António de Oliveira Salazar
Despite the authoritarian character of the regime, Portugal did not experience the same levels of international isolation as Spain did following World War II. Unlike Spain, Portugal under Salazar was accepted into the Marshall Plan (1947–1948) in return for the aid it gave to the Allies during the final stages of the war. Furthermore, also unlike Spain, it was one of the 12 founding members of the North Atlantic Treaty Organisation (NATO) in 1949, a reflection of Portugal's role as an ally against communism during the Cold War in spite of its status as the only non-democratic founder. In 1950, Portugal joined the European Payments Union and participated in the founding of the European Free Trade Association (EFTA) in 1960 and the Organisation for Economic Co-operation and Development in 1961. It joined the General Agreement on Tariffs and Trade in 1962, and finally, Portugal signed a free trade agreement with the European Economic Community in 1972, still under the auspices of the "Estado Novo".
António de Oliveira Salazar
Salazar thought regarding World War II, "a German victory spelt disaster for the rule of law and for peripheral, agricultural, countries such as Portugal." Salazar's dislike of the Nazi regime in Germany and its imperial ambitions was tempered only by his view of the German Reich as a bastion against the spread of communism rather than an allied nation. He had favoured the Spanish nationalist cause out of fear of a communist invasion of Portugal, yet he was uneasy at the prospect of a Spanish government bolstered by strong ties with the Axis powers. Salazar's policy of neutrality for Portugal in World War II thus included a strategic component. The country still held overseas territories that Portugal could not defend from military attack. Siding with the Axis would have brought Portugal into conflict with Britain, likely resulting in the loss of its colonies, while siding with the Allies risked the security of the home country on the mainland. As the price to pay for remaining neutral, Portugal continued to export tungsten and other commodities to both the Axis (via Switzerland, partly) and the Allied countries.
On 1 September 1939, at the start of World War II, the Portuguese Government announced that the 600-year-old Anglo-Portuguese Alliance remained intact, but that since the British did not seek Portuguese assistance, Portugal was free to remain neutral in the war and would do so. In an aide-mémoire of 5 September 1939, the British Government confirmed the understanding.