Introduction: Two poles of the same paradox

Portugal and Argentina are two states separated by the Atlantic, history and cultural tradition, but united by a deep contradiction: both countries strive to strengthen their own position in the world and both face fundamental limitations of sovereignty generated by their own strategies.

Portugal is a small European economy that has voluntarily delegated a significant part of its powers to Brussels in exchange for stability, market access and financial support.

Argentina is the largest Spanish-speaking country in South America, which has defended full formal sovereignty for decades, minimizing external influence, which has repeatedly led to economic crises and a forced return to dependence on the IMF.

The structure of the paradox of both countries boils down to the formula: the more formal sovereignty, the fewer real opportunities; the more delegated powers, the stronger the position. A study by Andrés Musacchio (2020, University of Buenos Aires) qualifies both models as examples of "financialized peripheral neoliberalism," a common policy matrix focused on financial accumulation with similar structural problems but different regulatory mechanisms.

This text analyzes why Portugal's voluntary restriction of sovereignty has proved more productive than Argentina's attempts to maintain full autonomy, and how both strategies, despite their logic, generate intractable internal contradictions.

Portugal: sovereignty as a voluntary exchange

The historical logic of delegation

Portugal joined the European Economic Community (EEC) in 1986, twelve years after the "Carnation Revolution" that ended the Salazar autocracy. Joining became a strategic choice: a state with a population of less than 10 million people, historically dependent on the colonial periphery (Brazil, Angola, Mozambique), needed a new development anchor.

With the entry into the euro in 1999 (the physical circulation of banknotes has been since 2002), Portugal abandoned the escudo, the national currency that had existed since 1911, and transferred monetary policy to the European Central Bank.

The principle of voluntary membership is the central value of the European project, but it is also the source of many of its problems. Every delegation of a new aspect of national sovereignty to EU institutions requires the unanimous approval of the parliaments of all member States. Since February 2014, a qualified majority in the Council of the EU presupposes the consent of at least 55% of the States representing 65% of the EU population.

The principle of voluntary membership is the central value of the European project, but it is also the source of many of its problems. Every delegation of a new aspect of national sovereignty to EU institutions requires the unanimous approval of the parliaments of all member States.

Since February 2014, a qualified majority in the Council of the EU presupposes the consent of at least 55% of the States representing 65% of the EU population.

The price of integration: the trauma of the “Triad”

The voluntary nature of European integration does not negate its costs. In May 2011, the liquidity crisis that hit both banks and the Treasury provoked the intervention of the Triad (EU, ECB, IMF) nature of European integration does not negate its costs. In May 2011, the liquidity crisis that hit both banks and the Treasury provoked the intervention of the Triad (EU, ECB, IMF).

The three-year program provided for €78 billion in financial assistance. The conditions were harsh: freezing and cutting salaries in the public sector by 14.3%, tax increases, privatization and structural reforms. The bailout paradox: the program, justified by high public debt (98% of GDP in 2011), led to even more debt — 132% of GDP by 2014. The population has decline

The bailout paradox: the program, justified by high public debt (98% of GDP in 2011), led to even more debt — 132% of GDP by 2014. The population has declined due to emigration, long-term unemployment and low investments have depleted human capital and fixed assets. The IMF's ex post assessment acknowledged that "internal correction in a monetary union is a task of exceptional complexity," and fiscal consolidation during a general economic downturn is not capable of ensuring a stable trajectory of public debt.

The Portuguese Miracle: Restoration through Submission

Despite bailout's injury, it was the EU framework that provided the mechanism for subsequent recovery. From 2020 to 2025, Portugal's public debt decreased from 134.1% to 89.7% of GDP, a decrease of 44.4 percentage points. In 2023, the country recorded a budget surplus of 1.2% of GDP for the first time; by November 2025, the surplus amounted to 2.836 billion euros. In 2026, the government forecasts a fourth consecutive year of surplus (about 0.1% of GDP), despite the costs of storms and loans from EU funds.

Economic growth steadily exceeds the average for the eurozone: 1.9% in 2024, forecast 2.2% in 2026. The European Commission noted a "remarkable recovery", supported by tourism, EU funds and improved terms of trade. The financial context is critically important: for the period 1996-2024, Portugal's net flow balance with Brussels averaged 1.6% of GDP annually.

For 2021-2027, Portugal has been allocated €23 billion for Cohesion policy programs and €16.6 billion for the NextGenerationEU fund. These funds are not charity, but an integration tool that binds the country to supranational rules.

