Economic Organization

Section I  General Principles
 
Article 80  Fundamental Principles
The social and economic organization are based on the following principles:
a) Subordination of economic power to democratic political, power;
b) Co-existence of the public, the private, and the cooperative and social sectors with respect to the ownership of the means of production;
c) Collective ownership of means of production and land as required by the public interest; collective ownership of the natural resources;
d) Democratic planning of the economy;
e) Protection of the cooperative and social sector with respect to the ownership of the means of production;
f) Democratic intervention of the workers.
 
Article 81  Prime Duties of the State
In the economic and social sphere the prime duties of the State are:
a) To promote an increase in the social and economic well-being and the quality of life of the people, especially the most underprivileged classes;
b) To undertake the necessary corrections with respect to imbalances in the distribution of wealth and income;
c) To ensure that the productive forces are fully used, particularly by watching over the efficiency of the public sector;
d) To guide the economic and social development towards balanced growth of all sectors and regions and to progressively eliminate the economic and social differences between town and country;
e) To abolish private monopolies and to prevent their being created, as well as to suppress abuses of economic power and all practices that are harmful to the common interest;
f) To ensure that there is fair competition in business;
g) To develop economic relations with all peoples while always safeguarding national independence and the interests of the Portuguese and of the country's economy;
h) To suppress the very large estates and reorganize the very small farms;
i) To ensure that the organizations representing the workers and the organizations representing economic activities participate in determining, implementing, and controlling the main economic and social measures;
j) To protect the consumers;
l) To set up the legal and technical structures that are necessary for introducing a system of democratic economic planning;
m) To draw up a scientific and technological policy that furthers the country's development;
n) To adopt a national energies policy that is in keeping with the conservation of natural resources and ecological balances,whilst promoting international co-operation in this field.
 
Article 82  Sectors in the Ownership of the Means of Production
(1) The co-existence of three sectors with respect to the ownership of the means of production is safeguarded.

(2) The public sector comprises the means of production that belong to and are managed by the State or other public bodies.

(3) The private sector comprises the means of production that belong to or are managed by private persons or private corporate bodies, without prejudice to the provisions in the following paragraph.

(4) The cooperative and social sector comprise the following:
  1. The means of production that belong to and are managed by cooperatives in accordance with the cooperative principles;
  2. The community's means of production that belong to and are managed by local communities;
  3. The means of production that are collectively exploited by workers.
Article 83  Requirements for Collective Ownership
The law defines the ways and means of collective interference in and collective ownership of the means of production and land, as well as the criteria for fixing the corresponding compensation.
 
Article 84  Public Domain
(1) The following are part of the public domain:
  1. The territorial waters with their beds and the contiguous sea beds, as well as the lakes, lagoons, and navigable or floatable water-courses, with their respective beds;
  2. The air layers above the territory and higher than the limits recognized to owners and lessees;
  3. Mineral beds, mineral and medical water-springs, underground natural cavities in the subsoil, save the rocks, ordinary soils, and other materials habitually used for building construction purposes;
  4. The roads;
  5. The national railways;
  6. Other property classified as such by the law.
(2) The law determines what is part of the public domain of the State, what is part of the public domain of the autonomous regions and what is part of the public domain of the local authorities; it also determines the applicable rules, the conditions involving the utilization of the public domain, and the limits thereof.
 
Article 85  Nationalization Measures Carried out After 25 April 1974
(1) The re-privatization of the ownership of, or the entitlement to exploit, the means of production, and other property nationalized after 25 April 1974 are carried out only if in compliance with a framework-law adopted by the absolute majority of the Members entitled to sit in the Assembly of the Republic.

(2) Small and medium-sized businesses indirectly nationalized which are outside the basic sectors of the economy might be re-privatized in accordance with the law.
 
Article 86  Cooperatives and Experiences in Worker Self-Management
(1) The State stimulates and supports the establishment and activity of cooperatives.

(2) Fiscal and financial concessions to cooperatives and more favorable conditions for borrowing and for obtaining technical assistance are determined by law.

(3) The State supports viable experiences in worker self-management.
 
Article 87  Private Businesses
(1) The State supervises compliance with the Constitution and the law on the part of private businesses and protects small and medium-sized economically viable businesses.

(2) The State intervenes in the management of private businesses only on a temporary basis, where the law expressly provides to that effect, and, as a rule, subsequently to a judicial decision.

(3) The law determines which are the basic sectors wherein the activity of private businesses and other entities of the same nature is forbidden.
 
Article 88  Economic Activity and Foreign Investment
Economic activity and investment by foreign natural or artificial persons is regulated by law, to ensure that they contribute to the country's development and to safeguard national independence and the interests of the workers.
 
