Flag of Portugal. The coat of arms dates back to the early days of the kingdom. Behind this an armillary sphere, which was an often used navigation instrument and symbolises the achievements of Portuguese explorers in the 15th and 16th century.
History
Portugal is one of the oldest countries in the world, and is most known for its role during the Age of Discovery in 15th and 16th centuries. Portuguese navigators sailed across the world oceans establishing the first European colonial empire, with possessions in Brazil, Africa, India and the Far East.
Name
Portugal is named after the coastal city of Portus Cale, a name which dates back to the age of the Roman Empire. It is currently known as Porto, the country's second largest city after the capital Lisbon.
Antiquity
Before Portugal became a Roman province in 17 BC, it was settled by Celtic tribes who had mixed with the local Iberian population. The Romans named the area Lusitania, with the north of Portugal belonging to Gallaecia.
Early Middle Ages (711-1383)
After the fall of the Roman Empire Germanic tribes such as the Suebi conquered most of Portugal. Germanic rule ended with the Moorish invasion in 711 AD, and marked the start of five centuries of Islamic history in Portugal.
Immediately after the Moorish local noblemen planned a counter offensive to reconquer the lost lands. But it would take until 868 when the area around Porto became the County of Portugal, marking the start of the country's history, even though at that time it was part of the larger Kingdom of Asturias in northern Spain. In 1139 Portugal became an independent kingdom under King Afonso. Moorish presence in Portugal ended with the conquest of the southern Portuguese region of the Algarve in 1249. Kings of Portugal would maintain the separate title King of Algarve until the establishment of the republic in 1910.
Age of Discovery (1383-1580)
A succession crisis erupted in 1383 when King John of Castile, which was the largest medieval kingdom in Spain at the time, claimed the Portuguese throne due to his marriage to the daughter of the King Ferdinand of Portugal. A rebellion led by John (João) of Aviz established defeated the Castilians and established a new dynasty.
João's son became known as Henry the Navigator, as he sponsored explorers to look for an alternative route to India to bypass the Ottoman Empire which controlled the spice trade to Europe. Portuguese navigators were the first Europeans to reach the South African Cape and subsequently the Indian Ocean. The wealth that these trade routes produced inspired people such as Christopher Columbus to find faster routes. Ironically, it was the Spanish Queen Isabella that financed his trip to discover the New World. Eight years later, in 1500, Pedro Álvares Cabral discovered Brazil and claimed it for Portugal, but Spain would dominate most of Central and South America for the next 3 centuries.
Besides Brazil, the Portuguese Empire included the Atlantic archipelagos of Madeira, The Azores, Cape Verde and São Tomé & Principe. On the African mainland it colonised Guinea, Angola and Mozambique, with several other coastal fortresses lost to rival European colonial powers. In the Middle East the Portuguese settled around the Persian Strait, and in Asia in Goa (India), Ceylon (Sri Lanka), Formosa (Taiwan), Malacca (part of Malaysia), East Timor and the Molucca Islands (part of Indonesia).
Spanish dominance (1580-1640)
In 1580 the House of Aviz came to an end and Philip II of Spain claimed the Portuguese throne, resulting in a personal union between both countries. As Spain was involved in many wars its enemies took the opportunity to conquer many Portuguese outposts. The Iberian Union lasted six decades.
Restoration until the loss of Brazil (1640-1822)
Dissatisfied with the union, Portuguese noblemen organised a rebellion and restored Portuguese independence in 1640 under King João IV of the House of Braganza. In the 18th century many Portuguese emigrated to Brazil, establishing a firm stronghold in South America. It was also an age of enlightment under Prime Minister Sebastião de Melo, who was heavily influenced by successful governance of the United Kingdom. As he held the title Marquis of Pombal his reign is often referred to as the Pombaline era.
Lisbon was destroyed by a major eathquake in 1755, and in 1762 Spain invaded Portugal aa part of the Seven Years' War, but retreated a year later. Together with political turmoil this led to a weakening of the Portugese state in the wake of the Napoleonic era that would turn Europe upside down in the early 19th century. In 1807 Napoleon invaded Portugal, causing Prince João VI to move the court to Brazil.