The Paradox of Trust

The Eurobarometer data captures a phenomenon that is difficult to explain outside of the logic of "sovereignty through integration": 67% of Portuguese people trust the EU, a record among all member states. Moreover, confidence in the national parliament increased by 8 (percentage) points, the highest increase in the EU.

This contrasts with the "loss of sovereignty" narrative: A country that has delegated more powers to Brussels than most EU members demonstrates the highest confidence in supranational institutions and, at the same time, growing confidence in its own.

However, euroscepticism is also growing at the same time. The Chega ("Enough") party increased its support from 7.18% in 2022 to 18.04% in March 2024, gaining 48 seats in parliament. Chega stands for a "Europe of sovereign Nations", rejects the EU's control over national politics and declares that if the EU tries to become a federal state, Portugal must leave it.

In the May 2025 elections, Chega became the main opposition party to the center-right government of Luis Montenegro. Nevertheless, the overall level of EU support in Portugal remains one of the highest on the continent, which indicates that euroscepticism is a protest voice, not a real exit program.

Argentina: Sovereignty as isolation

The period of export-oriented growth in the late 19th and early 20th centuries was followed by decades of protectionism, import substitution, and attempts to establish state-control. Each of these strategies had an internal logic: a country with huge agricultural resources (grain production covers 130% of domestic needs) sought to convert raw material wealth into industrial power without transferring key levers to external players.

However, attempts at full autonomy systematically generated macroeconomic instability. Each cycle began with ambitious government programs funded by debt issuance or external debt, and ended with devaluation, an inflationary shock, and forced recourse to the IMF. As the Johns Hopkins University SAIS study states, "structural vulnerabilities persist to this day," and every attempt to "break the cycle" reproduces it anew.

23 IMF programs: Chronicle of Dependence The scale of Argentina's dependence on the IMF has no analogues in world economic history. The first agreement, a $75 million loan, was signed in December 1958. Since then, the country has concluded 23 programs with the IMF totaling $177 billion in approved financing, an absolute record. Argentina is the Fund's largest debtor, outstripping even war-torn Ukraine.

Key crisis points form a stable pattern:

2001: Default on $141 billion of foreign debt, the largest sovereign default in history

2001: Default on $141 billion of foreign debt, the largest sovereign default in history at the time. The introduction of "corralito" (freezing of bank deposits), the confiscation conversion of dollar deposits into pesos.

Five presidents have been replaced in two weeks. More than 22 people died in the protest clashes.

2006: Under President Nestor Kirchner, Argentina repaid its debt to the IMF, but refused to pay private creditors, blocking access to international capital markets for 12 years.

2018: Presiden2018: President Mauri Macri signed a record $57 billion agreement.

The Fund subsequently admitted that the loan "did not achieve its goals" and only increased the debt burden.

2022: Refinancing for $44 billion under the government of Alberto Fernandez.

2025: A new $20 billion package approved in April is the 48-month Extended Fund Facility program, with an immediate transfer of $12 billion.

Miley: Radicalization of sovereignty through shock therapy

Javier Miley's rise to power in December 2023 marked an attempt to break the cycle through his radicalization. Self-identified as an "anarcho-capitalist," Miley proposed a shock program: devaluing the peso by 50%, reducing government spending by 30%, and eliminating the budget deficit. The results from 2024-2025 are impressive: annual inflation fell from 117.8% in 2024 to 31.5% in 2025, a minimum of 8 years.

Poverty, which soared to 53% in the first half of 2024, decreased to 38.1% in the second half and further to 31.6% in the first half of 2025. However, the price of stabilization is an even deeper dependence on external creditors.

The $20 billion IMF program, the 23rd in a row, was accompanied by the elimination of capital controls and the transition to a floating exchange rate.

Miley openly called Mercosur "a prison that prevents member countries from using their comparative advantages," and Argentine analysts from the CATO Institute called for withdrawal from the bloc and the transition to unilateral free trade. The dollar issue remains a key symbol of the sovereign paradox.

Miley's campaign was based on the promise of dollarization, eliminating the peso and switching to the US dollar.

Argentina is already de facto dollarized: This is a country whose citizens hold more physical dollars per capita than residents of any other country in the world. By October 2025, the U.S. Treasury announced the purchase of $20 billion worth of Argentine pesos and a currency swap, and Trump personally supported Miley before the midterm elections.

