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Microstates and the European Union

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Title: Microstates and the European Union  
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Subject: Customs and monetary union, San Marino–European Union relations, Monaco–European Union relations, Enlargement of the eurozone, International status and usage of the euro
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Microstates and the European Union

There are a number of [4] According to the qualitative definition of microstates suggested by Dumienski (2014), microstates can also be viewed as "modern protected states, i.e. sovereign states that have been able to unilaterally depute certain attributes of sovereignty to larger powers in exchange for benign protection of their political and economic viability against their geographic or demographic constraints."[5] And indeed, all of the European microstates are sovereign states that function in a close (and voluntary) association with their respective larger neighbour. Currently, all of the European microstates have special relations with the European Union.[6]

Andorra, Liechtenstein, Monaco, San Marino, and the Vatican City remain outside the Union, some because of the cost of membership as the EU has not been designed with microstates in mind. Andorra is, by population, the largest of the 5 microstates with 78,115 according to a census taken in 2011. Two other small countries, Luxembourg and Malta, are full members of the European Union and both inhabited by populations over 400,000. Iceland is considered a microstate by some, because of its small population of 320,060 per April 2012.[7] It is a member of the European Economic Area (EEA), and is recognized as an official candidate for accession to the Union, though the negotiations have been suspended. If Iceland accedes to become an EU member state, it would enter as the smallest EU state measured by population, although twelfth largest by geographical size.

Status of relations

San Marino, Monaco, and the Vatican City use the euro through an agreement with the EU and have been granted the right to issue a limited number of euro coins. They were allowed to do so as they had used or been tied to the old eurozone currencies. Andorra also has an agreement with the EU to use the euro, and will be permitted to issue euro coins once it meets certain conditions of its monetary agreement. They are expected to issue their first coins by the end of 2014.[8][9] Liechtenstein, on the other hand, uses the Swiss franc.

Liechtenstein is a full member of the Schengen Agreement and Monaco has an open border with France and Schengen laws are administered as if it were a part of France. San Marino and the Vatican City have an open border with their neighbouring Schengen Area state Italy.

Monaco is a part of the EU Customs territory through an agreement with France, and is administered as part of France. San Marino and Andorra are in a customs union with the bloc. Liechtenstein is a member of the EEA so is within the Organisation for Security and Co-operation in Europe (the Vatican is member only of the OSCE).

Andorra, Monaco, and San Marino have all stated their desire to deepen relations with the EU. San Marino has considered joining the EEA in the past,[10][11] and there is an active discussion within the country on submitting an application for EU membership.[12]

In November 2012, after the Council of the European Union had called for an evaluation of the EU's relations with these microstates, which they described as "fragmented",[13] the European Commission published a report outlining options for their further integration into the EU.[12] Unlike Liechtenstein, which is a member of the EEA via the European Free Trade Association (EFTA) and the Schengen Agreement, relations with these three states are based on a collection of agreements covering specific issues. The report examined four alternatives to the current situation: 1) a Sectoral Approach with separate agreements with each state covering an entire policy area, 2) a comprehensive, multilateral Framework Association Agreement (FAA) with the three states, 3) EEA membership, and 4) EU membership. The Commission argued that the sectoral approach did not address the major issues and was still needlessly complicated, while EU membership was dismissed in the near future because "the EU institutions are currently not adapted to the accession of such small-sized countries." The remaining options, EEA membership and a FAA with the states, were found to be viable and were recommended by the Commission. In response, the Council requested that negotiations with the three microstates on further integration continue, and that a report be prepared by the end of 2013 detailing the implications of the two viable alternatives and recommendations on how to proceed.[14]

As EEA membership is currently only open to EFTA or EU members, the consent of existing EFTA member states is required for the microstates to join the EEA without becoming members of the EU. In 2011, [18]

On 18 November 2013 the EU Commission published their report which concluded that "the participation of the small-sized countries in the EEA is not judged to be a viable option at present due to the political and institutional reasons", but that Association Agreements were a more feasible mechanism to integrate the microstates into the internal market, preferably via a single multilateral agreement with all three states.[20]


This table summarises the various components of EU laws applied in the microstates. Some territories of EU member states also have a special status in regard to EU laws applied as is the case with some European Free Trade Association members and their sovereign territories.

Microstates Association Agreement Schengen Area EU VAT area[21] EU customs territory EU single market Eurozone[22]
 Andorra (details) No No[Note 1] No Customs union[Note 2] No Issuing rights[Note 3]
 Liechtenstein (details) Yes[Note 4] Yes No No[Note 5] Yes[Note 6] No[Note 7]
 Monaco (details) No de facto[Note 8] Yes[Note 9][Note 10] Yes[Note 11] Partial[Note 12] Yes[Note 13]
 San Marino (details) No Open border[Note 14] No[Note 9][Note 15] Customs union [Note 2] No Yes[Note 13]
  Vatican City (details) No Open border[Note 16] No No No Yes[Note 13]


