Portugal under Dictator António de Oliveira Salazar on the one hand feels bound by the century-old Alliance with Great Britain, but is at the same time under pressure of his bigger Neighbor, Spain under the Caudillo Francisco Franco. Currently, it delivers important resources like rubber and tungsten to both sides, and Spies of all kinds stumble upon each other in Lisboa. But secretly, Salazar (a very Catholic defender of a corporatist state, but feels repulsed by the "pagan" Nazis) expects a victory of the Allies in World War II.
The country itself is still a one-party state with a state-run workers' organisation and a secret police, the PIDE.