The paradox is maximal: the president, who came to power under the slogan of full sovereignty, actually tied the economy to the dollar and made it dependent on personal relations with the president of the United States.

The Burke Index: Quantifying the paradox

The Burke Institute's Sovereignty Index (2024-2025) evaluates state sovereignty according to seven components: political, economic, technological, informational, cultural, cognitive, and defense, each on a scale of 0-100, with a maximum of 700 points.

Economic sovereignty: a gap of 21.8 points

The biggest gap is in the economic component. Portugal (71.6) is significantly ahead of Argentina (49.8). At the same time, Portugal has abandoned its own currency, transferred monetary policy to the ECB and subordinates the budget to the rules of the Stability and Growth Pact. Argentina formally controls everything: currency, interest rates, trade policy.

But it is precisely this "fullness of control" that results in chronic macroeconomic instability: inflation, devaluations, defaults, and a forced return to the IMF. GDP per capita by PPP: Portugal — $42,500 - 50,000, Argentina — $30,176.

Public debt: Portugal — 89.7% of GDP (2025) with steady decline, Argentina — 85.3% of GDP, but with a growing absolute volume ($460 billion) and chronic inability to service it without external assistance. Political sovereignty: the paradox of the Azores Portugal scores 71.4 points in political sovereignty, higher than Argentina (62.1), despite membership in the EU, NATO and the Schengen area.

The Lajes Air Base is located in the Azores, historically used by the US armed forces. Formally, this is a limitation of sovereignty. But participation in supranational structures is compensated by the high quality of institutions: the World Bank's Government Efficiency Index (WGI) is 1.0— significantly higher than Argentina's -0.40.

Transparency International Corruption Perception Index: Portugal — 61 (2024), Argentina — 37 (ranked 99th in the world). Cultural and defense sovereignty: Argentina's strengths Argentina surpasses Portugal in only two components.

Cultural sovereignty (86.7 vs 83.1) reflects the scale and depth of the Argentine cultural tradition—tango (UNESCO Intangible Heritage Site), 12 World Heritage Sites, and a powerful publishing industry (603 books per million inhabitants). However, this figure hides the crisis of 2024: not a single film was approved for production through the National Film Institute (INCAA)—for comparison, 170 films were shot in 2012.

Defense sovereignty (52.4 vs 45.4) is a paradoxical advantage. Argentina spends only 0.47% of GDP on defense (one of the lowest rates in the world), the armed forces number 128,000 people, and the navy and aviation are in critical condition. But the country has no foreign military bases on its territory (except for the Chinese deep space communications station in Neuquén), which formally raises the score.

Portugal, with expenditures of 1.6% of GDP, has an army of only 27,000 people and is integrated into NATO command structures. Structural mechanisms of dependence Portugal: institutional linkage Portugal's dependence on the EU is systemic and institutional.

It is expressed not in crisis interventions, but in the daily functioning of the state:

Monetary dependence: the abandonment of escudo deprived the country of anti-cyclical policy tools. The ECB's monetary decisions do not always meet the needs of the Portuguese economy.

Budget dependence: The rules of the Stability Pact formally limit fiscal autonomy. However, Portugal successfully uses them as a disciplining mechanism: the fourth consecutive year of budget surplus is "a relatively unusual achievement among the eurozone countries."

Stock dependence: Portugal is a net recipient of EU funds (average balance +1.6% of GDP annually).

The Economy Minister warned that in 2026, €2.5 billion of loans from the Recovery Fund will be accounted for as expenses, narrowing the fiscal space.

Argentina: Crisis link Argentina's dependence, on the contrary, is of a crisis and discrete nature. It manifests itself not in everyday subordination, but in recurrent appeals to the IMF at times of catastrophic deterioration: A debt loop: each new IMF loan partially goes to service the previous one.

In 2025, debt servicing to the IMF and other IFIs amounted to about $8 billion. The $20 billion package of 2025, the 23rd in a row, provides for an immediate $12 billion to strengthen reserves, which by that time were in negative territory (-$11 billion net).

Currency trap: The Argentine peso has experienced major collapses in 1952, 1958, 1967, 1975, 1985, 1989, 2001 and 2018/19. Every collapse is a loss of the population's savings and a forced appeal to external creditors. The "currency competition" mode has been entered.