After Napoleon's defeat in 1815 the United Kingdom of Brazil, Portugal and the Algarves was declared, but João remained in Brazil until 1820. As Brazil's governance structures had developed rapidly during the Napoleonic era, the country declared independence in 1822 with João's son Pedro as its first emperor.
The demise of the House of Braganza (1822-1910)
When João VI died in 1826, a succession crisis broke out between supporters of Pedro's daughter Maria II and Pedro's brother Miguel. The former won the conflict in 1834. Her son Pedro V reigned from 1853 to 1861, and was succeeded by his brother Luís I. His successor Carlos I was assassinated in 1908, and his son Manuel only reigned for two years as a revolution in 1910 brought an end to the Portuguese monarchy.
Early republic and Estado Novo (1910-1974)
The early years of the Portuguese Republic were rather chaotic. After 23 years of turmoil Salazar took power in 1933, establishing a right-wing dicatorship that would last until 1974.
During the Second World War Portugal remained neutral. Although the country's regime was ideologically similar to Fascist Italy, its ties to the United Kingdom remained strong, and it was in Portugal's interest to protect its maritime interests. As Spain remained neutral as well Portugal was well-situated to avoid the hardships of the Second World War.
After the war Portugal remained quite isolated due to its right-wing regime, but it did join NATO. The model of the Estado Novo aimed to be self-reliant and modeled the colonies as Portuguese provinces with a conservative and nationalistic vision. Economically Portugal remained far behind Western Europe and many Portuguese went to France for manufacturing jobs. In 1974 the Estado Novo suddenly came to an end after the bloodless Carnation Revolution and a left-wing government took over.
Meanwhile Portugal had lost two more colonial possessions in 1961: a small port in Africa and Goa in India. And in the other colonies rebellions broke out which cost more and more of Portugal's men and resources, adding to public discontent.
Democracy (1974-date)
The Carnation Revolution was a bloodless left-wing military coup, and led the way to the independence of Portugal's African colonies and East Timor (Timor Leste), although the latter was immediately occupied by Indonesia. A new democratic government was formed in 1976 which opened the way to EEC membership in 1986.
Portugal suffered a lot from the Global Financial Crisis that started in 2008. The country's banks needed so much capital to cover losses that the government itself was forced to ask financial assistance from the IMF and EU. The result was a large cut in government expenses which caused a lot of unemployment. By 2018 these conditions have improved a lot, but the country remains at risk of international financial shocks.
Currency
Dinheiro (1168-1433)
Portugal's first money dates back to the establishment of a kingdom in 1168. Coins of half Dinheiro (Mealha) and Dinheiro were minted similar to the Spanish dinero. The unit of account was Libra = 20 Soldos = 240 Dinheiros, based on the Caroligian system that was used across Europe during the early Middle Ages (and equal to the British pre-decimal system used until 1971).
A gold Morabatino worth 15 Soldos was introduced around 1200, and a century later the silver Tornês (from the French Denier Tournois) worth 5½ Soldos.
The debasement of the dinheiro led to the introduction of the gold Dobra (6 Libras) and the silver Real (10 Soldos) in 1380. Other denominations include the billon Pilarte at 7 Dinheiros.
Real (1433-1910)
In 1433 a new silver coin with the name Real Branco worth 3½ Libra was made the unit of account. As such it was worth 840 old Dinheiros. For almost 5 centuries, the Real (plural Reis) would remain the primary unit of account in Portugal. Other fixed denominations existed, such as the Vintém of 20 Reis and the Tostão of 100 Reis.
Some gold and silver coins fluctuated in value. The gold Cruzado was initially set at 253 Reis in 1457, but rose in value to 324 in 1472 before reaching 400 Reis in 1517. Minting ceased in 1555 but its value would continue to rise over time.
