Under authoritarian rule for much of this century, it was notoriously backward, with low levels of education and a largely rural population. EU membership, achieved at the same time as Spain in 1986, has brought great benefits. Unemployment has fallen to 5 percent. After accession, private investment flowed in, as did massive EU funding. But now inward private investment flows are declining, and billions of dollars of future regional aid are being put in question as the East Europeans stake their own claim to regional assistance.
Local industry is well aware of the threat and is moving to counter it.
Firstly, of course, there will be higher competition both in terms of the funds from the EU, and in the more complicated marketing facing our companies. But on the other hand, we can see this as an opportunity, because Portuguese companies will have a new market and the possibilities of making interesting partnerships with companies from the Eastern countries. Quesado says the challenge will be for local companies to use their design, quality control, and marketing expertise. Those are the skills which they have particularly developed in the last 10 years. He acknowledges that the Eastern European countries have some advantages over Portugal, notably in the education and technical skill of their workers.