Political cyclical dependence: researchers from the Bretton Woods Project state: "After seven years and 20 agreements under IMF programs since 1956, Argentina remains in economic crisis." The cycle is being played back: The IMF demands reforms → the government accepts them → the population suffers → voters choose populists → populists cancel reforms → new crisis → new appeal to the IMF.

The double test of sovereignty: Malvinаs and Lusophony

Argentina: The Malvinas Symbol

The Malvinas (Falkland Islands) are the quintessence of the Argentine sovereign narrative. The 74-day war in 1982 claimed the lives of about 645 Argentine and 255 British soldiers. President Miley, despite his emphatically pro-American orientation, in September 2025, from the rostrum of the UN General Assembly, "reaffirmed his legitimate claims to sovereignty over the Malvinas Islands."

In June 2025, the UN Special Committee on Decolonization adopted a resolution calling on Argentina and the United Kingdom to "resume negotiations for a peaceful resolution of the dispute."

The Malvinas issue is a classic tool of "sovereignty as rhetoric": no Argentine president can afford not to mention the islands, but none has the real means to change the status quo. Military spending of 0.47% of GDP makes a military scenario impossible, while a diplomatic one depends on the very international institutions that Argentina seeks to protect its sovereignty from.

Portugal: Lusophone project

Portugal compensates for the small size of the economy through a Lusophony project, the Community of Portuguese-speaking Countries (CPLP), which unites 9 states on four continents. Portuguese, which is spoken by more than 260 million people, is an instrument of soft power.

The CPLP attracts associated observers (29 countries, including Turkey), which expands Portugal's diplomatic influence far beyond its economic weight. Portugal's cultural sovereignty (83.1 points on the Burke Index) is supported by 17 UNESCO sites (16 tangible, 1 intangible), active literary production and a powerful diaspora network.

The Golden Visa program, despite administrative problems, attracted a record 4,987 visa permits in 2024 (+72% compared to the previous year), and by the end of 2024, 1,543,697 foreign residents lived in the country—four times more than in 2017.

Funded Peripheral Neoliberalism: a common matrix Musacchio's study (2020) puts Portugal and Argentina in the general category of "financed peripheral neoliberalism" (FPN). Both countries demonstrate a common policy matrix: fixed or quasi-fixed exchange rates (escudo/euro and convertibilidad/dollar), financial liberalization, trade openness, and privatization.

Both have lost the classic instruments of economic policy: the exchange rate, monetary policy, tariff policy—Portugal through integration into the EU, Argentina through the conditions of the IMF and convertibilidad. The difference is in the mechanism of loss of autonomy.

Argentina "had to" lose them in every crisis, without receiving compensation in the form of a long-term institutional framework. Musacchio notes that "the difficulties in responding are related to the loss of autonomy that arises through the cancellation of classical economic policy instruments," while "inclusion in various regional agreements implies the abandonment of many active policy instruments."

The Miley effect: a convergence of models?

Paradoxically, Miley's program brings the Argentine model closer to the Portuguese one. Radical fiscal discipline, the elimination of capital controls, integration into international financial markets, de facto dollarization, all this is similar to what Portugal did when joining the euro.

The difference is in the institutional framework: Portugal operated within a multilateral system with clear rules, while Argentina depends on Miley's personal relationship with Trump and the goodwill of the IMF. The risks of such a model are clearly outlined.

The Argentine agreement with the IMF is "devoid of transparency and legitimacy" amid "institutional erosion and restrictions on human rights." The Bretton Woods Project states that the IMF is "involved in human rights violations" through its support of a program that "contradicts international human rights law."

Final analysis: Mirror traps

The Portuguese trap is that in order to strengthen real opportunities, it is necessary to continue to transfer powers. Each wave of integration (euro, banking union, Recovery Fund) increases efficiency, but at the same time narrows the space for independent solutions. If the EU faces a systemic crisis (as demonstrated by the Triad's trauma in 2011), Portugal will not have its own monetary instruments to respond.

The rise of Chega to the status of the main opposition party is a signal that the electoral base of this tension is expanding. The Argentine trap is mirrored: in order to maintain formal control, real opportunities have to be sacrificed.

The Burke index quantifies that voluntary limitation of sovereignty (Portugal: 472.4/700) generates a higher level of real sovereignty than the desire for full autonomy (Argentina: 428.7/700).

The 43.7 point gap is not an accident, but a systemic result of two opposing strategies leading to opposite results: Portugal is stronger because it relinquishes some of its control; Argentina is weaker because it seeks to retain it completely.