most damning attributes was his attitude towards the working class. He believed in giving them a diet of ‘fado, Fátima and football’ to keep them happily compliant, but he had no intention of bettering their lot; at the end of his rule, Portugal had the highest rates of illiteracy and tuberculosis in Western Europe, and women were still not allowed to vote. Given the socially backward condition of the nation when Salazar relinquished power, the advancements of the last 40 years are all the more startling.

  Rise & Fall of Salazar

  After a landslide victory in the 1911 elections, hopes were high among republicans for dramatic changes, but the tide was against them. The economy was in tatters, an issue only exacerbated by a financially disastrous decision to join the Allies in WWI. In the postwar years the chaos deepened: republican factions squabbled, unions led strikes and were repressed, and the military grew more powerful.

  The new republic soon had a reputation as Europe’s most unstable regime. Between 1910 and 1926 there were an astonishing 45 changes of government, often resulting from military intervention. Another coup in 1926 brought forth new names and faces, most significantly António de Oliveira Salazar, a finance minister who would rise through the ranks to become prime minister in 1932 – a post he would hold for the next 36 years.

  Salazar hastily enforced his ‘New State’ – a corporatist republic that was nationalistic, Catholic, authoritarian and essentially repressive. All political parties were banned except for the loyalist National Union, which ran the show, and the National Assembly. Strikes were forbidden and propaganda, censorship and brute force kept society in order. The sinister new Polícia Internacional e de Defesa do Estado (PIDE) secret police inspired terror and suppressed opposition using imprisonment and torture. Various attempted coups during Salazar’s rule came to nothing. For a chilling taste of life as a political prisoner under Salazar, you could visit the 16th-century Fortaleza at Peniche – used as a jail by the dictator.

  The only good news was the dramatic economic turnaround. Through the 1950s and 1960s Portugal experienced an annual industrial growth rate of 7% to 9%.

  Internationally, the wily Salazar played two hands, unofficially supporting Franco’s nationalists in the Spanish Civil War and allowing the British to use Azores airfields during WWII despite official neutrality (and illegal sales of tungsten to Germany). It was later discovered that Salazar had also authorised the transfer of Nazi-looted gold to Portugal – 44 tonnes, according to Allied records.

  But it was something else that finally brought the Salazarist era to a close – decolonisation. Refusing to relinquish the colonies, he was faced with ever more costly and unpopular military expeditions. In 1961 Goa was occupied by India, and nationalists rose up in Angola. Guerrilla movements also appeared in Portuguese Guinea and Mozambique.

  Salazar, however, didn’t have to face the consequences. In 1968 he had a stroke, and he died two years later.

  His successor, Marcelo Caetano, failed to ease unrest. Military officers sympathetic to African freedom fighters grew reluctant to fight colonial wars – the officers had seen the horrible conditions in which the colony lived beneath the Portuguese authorities. Several hundred officers formed the Movimento das Forças Armadas (MFA), which on 25 April 1974 carried out a nearly bloodless coup, later nicknamed the Revolution of the Carnations (after victorious soldiers stuck carnations in their rifle barrels). Carnations are still a national symbol of freedom.

  Officially neutral in WWII, Portugal was a major intersection of both Allied and Nazi spying operations. British secret-service agents based there included Graham Greene, Ian Fleming and double agent Kim Philby.

  The Inquisitor’s Manual (2003), by António Lobo Antunes, is a brilliantly written depiction of the dark days under Salazar, seen through the eyes of Faulknerian characters such as ‘the minister’, Senhor Francisco.

  From Revolution to Democracy

  Despite the coup's popularity, the following year saw unprecedented chaos. It began where the revolution had begun: in the African colonies. Independence was granted immediately to Guinea-Bissau, followed by the speedy decolonisation of the Cape Verde islands, São Tomé e Príncipe, Mozambique and Angola.

  The transition wasn’t smooth: civil war racked Angola, and East Timor, freshly liberated in 1975, was promptly invaded by Indonesia. Within Portugal, too, times were turbulent, with almost a million refugees from African colonies flooding into the country.

  The nation was an economic mess, with widespread strikes and a tangle of political ideas and parties. The communists and a radical wing of the MFA launched a revolutionary movement, nationalising firms and services. Peasant farmers seized land to establish communal farms that failed because of infighting and poor management. While revolutionaries held sway in the south, the conservative north was led by Mário Soares and his Partido Socialista (PS; Socialist Party).

