Portugal during World War II: Was Portugal Really Neutral?

Written By Lara Silva

Portugal was officially neutral during World War II, but was this really the case?  At the beginning of the war, Portugal was under the dictatorship of Antonio de Oliveira de Salazar who founded the Estado Novo in 1933.

On September 1, 1939, after the outbreak of the Second World War, following the invasion of Poland, Salazar declared Portugal’s neutrality to the National Assembly. 

This decision was based on ideological and economic motives. Salazar believe it gave the nation a chance to prosper economically in the sense that it could foster business opportunities with both sides and ultimately stimulate the economy. He maintained open trade with both the Allied and Axis camp throughout the war. 

Neutrality strongly boosted the Portuguese economy in four short years. It went from a 90 million dollar deficit in 1939 to a surplus of 68 million by 1943 due to its economic involvement with various nations during the war.

Portugal had always held close ties to Britain, since signing the Treaty of Windsor in 1386, the oldest alliance in history. When declaring neutrality, Salazar said that the alliance did not automatically mean that Portugal had to support the allies. 

Salazar had backed Franco’s regime during the Spanish Civil War. Due to this close tie, as well as the government’s fascist ideology, he earned the respect of both Hitler and Mussolini.

This begs the question, was Portugal really neutral during WWII? Let’s take a look.

Salazar’s Estado Novo & Hitler’s Nazi Germany

Ideology and Relations

Both Fascist leaders, António Salazar and Adolf Hitler shared similar ideologies. One of the largest similarities between the Portuguese regime and Hitler’s Third Reich was the anti-communist views of both that actually drew elite individuals of the Estado Novo towards Hitler. 

Nevertheless, Salazar publicly expressed in press conferences that his wish to neutralize communist ideas did not include extremist policies of violence to eliminate leftist views, according to Pimentel, Flunser, and Ninhos in the book “Salazar, Portugal, e o Holocausto”.

This can, of course, is easily debunked with the violence of Salazar’s police PIDE that violently persecuted and tortured members of the communist party.

Still, the Estado Novo officially disagreed with Germany’s violent policies and even before the war, suspected Hitler would use extreme measures of mass murder to eliminate his opponents. 

Despite clear differences in both fascist regimes, Salazar has been placed in a category with Hitler due to his strong opposition to Communism and his repressive government, leading to their positive relationship in trade.

There were various Germanophile and Hitlerophile inclinations present in Salazar’s dictatorship. Despite Portugal’s official stance of neutrality and its alliance with the UK, the oldest of mankind, the Estado Novo demonstrated pro-German ideologies. 

In 1933, Salazar criticized European politics for marginalizing the nation of Germany, as well as the “idealistic” view after World War I of the Treaty of Versailles, calling it a “work of destruction”, an incredibly Pro-German ideology.

Furthermore, in 1941, Salazar and the actual government of Portugal expressed public support for the nation of Germany.

Portugal’s Trade with Germany and the Allies during WW2

Let’s be clear, Portugal used its official neutrality stance to trade with both sides of the war. However, it’s clear that its collaboration with Hitler’s Nazi Germany marks a dark time in Portuguese history, one that is too often left unmentioned.

Despite a blockade restriction on Portuguese exports to Germany, Salazar frequently exported contraband in violation of the UK’s orders. Salazar took advantage of the war to benefit Portugal’s economy by charging high tariffs on the exports, a policy carried with special emphasis on wolfram, a metal used in the production of weaponry including missiles and grenades.

Salazar exported wolfram to both Germany and the allies. As Portuguese historian, Lidia Aguiar wrote, “it was with Portugal’s […] wolfram that a large part of the Second World War’s armaments were manufactured, both on the side of the Nazis and the Allies”.

Salazar was able to use Portugal’s extensive wolfram reserves in the northern parts of the country and extend the trade balance with both the Allies and the Axis whilst charging elevated tariffs due to the high demand. 

In 1941, Germany and Portugal signed a secret agreement concerning the trade of sardines for war material. On April 31, 1943, an agreement was signed regarding the trade of wolfram for weapons. By 1944, Portugal had exported 3,100 metric tons of wolfram to Germany.

In March of that year, the Allies presented a formal demand to Salazar that he stop the wolfram trade to Germany, which he eventually accepted. Salazar accepted it because Portugal and England shared the oldest alliance in history.

