In foreign policy, Sanguinetti's government recognized and established diplomatic relations with the People's Republic of China, and signed the Alvorada Act, which added Uruguay to the regional integration process, which later led to the creation of the Southern Common Market.

Sanguinetti Coirolo was born in Montevideo on January 6, 1936, to a middle-class Italian-Uruguayan family from the town of Chiavari near the city of Genoa.

In March 1972, the new President, also from the PC Party, Juan María Bordaberry, brought him to the government once again as Minister for Education and Culture.

During the following years, Sanguinetti worked as a journalist, working from a viewpoint that was critical of the de facto Government, in El Día Newspaper (1973–1981), Visión Newspaper (since 1974, as an opinion columnist, a collaboration which he has continued up until today), and in the weekly publication Correo de los Viernes (established by him in 1981 and edited until 1984), as well as in the promotion of cultural and sports activities as the President of the Regional UNESCO Centre for the promotion of books in South America (1975–1984) and Vice-President of the popular Peñarol Football Club.

Alfonsín had already been negotiating an ambitious agreement to dismantle tariffs in bilateral trade with the Brazilian José Sarney; now, Sanguinetti was included in an open field project that adopted a three-country shape and that gained impulse from the summit of the three presidents which the Uruguayan had organized in Colonia on 6 February 1988.

In his first presidential term, the Uruguayan economy, which had suffered from a deep depression until 1985, registered positive indicators with production growth, a reduction in inflation, stabilization of unemployment and an increase in exports.

The result of this consensus was the National Agreement which was signed on 1 April 1986 by PC, PN, the left-wing Broad Front (FA) and the conservative Unión Cívica (UC).

Towards the end of his presidency, in spite of the agreements reached for its re-financing, Uruguay's foreign debt kept on increasing, always slightly below GDP, which was also reduced to a virtually nonexistent growth rate.

Many opposition leaders and human-right organizations fought for truth and justice, and hundreds of cases were brought to the courts; but the military refused to cooperate, a political crisis was about to take place and, at the end of 1986, the very controversial Law on the Expiration of the Punitive Claims of the State was passed by the Parliament.

On 1 March 1990, Sanguinetti handed over the Presidency to Luis Alberto Lacalle, the PN candidate who had won the elections on 26 November 1989.

Sanguinetti remained committed to journalism and to academic activities as well as to the internal politics of his party as the leader of the Batllist Forum, which had a Social Democratic ideology, the most important faction of PC along with Batllismo Unido, headed by Jorge Batlle.

Among the several prominent politicians who served in his government can be mentioned: Enrique V. Iglesias, Antonio Marchesano, Ricardo Zerbino, Juan Vicente Chiarino, Adela Reta, Hugo Fernández Faingold, Luis Brezzo, Alejandro Atchugarry and Ariel Davrieux.

Opposition leader Wilson Ferreira Aldunate played a key role in the definition of the most difficult issues for the democratic institutions.

Sanguinetti sought a second term in the 1994 presidential elections on 27 November, which he won with 24.7% of the vote, beating Tabaré Vázquez of the Encuentro Progresista-Frente Amplio (EP-FA) coalition, the other PC candidates - Jorge Batlle and Jorge Pacheco - as well as the three PN candidates, the strongest of which was Alberto Volonté who received 14.9% of the vote.

Sanguinetti formed a coalition Government with PN which received 4 ministries, the Gobierno del Pueblo Party (PGP) - created by those who had broken away from the PC- whose leader, Hugo Batalla, was given the Vice-Presidency-, along with an independent cabinet minister with Unión Cívica ties.

Guaranteed the backing of two-thirds of the parliament, this reform, which eliminated the almost hundred-year old Ley de Lemas, was supported by 50.45% of the votes and came into force on 14 January 1997.

The expansionist economic policy of his Government brought about a reduction in the recession of -1.8% which had been registered the previous year, partly due to a fall in exports, and gave way to high growth rates that didn't generate inflation.

This boom panorama was drastically affected by the Brazilian crisis of 1998-1999, which reduced the products it bought from Uruguay; Brazil was the destination of more than a third of total Uruguayan exports.

Always active in journalism and in the cultural world, during his break from presidential duties between 1990 and 1995 Sanguinetti was a columnist for the EFE Press Agency and El País, both Spanish companies.