Portuguese Prime Minister António de Oliveira Salazar saw Francisco Franco as a kindred spirit, with both leaders being autocratic and against the socialist Republican Spain.

Salazar also sought to make his country less reliant on the United Kingdom and so the Iberian Pact was one of many treaties signed between Portugal and foreign powers, including Nazi Germany and Fascist Italy, as a means of expanding Portuguese influence.

[5][6] Spain was motivated with its desire to remain neutral in what it saw was an inevitable future war between the United Kingdom and Germany, and it hoped that a treaty would detach Portugal from British influence.

After the end of the Catalonia Offensive, Salazar asked Luís Teixeira de Sampaio [pt] to write a broader and balanced draft treaty, which was proposed to the Spanish ambassador on 9 February 1939.

[10] Following this and the Fall of France, an additional protocol to the pact was signed on 29 July 1940,[8] which reinforced the neutrality aspects of the treaty and required consultations and synchronisation of strategies to ensure common interests were protected.

In December 1942, as the outcome of the war seemed to have turned to favour the Allies, Spanish Foreign Minister Francisco Gómez-Jordana Sousa announced the Iberian Bloc, seeking to maintain the neutrality of Spain and Portugal.