Sounds quite similar to Italy. About politics: you can loathe it all you want, but unfortunately, you'll need to get your hands dirty if you want to fix things - and even then, even if the laws and economics are better, it'll still take time. Just leave the actual discussion of politics to some other site:-)
They finally passed a very weak-sauce, complicated version of a law that some of us are pushing for here in Italy: reducing the costs of creating a limited liability company ( http://www.srlfacile.org ), but it does show that if you work at it, you can accomplish things.
The situation is really preoccupying, because if the best tech talent emigrates the economic potential of a country is immediately reduced, and this is not going to help economies that are already stagnating.
I'm wondering myself if it would be possible to start consulting part-time from Italy to finance my startup attempt. I wouldn't like to be forced to leave, but that is becoming more and more likely at the moment.
The best thing is to make sure there is a reason, and support for returning: people going abroad and bringing back knowledge and money can actually be quite beneficial. In India and China, tons of businesses are started by people returning home after some amount of time in the US, for instance.
In terms of being pleasant places to live, Italy and Portugal are lucky, but they need to fix some other things...
This is a good book detailing some of what needs fixing, although it's mostly "old hat" for anyone who lives in Italy: http://www.amazon.com/dp/B008F86HBK/?tag=dedasys-20 so it may not be worth reading if you're Italian.
They finally passed a very weak-sauce, complicated version of a law that some of us are pushing for here in Italy: reducing the costs of creating a limited liability company ( http://www.srlfacile.org ), but it does show that if you work at it, you can accomplish things.