This paper emphasizes the role of national historical configurations and institutional and political struts(e.g. of social protection systems)on the response to new challenges and pressures affecting welfare states and labour markets, in particular, the ones related to the increase in unemployment and changing forms of employment. the article focuses on the specificities of the southern model of welfare state and the ongoing processes of change. We analysis of the structural weaknesses and recent trends of the Portuguese social protection and labour market systems considering that they are constrained by new risks and demands originated, at the same time, by domestic and external ongoing processes. our hypotheses is that Portugal is being particularly affected effects of neo-liberal convergence and is failing to respond to internal and external challenges adequately (e.g. without aggravating citizens living standards and risks of poverty and social exclusion) due, namely, to unresolved structural problems and to theweaknesses og its institutions.