A silver Cruzado was introduced in 1642, two years after the restoration of Portugal's independence. It was worth 400 Reis, equal to the old gold Cruzado, which had meanwhile appreciated to 750 Reis. The silver Cruzado was revalued to 480 Reis in 1688, and would remain that way until 1835. From that year the minting of 'odd' denominations ended and new coins were fit for a decimal system. As the Real had lost so much value over time, the Milreis (1000 Reis) became the practical unit of account.
During the second half of the 19th century a Milreis was valued at US$ 1.08 or approximately 4 Shillings 5 Pence in British currency (£1 = 4,503 Reis)
Escudo (1910-1998)
The new republican government replaced the Milreis with the Escudo at par, dividing it in 100 Centavos. Prices were written in the form 1$23 (1.23 Esc), similar to the notation of Milreis (1$000).
Although initially a stable currency, the effects of the First World War elsewhere in Europe caused strong devaluations across the continent including Portugal. From 1924 to 1931, it fell from 4.5/£ to 110/£. In 1939 the Escudo was pegged to the US Dollar at 27$50 per USD.
After World War 2 the Escudo was revalued at 25/$ but fell to 28$75 per USD in 1949. The Estado Novo's very conservative fiscal policies kept the currency very stable (but at the expense of slow economic development). By 1974 the USD had even dropped to 25$50.
After the Carnation Revolution the Escudo fell sharply. In 1980 it was worth 50/$ and in 1985 even as low as 170/$. Against the Deutschmark the Escudo fell from 7.2/DM in the 1960's to 27/DM in 1980 and 88/DM in 1990.
The Euro replaced the Escudo in 1999 (physical money in 2002) at a rate of 200$482 per Euro.
Portuguese overseas currency
Portuguese overseas territories usually followed homeland currency and coins. Local issues were minted in case of currency shortages.
In 1935 the Banco Ultramarino started issuing its own Escudo for overseas African territories, such as Mozambique, Angola, São Tomé & Principe, Guine and Cabo Verde. Except for Cabo Verde these have all been replaced by other national currencies, but the Escudo of Cabo Verde still retains its old peg with Portugal, but now with the Euro at 200$482.
Goa
Portuguese India always minted its own money based on the Rupia, which was at par with the Indian Rupee. The Rupia was replaced by the Escudo in 1958 at a rate of 5 Escudos per Rupia.
Macao and East Timor
Because of the popularity of Spanish Dollars (Mexican Pesos) in the Far East, Macao and East Timor used the Pataca. The first coins were minted in 1952. Macao still uses the Pataca to this day, but East Timor switched to the Escudo in 1958.
Azores and Madeira
The Atlantic archipelagos of the Azores and Madeira used the Real Insulano, a local form of homeland currency but traded at a discount of 25%. Madeira switched to Portuguese currency in the second half of the 19th century, but The Azores used the local currency until 1931. Both archipelagos minted their own coins, Madeira until 1865 and Azores until 1901.
Azorean banknote of 10$000 Reis Insulanos dated 1910 but used from 1918 to 1931.
In the 1980's Portugal issued commemorative coins to celebrate their autonomy, but contrary to the hopes of certain collectors these are just Portuguese coins.
Numista catalogue:
Portugal:
https://en.numista.com/catalogue/portugal-1.html
Azores:
https://en.numista.com/catalogue/acores-1.html
Madeira:
https://en.numista.com/catalogue/madere-1.html
Brazil:
https://en.numista.com/catalogue/bresil-1.html
Cape Verde:
https://en.numista.com/catalogue/cap-vert-1.html
São Tomé & Principe:
https://en.numista.com/catalogue/sao_tome-et-principe-1.html
Portuguese Guinea:
https://en.numista.com/catalogue/guinee_bissau-1.html
Angola:
https://en.numista.com/catalogue/angola-1.html
Mozambique:
https://en.numista.com/catalogue/mozambique-1.html
Goa:
https://en.numista.com/catalogue/inde_portugaise-1.html
Macao:
https://en.numista.com/catalogue/macau-1.html
East Timor:
https://en.numista.com/catalogue/portuguese-timor-1.html
Portuguese Malacca:
https://en.numista.com/catalogue/peninsule_malaise-4.html#devise1209
