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During the second semester of 2004, a coalition between the PSD (main party) and PP governed Portugal in the 16th constitutional government, led by Pedro Santana Lopes, substituting José Manuel Durão Barroso. Barroso resigned to become President of the European Commission. After dissolution of the Assembly by President Jorge Sampaio, this coalition lost the election on Feb 20, 2005. The victory of José Sócrates, the leader of the PS, is complete with no less than 121 MPs - an unprecendented absolute majority for the PS.

Portugal was a founding member of NATO; it is an active member of the alliance by, for example, contributing proportionally large contingents in Balkans peacekeeping forces.

Over the past decade, successive governments have privatised many state-controlled firms and liberalised key areas of the economy, including the financial and telecommunications sectors. Today, Portugal is a developed nation. It joined the Economic and Monetary Union in 1998 and began circulating its new currency, the euro, on January 1, 2002 along with 11 other EU members.

Portugal is characterized by city, town or village cultural differentiation and there is virtually no regional affiliation, unlike other European countries. Portuguese is spoken throughout the country, with only the villages of Miranda de Douro's Leonese dialect recognised as a locally co-official language. It is known as Mirandese. The closely related Asturian dialect in Spain is another Leonese dialect but not officially recognized by Spain.

During the summer, in the month of June, festivities dedicated to three saints known as Santos Populares (Eng. Popular saints) take place in all over Portugal. Why the populace associated the saints to these pagan festivities is not known. But it is possibly related to Roman or local deities before Christianity has spread in the region. The three saints are Saint Anthony, Saint John and Saint Peter. A common denominator in these festivities are the wine and água-pé (drink basically constituted by grape juice), traditional bread along with sardines, marriages, traditional street dances, fire, fireworks and joy.

At the end of the 11th century, a knight from Burgundy named Henry became Count of Portugal. Henry was a strong supporter of independence. Under his leadership, the County of Portucale and the County of Coimbra merged. Henry declared independence for Portugal while a civil war raged between Leon and Castile.

In the elections of February 20, the Socialist Party obtained its largest victory ever; for the first time in the democratic history of the country a Socialist government would be formed with an absolute majority in the Assembly of the Republic.

With the 1975-76 independence of its colonies (except Macau, because it hadn't any independentist movement), the 560 year old Portuguese Empire had already effectively ended. With it, 15 years of war effort also came to an end. Also many Portuguese returned from the colonies, coming to comprise a sizeable sector of the population and starting an economic recovery, thus opening new paths for the country's future just as others closed. In 1986, Portugal entered the European Union.