The Portuguese Republic is situated in the Iberian Peninsula at the westernmost edge of mainland Europe, between Spain and the Atlantic Ocean. Since joining the European Community in 1986, Portugal’s economy has become diversified, relying primarily on the service sector.
Over the past twenty years, consecutive administrations have privatized a number of state-run enterprises and liberalized the economic system in the financial and telecommunication industries. The economy progressed by more than the average of the EU in 1990, however, it declined between 2001 and 2008. Portugal’s productivity and growth are challenged by the country’s inefficient educational system and inflexible labor market. Its low growth and high levels of national debt have made the economy susceptible to instability. Despite austerity measures in place, some investors are wary about the administration’s capability to fulfill targets and make up for its sovereign debt.
The country has a stable banking system with the Banco de Portugal being an integral part of the European System of Central Banks. Prior to joining the eurozone on January 1, 1999, Portugal’s national currency was the Portuguese escudo. The escudo was also used in Portugal’s autonomous regions of Azores and Madeira. The currency name was derived from the “scutum shield” and was divided into 100 centavos. It was introduced on May 22, 1911, following the 1910 Republican revolution. It replaced the Portuguese real at the rate of 1,000 reis to 1 escudo.
Portuguese Escudo banknotes featured significant personalities from Portuguese history. The last series issued before the shift to the euro illustrated the Age of Discovery depicting Portuguese historian Joao de Barros who was also called the Portuguese Livy, navigator Pedro Alvares Cabral, mariner Bartolomeu Dias, Portuguese explorer Vasco de Gama, and Henry the Navigator. Additionally, the last issue of the 100-escudo denomination celebrated Portuguese writer and poet Fernando Pessoa.