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Portugal is moving deeper into the 21st century in more ways than one as it struggles to take its place among the leading capitalist economies of western Europe.

Portugal today is a land in transition. The country is long past the quasifascism of the Salazar era and the leftist excesses (including revolution) that followed when the government fell in 1974. Portugal has moved forward since then, although its growth rate still runs at only half the productivity rate of the E.U. average.

An increasing trend toward revitalization has targeted the horribly inefficient state-run companies, including the national bus company. Banks and other financial institutions, newspapers, petroleum refineries, and food processors, among others, continue to fall into private hands.

Workers, however, still earn only about a third of the pay of their counterparts in the United Kingdom and France. Nearly half of the country's residents can barely read or do simple math, according to a post-millennium literacy study. One-quarter of Portuguese households remain below the poverty level.

Portugal joined the European Union in 1986, instigating a major overhaul of the country. Fellow members of the European Union, along with investors in the United States and elsewhere, continue to pump money into Portugal, fueling industry and improving infrastructure. The use of that money is apparent in vastly improved railways, new highways, better schools, more advanced hospitals, and vastly upgraded port and airport facilities. Telecommunications and transport are improving, and greater numbers of young Portuguese are receiving on-the-job training to help them compete in the modern world, especially in the computer industry. Resort hotels continue to sprout around the country, and many old palaces are being reconditioned and opened to paying guests for the first time in their long histories.

Regrettably, however, all this refurbishing has led to Portugal's becoming quite expensive. Before the late 1990s, it was the unequivocal bargain-vacation paradise of western Europe. Now, in the 21st century, its hotels and restaurants are as expensive as those elsewhere in Europe -- although, even in Lisbon, the prices are nowhere near as staggering as those in London, Paris, or Oslo.

There's a general feeling of optimism in Portugal; in spite of a world economic downturn, the Portuguese have high hopes for the new century. Lisbon's sidewalks are as crowded in the evening as Madrid's. Young Portuguese are much better tuned in to Europe than their parents were. The younger generation is as well versed in the electronic music coming out of London and Los Angeles as in fado repertoires, and more taken with French and Spanish films than with Portuguese lyric poetry. Still, as Portugal advances with determination deeper into the 21st century, its people retain pride in their historic culture.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.