Despite the immense trade of sardines, wolfram, and weaponry between Germany and Portugal, Salazar did not fulfill every import demanded by Hitler, substantially to keep the Allies on Portugal’s “good side” and maintain its stance of neutrality.  

The Bank of Portugal & Nazi Gold

To this day the Bank of Portugal receives a negative image for its Nazi collaboration, as Portugal knew the German payment in the form of gold was stolen from conquered nations and victims of the Holocaust.

The Bank of Portugal still holds gold bars with the swastika engraved on them, according to Marlise Simons. The gold payments were key in maintaining the Portuguese currency’s stability and reducing inflation during and in the years following the war.

For both nations, paying in gold was far safer than with paper currencies, but this led to a constant dispute with the Allies concerning the origins of the gold.

Even though the Portuguese constantly deny any Portuguese affiliation with the Nazis, in 2001, documents were founds in the Canfranc train station in Spain, that prove Portugal imported at least 228 tonnes of Nazi gold to Germany, according to Publico.

Antonio Louça, who wrote a 40 thesis regarding the Nazi gold situation, argues that as early as 1942 the Allies notified all Western countries, including Portugal, that the Nazis were using stolen gold as a form of payment through Swiss banks.

That same year, in January, a first secret agreement between the two nations was signed granting export licenses for the sale of up to 2,800 tons of wolfram and Salazar was completely aware of the origins of the gold used to pay these.

Portugal & Jewish Refugees

Portugal was one of the last nations in Europe to get involved in the refugee crisis created by Nazi Germany. At the time, Portugal’s Jewish community consisted of a population of under one thousand people and migration was not booming.

Salazar was content with this. He was against immigration, promoting nationalistic rhetoric. He believed foreigners would diminish the “national spirit” and create possible social tensions that would generate a political climate for war. 

During the war, Salazar severely restricted entry to Portugal, even though he was aware of the horrors of Jewish treatment in Nazi Germany.

In 1939, Salazar’s police took stricter control and dismantled criminal networks responsible for falsifying passports for refugees.

Circular 14 was installed on November 11. The Estado Novo sent it to all the Portuguese consuls through Europe. It made fleeing Nazi Germany very difficult, although it allowed consuls to continue granting Portuguese transit visas to some, it discriminated against those with contested nationality, the stateless, Russian citizens, and more. 

Salazar’s fascist ideology, which favored the Nazis, was so publicly demonstrated that the Portuguese were not invited to the Evian Conference in July of 1938, where the safety of Jewish refugees was discussed, according to Milgram’s book “Portugal, the Consuls, and the Jewish Refugees”.

Salazar fought back against Jewish refugees coming to Portugal. Veiga Simões, the Portuguese ambassador in Berlin, advocated that Portugal should adopt Germany’s policy of stamping Jewish passports with the letter J, in order for these to lose the right to return to their nation of origin. Salazar accepted this horrific suggestion, according to Milgram. 

However, organizations and individuals fought back against this injustice, such as Aristides de Sousa Mendes. 

Aristides de Sousa Mendes

Aristides de Sousa Mendes was a Portuguese consul during World War II known for defying the orders of Salazar during the Estado Novo and issuing visas and passports to a number of refugees fleeing Nazi Germany.

Sousa Mendes thus disobeyed a powerful dictator which was unheard of during the Estado Novo for a diplomatic official to do and get away with. He disobeyed Circular 14, believing it was inhumane and racist.

Not only did he disobey Circular 14, but he also issued passports with false identities to people of military age in France which was a crime. 

No one knows for sure how many visas Sousa Mendes issued, but some historians say he helped around 30,000 refugees, many of which were Jewish. 

This illegal act of courage that went against Salazar’s will led to Mendes’s prosecution and loss of pension, leaving him bankrupt, but remembered as a Portuguese hero forever.

Final Thoughts: Was Portugal neutral during WWII?

While many would disagree, we have to say no. In fact, Salazar declared three days of national mourning after Hitler’s death. This suggests a certain partiality when it came to picking sides. The same was not done when Franklin Delano Roosevelt died that same month in 1945.

Salazar was also well aware of the origins of the gold provided to the Bank of Portugal and the horrific atrocities that it represented. Moreover, Salazar’s disregard for the lives of Jewish refugees made it clear that helping victims escape the holocaust was not a priority for the fascist dictator. 

Many completely disregard Portugal’s collaboration with Nazi Germany, but the facts are all there. Salazar’s exports of sardines and wolfram, as well as Hitler’s exports of weaponry, prove to be a strong collaboration.

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