Article 89  Abandoned Means of Production
(1) Abandoned means of production may be expropriated on conditions to be laid down by law with due regard to the special situation of property of workers who have emigrated.

(2) Means of production which are unjustifiedly abandoned may also be compulsory given out on lease, or to a concessionaire, under conditions to be laid down by the law.
 
Article 90  Workers Participation in Management
Effective participation of workers in the management of the production units of the public sector has to be safeguarded.
 
Section II  Plans
 
Article 91  Objectives of the Plans
The objectives of the plans of economic and social development are to promote economic growth, a balanced development of the sectors and the regions, a fair partition of the national product among the individuals and among the regions, coordination of the economic policy with the social, educational, and cultural policies, the conservation of the ecological balances, the safeguard of the environment, and the quality of life of the Portuguese people.
 
Article 92  Nature of the Plans
The medium-term economic and social development plans as well as the annual plan - the financial picture of which appears in the Budget of the State and which contains the main guidelines for the sectorial and the regional plans - are prepared by the Government in conformity with the latter's program.
 
Article 93  Preparation of the Plans
(1) The Assembly of the Republic has the power to approve the major options corresponding to each plan and to scrutinise the respective progress reports.

(2) The bill containing the major options corresponding to each plan has to be accompanied by a report on the major overall and sectorial options that includes reasons substantiated by preparatory studies.
 
Article 94  Implementation of the Plans
The implementation of the plans is decentralized, with respect to both the regions and the sectors, without prejudice to coordination by the Government.
 
Article 95  Economic and Social Council
(1) The Economic and Social Council is the body for consultation and concertation in the economic and socialpolicies field; it participates in the preparation of the economic and social development plans and exercises the other functions given to it by the law.

(2) Membership of the Economic and Social Council is determined by the law; it does in particular include representatives of the Government, of the organizations representing the workers, of the organizations representing the economic activities, of the autonomous regions, and of the local authorities.

(3) The law also defines the way in which the Economic and Social Council is organized and operates, as well as the rights and duties of its members.
 
Section III  Agricultural, Commercial, and Industrial Policies
 
Article 96  Objectives of the Agricultural Policy
(1) The objectives of the agricultural policy are as follows:
  1. To increase agricultural production and productivity whilst equipping agriculture with adequate infrastructures and human, technical, and financial means adequate to ensure that the country is supplied in a better way and that exports raise;
  2. To promote improvement in the economic, social, and cultural situation of rural workers and farmers, the rationalization of the land-owning structures, as well as the access to ownership or possession of the land and other means of production directly used in its exploitation by those who work it;
  3. To create adequate conditions in order to attain actual equality between those who work in agriculture and the other workers and in order to avoid that the agricultural sector be ill-favored in the exchange relations with other sectors;
  4. To ensure that the land and other natural resources are rationally used and managed, as well as to safekeeping their regenerating ability;
  5. To encourage the association of farmers and direct exploitation of the land.
(2) The State promotes a policy for rural planning and for the conversion of the agricultural use of land, in conformity with the ecological and social circumstances of the country.
 
Article 97  Abolition of Very Large Estates
(1) Reshaping the size of farming units whose dimensions are excessive from the viewpoint of the objectives of the agricultural policy is provided for by the law; the latter entitles the owner of expropriated estates to compensation and to reserve for himself an area that is big enough for him to exploit it under rational and viable conditions.

(2) Expropriated land is handed over in accordance with the law, either for ownership or for possession, to small farmers, preferably family farming units, to cooperatives of rural workers or of small farmers, or to other forms of exploitation of the land by workers; these provisions do not affect the possibility of establishing a probation period for the purpose of judging whether the exploitation is effective and rational prior to transferring full property rights.
 
Article 98  Reshaping the Size of Very Small Farms
Without affecting property rights and in accordance with the law, the State promotes reshaping the size of land exploitation units whose dimensions are smaller than what is adequate from the viewpoint of the objectives of the agricultural policy; it so promotes in particular by way of legal, tax, and credit incentives the achievement of the structural integration of units or, short of that, their economic integration, notably cooperative integration, or by way of deparceling out units.
 
Article 99  Forms of Exploiting Land Belonging to Third Parties
(1) Rules governing leasing or other forms of exploiting land belonging to third parties are provided for in the law in such a way as to safeguard the stability and the legitimate interests of the farmer.

(2) Censive and colonial systems are prohibited and conditions created for farmers whereby the limited liability system in farming may be effectively abolished.
 
Article 100  State Aid
(1) In pursuing the objectives of the agricultural policy, the State, as a matter of priority, assists the small and medium-sized farmers, notably where they are part of a family exploitation unit, either individually or grouped in cooperatives, as well as the cooperatives of farmers and other forms of exploitation by workers.

