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               DEMOCRACY AND FINANCIAL AID

                     The fragile political situation in Portugal and the needs expressed
               by the Portuguese authorities led many European leaders and
               Portuguese government officials to engage conversations

                     The first interim Government, which took office on May 16, 1974,
               expressed its intention in “consolidating and intensifying the existing
               relations” with the EU

                     The second interim government led by Vasco Gonçalves brought
               more military to ministerial posts and started a left-leaning political turn


                     “gently apart and reticent” position regarding Europe / privileged
               relationship with the Third World countries

                     During the spring of 1975, the Portuguese political situation
               worsened


                     November 25 that year, a military coup would stop any further
               left-wing progression towards communism

                     Prior to this, in June 1975, the Commission suggested an
               economic and financial aid, so as to contribute to the country’s
               economic development and democracy

                     Two different positions:
                       - for the USA the presence of communists in the government
                         wouldn’t be tolerated, but it wouldn’t intervene
                       - for the EU, the moderates should be helped, in view of a
                         political evolution towards parliamentary democracy


                     Brussels European Council (July 16-17, 1975), any EU aid should
               be conditioned on the progress made towards pluralist democracy

                     The EU was willing to cooperate more with the country in economic
               and financial areas, as long as Portugal became a democratic state






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