  1. ^ No visa is required, but entry is only possible via the Schengen area.[23]
  2. ^ a b In a customs union with the EU.[24][25][26]
  3. ^ Monetary agreement with the EU to issue euros.[27] Expected to issue their first coins by the end of 2014.[8][9]
  4. ^ Agreement on the European Economic Area.
  5. ^ Customs union with Switzerland.[28]
  6. ^ Member state of the European Economic Area.
  7. ^ Uses the Swiss franc.
  8. ^ Although not formally part of the Schengen area, has an open border with France and Schengen laws are administered as if it were a part of France.[24][29]
  9. ^ a b Part of the EU excise territory.[34]
  10. ^ Through an agreement with France. Administered as a part of France for taxation purposes.[21][24][30]
  11. ^ Through an agreement with France. Part of the EU Customs territory, administered as part of France.[24][31][32]
  12. ^ Through an agreement with France.[33]
  13. ^ a b c Monetary agreement with the EU to issue euros.
  14. ^ Although not formally part of the Schengen area, has an open border with Italy.[24]
  15. ^ Through an agreement with Italy. Administered as a part of Italy for taxation purposes.[21][30]
  16. ^ Although not formally part of the Schengen area, has an open border with Italy and has shown an interest in joining the agreement formally for closer cooperation in information sharing and other activities covered by the Schengen Information System.[35]


  1. ^ Catudal, H., 1975. The plight of the Lilliputians: An analysis of five European microstates. Geoforum, 6, pp.187–204
  2. ^ Duursma, J.C., 1996. Fragmentation and the International Relations of Micro-states: Self-determination and Statehood, Cambridge University Press.
  3. ^ Eccardt, T.M., 2005. Secrets of the Seven Smallest States of Europe: Andorra, Liechtenstein, Luxemborg, Malta, Monaco, San Marino, and Vatican City, Hippocrene Books.
  4. ^ Mendelson, M., 1972. Diminutive States in the United Nations. The International and Comparative Law Quarterly, 21(4), pp.609–630.
  5. ^ Dumienski, Zbigniew (2014). "Microstates as Modern Protected States: Towards a New Definition of Micro-Statehood". Occasional Paper. Centre for Small State Studies. Retrieved 06.07.14. 
  6. ^ "EU relations with the Principality of Andorra, the Republic of San Marino and the Principality of Monaco".  
  7. ^ Herbertsson, Tryggvi Thor; Zoega, Gylfi (December 2002). "A Microstate with Scale Economies: The Case of Iceland". Institute of Economic Studies Working Paper ( 
  8. ^ a b "Govern torna a rellançar el projecte de regulació del registre de patents".  
  9. ^ a b "Una part dels euros del país es distribuirà via Espanya i França".  
  10. ^ "The Secretary of State for Foreign Affairs has met the European Commissioner for External Relations and European Neighbourhood Policy". 2009-07-17. Retrieved 2013-04-01. 
  11. ^ "San Martino to participate to the EEA". 2009-07-21. Retrieved 2013-04-01. 
  12. ^ a b "Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee of the Regions - EU Relations with the Principality of Andorra, the Principality of Monaco and the Republic of San Marino - Options for Closer Integration with the EU". 2012. 
  13. ^ "Council conclusions on EU relations with EFTA countries".  
  14. ^ "Council conclusions on EU relations with the Principality of Andorra, the Republic of San Marino and the Principality of Monaco".  
  15. ^ "Norge sier nei til nye mikrostater i EØS". 2011-05-19. Retrieved 2013-04-06. 
  16. ^ "Innlegg på møte i Stortingets europautvalg".  
  17. ^ "Eide: Bedre blir det ikke". 2012-12-21. Retrieved 2013-04-01. 
  18. ^ a b Aalberg Undheim, Eva (2012-12-08). "Regjeringa open for diskutere EØS-medlemskap for mikrostatar" (in Norwegian). Retrieved 2013-04-06. 
  19. ^ "La Norvegia chiude le porte a San Marino". La Tribuna Sammarinese. 2013-01-03. p. 7. Retrieved 2013-04-06. 
  20. ^ "EU Relations with the Principality of Andorra, the Principality of Monaco and the Republic of San Marino: Options for their participation in the Internal Market".  
  21. ^ a b c "Taxation and Customs Union - Within the EU".  
  22. ^ "The euro outside the euro area".  
  23. ^ "Travel to Andorra". Government of Andorra. Retrieved 3 October 2014. 
  24. ^ a b c d e "Obstacles to access by Andorra, Monaco and San Marino to the EU's Internal Market and Cooperation in other Areas". 2012. Retrieved 2013-03-30. 
  25. ^ "Andorra : Customs Unions and preferential arrangements".  
  26. ^ "San Marino : Customs Unions and preferential arrangements".  
  27. ^ "Monetary Agreement between the European Union and the Principality of Andorra".  
  28. ^ "Switzerland and Liechtenstein: December 2000".  
  29. ^ "The Schengen acquis - Decision of the Executive Committee of 23 June 1998 on Monegasque residence permits".  
  30. ^ a b "COUNCIL DIRECTIVE 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC".  
  31. ^ "Taxation and Customs - FAQ".  
  32. ^ "Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code".  
  33. ^ EU relations with the Principality of Andorra, the Republic of San Marino and the Principality of Monaco: "If France adopts internal legislation transposing EU directives in certain areas covered by bilateral Agreements with Monaco, the Principality directly applies the French legislation in certain areas"
  34. ^ "Annex 1: Overview of European Union countries".  
  35. ^ Küchler, Teresa (2006-01-13). "Vatican seeks to join Schengen borderless zone".  

See also

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