(2) State aid includes in particular the following:
  1. Granting technical assistance;
  2. Support from state-owned businesses and from cooperatives engaged in marketing at stages preceding and following production;
  3. Socialization of the risks resulting from unforeseeable or uncontrollable climatic and phytopathological events;
  4. Encouragement for the association of rural workers and farmers, in particular for the setting up of cooperatives for producing, buying, selling, transforming, or providing services, as well as for other ways of exploitation by workers.
Article 101  Participation in Drawing up the Agricultural Policy
The participation through the organizations that represent them, of the rural workers and the farmers in drawing up the agricultural policy, are secured.
 
Article 102  Objectives of Commercial Policy
The objectives of the commercial policy are as follows:
a) Beneficial competition among those in trade;
b) Rationalization of the distribution chains;
c) Fight against speculative activities and restrictive trade practices;
d) Developing and diversifying the external economic relations;
e) Protecting the consumers.
 
Article 103  Objectives of Industrial Policy
The objectives of the industrial policy are as follows:
a) Increasing the industrial production against a framework of modernization, adjustment of social and economic interests, and international integration of the Portuguese economy;
b) Reinforcement of industrial and technological innovation;
c) Increasing the competition and productivity of industries;
d) Assistance to small and medium-sized businesses and, more generally, to initiatives and businesses that create jobs, increase exports or replace imports;
e) Assistance with a view to giving international prominence to Portuguese companies.
 
Section IV  Financial and Fiscal System
 
Article 104  Financial System
The structure of the financial system is laid down by law in such a way as to ensure that savings are encouraged and build up in security, and that the financial resources that are necessary for economic and social development are placed.
 
Article 105  Bank of Portugal
The Bank of Portugal, in its capacity of central bank, has exclusive rights to issue money and cooperates in theimplementation of the monetary and financial policies, in accordance with the Budget act, the objectives set out in the plans, as well as the Government's directives.
 
Article 106  Fiscal System
(1) The fiscal system aims at satisfying the financial needs of the State and other public bodies, as well as a fair partition of the incomes and the wealth.

(2) Taxes are created by law, which determines the incidence rates, concessions, and safeguards for taxpayers.

(3) No one may be compelled to pay taxes which have not been created as provided in the Constitution and whose settlement and collection are not effected in the forms laid down by law.
 
Article 107  Taxes
(1) The tax on personal income seeks to reduce inequality.  It is a single progressive tax having regard to family needs and income and tries to limit incomes to a national maximum fixed by law each year.

(2) Enterprises are taxed fundamentally on their real income.

(3) The tax on inheritances and donations are to be progressive, so as to make for equality among citizens.

(4) Consumer taxes seek to adapt the structure of consumption to the evolution of the needs of economic development and social justice, and the said taxes shall bear heavily on luxury articles.
 
Article 108  Budget
(1) The Budget of the State includes:
  1. The breakdown of the revenues and the expenditures of the State, including the revenues and expenditures of the autonomous funds and departments:
  2. The budget of the social security.
(2) The Budget is drawn up in accordance with the major options of the annual plan and takes into account statutory and contractual liabilities.

(3) The Budget is a single unit and specifies expenditure according to the applicable organic or functional classification so as to prevent the existence of secret appropriations and funds; it may also be structured according to programs.

(4) The Budget provides for the receipts necessary to cover expenditure; the rules for its implementation, the conditions for raising public loans, and the criteria under which alterations might be introduced by the Government in the articles classified organic, at the time of its implementation, with a view to its full implementation and in the framework of each budgetary program approved by the Assembly of the Republic, are laid down by law.
 
Article 109  Preparation of the Budget
(1) The Budget act is prepared, organized, adopted, and implemented in conformity with its respective framework law; the latter also provides for the rules concerning the preparation and the implementation of the budgets of the autonomous funds and departments.

(2) The draft Budget is tabled and submitted to a vote within the time frame laid down by law; the latter provides for the procedure applicable where such delays cannot be met.

(3) The draft Budget is accompanied by reports on:
  1. The foreseeable development of the major macroeconomic aggregates that have a bearing on the Budget, as well as of the money supply and its counterparts;
  2. The reasons for the differences in the anticipated receipts and expenditures with respect to the previous Budget;
  3. The public debt, the treasurer's transactions, and the treasury accounts;
  4. The situation with respect to the autonomous funds and departments;
  5. The budgetary re-allocations in favor of the autonomous regions;
  6. The financial transfers between Portugal and the outside world that have a bearing on the draft Budget;
  7. The fiscal privileges and the corresponding foreseeable loss in receipts.
Article 110  Supervision
The implementation of the Budget is supervised by the Court of Audit and the Assembly of the Republic; upon the opinion of the former, the latter scrutinizes and approves the General Accounts of the State including the social security accounts.