  In the early post-Salazar days, radical provisional governments established by the military failed one after the other, as did an attempted coup led by General António de Spínola in 1975. A period of relative calm finally arrived in 1976, when Portugal adopted a new constitution and held its first elections for a new parliament. General António Ramalho Eanes was elected president the same year and helped steer the country toward democracy. He chose as his prime minister Soares, who took the reins with enormous challenges facing Portugal, including soaring inflation, high unemployment and downward-spiraling wages.

  Portugal only narrowly missed claiming Europe’s first female prime minister: in 1979 Margaret Thatcher snatched the honour just three months before Maria de Lourdes Pintasilgo (1930–2004).

  Rocky Road to Stability

  Portugal was soon committed to a blend of socialism and democracy, with a powerful president, an elected assembly and a Council of the Revolution to control the armed forces.

  Mário Soares’ minority government soon faltered, prompting a series of attempts at government by coalitions and non-party candidates, including Portugal’s first female prime minister, Maria de Lourdes Pintasilgo. In the 1980 parliamentary elections a new political force took the reins: the conservative Aliança Democrática (AD; Democratic Alliance), led by Francisco de Sá Carneiro.

  After Carneiro’s almost immediate (and suspicious) death in a plane crash, Francisco Pinto Balsemão stepped into his shoes. He implemented plans to join the European Community (EC).

  It was partly to keep the EC and the International Monetary Fund (IMF) happy that a new coalition government under Soares and Balsemão implemented a strict program of economic modernisation. Not surprisingly, the belt-tightening wasn’t popular. The loudest critics were Soares’ right-wing partners in the Partido Social Democrata (PSD; Social Democrat Party), led by the dynamic Aníbal Cavaco Silva. Communist trade unions organised strikes, and the appearance of urban terrorism by the radical left-wing Forças Populares 25 de Abril (FP-25) deepened unrest.

  In 1986, after nine years of negotiations, Portugal joined the EC. Flush with new funds, it raced ahead of its neighbours with unprecedented economic growth. The new cash flow also gave prime minister Cavaco Silva the power to push ahead with radical economic plans. These included labour-law reforms that left many workers disenchanted. The 1980s were crippled by strikes – including one involving 1.5 million workers – though they were to no avail: the controversial legislation was eventually passed.

  The economic growth, however, wouldn’t last. In 1992 EC trade barriers fell and Portugal suddenly faced new competition. Fortunes dwindled as a recession set in, and disillusionment grew as Europe’s single market revealed the backwardness of Portugal’s agricultural sector.

  Strikes, crippling corruption charges and student demonstrations over rising fees only undermined the PSD further, leading to Cavaco Silva’s resignation in 1995. The general elections that year brought new faces to power, with the socialist António Guterres running the show. Despite hopes for a different and less conservative administration, it was business as usual, with Guterres maintaining the budgetary rigour that qualified Portugal for the European Economic & Monetary Union (EMU) in 1998. Indeed, for a while Portugal was a star EMU performer, with steady economic growth that helped Guterres win a second term. But corruption scandals, rising inflation and a faltering economy soon spelt disaster. Portugal had slipped into economic stagnation by the dawn of the 21st century. The next 10 years were ones of hardship for the Portuguese economy, which saw little or negative GDP growth, and rising unemployment from 2001 to 2010. As elsewhere in Europe, Portugal took a huge hit during the global financial crisis. Ultimatums from the EU governing body to rein in its debt (to avoid a Greece-style meltdown) brought unpopular austerity measures – pension reform, increased taxes, public-sector hiring freezes – that led to protests and strikes.

  Portugal: A Traveller’s History (2004), by Harold Livermore, explores some of the richer episodes of the country's past, taking in cave paintings, vineyards and music, among other topics.

  Hard Times

  Portugal's economy wasn't particularly strong in the years before the economic crisis, making the economic fire all the more destructive. Lumped in with other economically failing euro-zone nations, the group of them collectively known as PIIGS (Portugal, Italy, Ireland, Greece and Spain), Portugal – in dire financial straits – accepted an EU bailout worth €78 billion in 2011. The younger generation has borne the heaviest burden following the crisis, with unemployment above 40% for workers under the age of 25. In addition, there are the underemployed and those scraping by on meagre wages.

  The EU bailout came with the stipulation that Portugal improve its budget deficit by reducing spending and increasing tax revenues. Austerity measures followed and the public took to the streets to protest against higher taxes and slashed pensions and benefits, in the context of record-high unemployment. Mass demonstrations and general strikes have grown, with the largest attracting an estimated 1.5 million people nationwide in 2013 – an astounding figure given Portugal's small size. Those in industries most affected by government policy – including education, healthcare and transportation – have joined ranks with the unemployed and pensioners to amass in the largest gatherings since the Revolution of the Carnations in 1974.