The fires in Portugal, the worst in a generation, have flared amid a heatwave stretching from Russia to the Iberian Peninsula and Britain's Atlantic coast.
The heat has killed at least 12 people in Spain and Germany and threatens to break national temperature records in France and Britain.
Portuguese Prime Minister Jose Manuel Durao Barroso said the declaration of a national disaster, approved by the cabinet on Monday, would make more than 100 million euros ($113 million) available in disaster aid.
"The situation the country is facing is exceptional, caused by absolutely exceptional climatic conditions," he said. "That is why we have to act with exceptional measures."
Durao Barroso said Portugal would also seek disaster relief funding from the European Union.
Tragedies in Spain and Germany
Fires in Spain's Extremadura region, which borders Portugal, and the province of Avila forced hundreds of people to evacuate their homes.
In Spain's southern region of Andalucia, seven people have died from the heatwave since Thursday, a spokeswoman for the regional health service said. Most were elderly.
Temperatures in the high 30s Celsius (upper 90s Fahrenheit) caused five deaths in the northern German town of Holzminden over the weekend.
Construction work on a football stadium in Munich was halted on Monday because engineers feared temperatures reaching 36C could cause cracks in the structure.
In the eastern state of Brandenburg, about 30 hectares of forest were ablaze 60km south of Berlin, forcing closure of a national road.
France and UK face record temperatures
In France, a spokeswoman for the state weather office said temperatures this week were expected to near the national record of 44C (111.2 F) set in 1923. In Britain, temperatures threatened to top the 37.1C (98.8 F) all-time high.
French firemen have battled
many blazes over the past week
Authorities in southern France have limited water use and there were fears of rising air pollution levels.
Britain's rail network slapped speed restrictions on a wide range of lines owing to risk of rails buckling and warned of extended journey times. Speed limits were cut to 100 km per hour from the more usual 145-190km per hour and could go even lower.
Many parts of Switzerland have banned open fires for fear of forest fires.
Some 431 fires were raging in Russia. But heavy rain has tamed blazes that devastated swathes of Siberia and the Russian Far East.
Firefighters in Croatia battled fires on the Adriatic islands of Brac, Hvar and Bisevo, where temperatures reached 37C.