A recession in economics is defined by a period of at least 2 quarters of negative GDP growth. There was a global recession between 2008-2009, which most countries are now out of - but there are a number still in recession, including Portugal.
A recession is caused by a fall in GDP, from a reduction in AS, AD or both. The causes of a reduction in AD are a reduction in any of the components of C+I+G+(X-M). A fall in AS comes from increases in the costs of production such as a rise in unit labour costs, or a fall in the quality of education/training, as well as a number of other factors.
Recessions tend to lead to reductions in confidence which can further reduce consumption or investment spending. In a recession, however, governments tend to borrow more money which leads to increased public spending in an attempt to offset the reduction in consumption or investment. Spain said during its recession that they feared the social consequences of high unemployment (one of the things caused by a recession) and therefore increased benefits, which put an extra strain on government spending. Sometimes recession is caused by a reduction in exports which may be due to a world recession or a drop in world confidence.This should lead to a reduction in exchange rates which would reduce the price of exports and hopefully lead to a boost in AD.
Prolonged recession may be due to a serious lack of international competitiveness such as was experienced in Portugal recently. This is most likely due to high unit labour costs resulting from either an unproductive workforce or an underdeveloped industrial sector. In Portugal, the rate of young people leaving school was around 60% which probably led to a reduction in productivity of the labour force, and therefore a reduction in international competitiveness.