Why is Andorra not part of the European Union?

Perched on the heights of the Pyrenees, nestled between France and Spain, Andorra intrigues. This micro-state of 468 km² and 77,000 souls, with a rich history and a unique culture, has managed to preserve its independence over the centuries. But one question remains: why is Andorra not part of the European Union?

Andorra: a European microstate on the fringes of the Union

A complex geopolitical status

Andorra is not an isolated case. Other European microstates, such as Monaco, San Marino and the Vatican, are also not part of the EU. To understand the situation in Andorra, it is necessary to delve into its history and its particular geopolitical status.

A principality co-led by two heads of state

Since the thirteenth century, Andorra has been a principality co-ruled by two heads of state: the President of the French Republic and the Bishop of Urgell, Spain. This unique situation, inherited from feudal history, has allowed Andorra to maintain its neutrality and independence over the centuries.

Here are the details of this co-principality:

• The two Heads of State:
  • The President of the French Republic
  • The Bishop of Urgell, Spain
• Their role:
  • They are Andorra’s symbolic heads of state.
  • They share sovereign powers, but do not reside in Andorra.
  • They are represented by personal representatives, called viguiers.
• Origin of the co-principality:
  • Treaty of Paréage (1278) between the Count of Foix (represented by the President of the French Republic) and the Bishop of Urgell.
• Neutrality and independence:
  • The co-principality allowed Andorra to maintain its neutrality in the conflicts between France and Spain.
  • It has also helped to preserve Andorra’s independence from its powerful neighbours.

The co-principality is an important part of Andorra’s history and identity. It has allowed the country to maintain its neutrality and independence over the centuries.

A thriving economy based on tourism, trade and finance

Andorra has developed a dynamic and diversified economy, based on three main pillars:

• Tourism: Attracted by its spectacular landscapes, outdoor activities and rich cultural heritage, Andorra welcomes more than 8 million tourists every year. The tourism industry accounts for about 20% of the country’s GDP and generates many jobs.

• Trade: Andorra, strategically located between France and Spain, is a hub for international trade. The country enjoys free zone status, which allows it to import and export goods duty-free. Trade accounts for about 15% of the country’s GDP.

• Financial services: Andorra has developed a vibrant financial sector, attracting investors from all over the world. The country offers a stable and transparent tax environment, as well as a skilled workforce. The financial sector accounts for about 25% of the country’s GDP.

• Innovation and entrepreneurship: Andorra promotes innovation and entrepreneurship, especially in the areas of green technologies and the digital economy. The country has set up incentive and support programs for startups, thus contributing to the diversification of its economy.

• An attractive tax environment: Andorra has an attractive tax system, with a corporate tax rate of 10%. This rate, although lower than that of many European countries, does not amount to a “tax haven” system. In fact, Andorra is committed to complying with international standards in terms of tax transparency and the fight against tax evasion.

Andorra and the European Union: a close but complex relationship

Andorra has close ties with the European Union. In 1991, the Principality signed an association agreement with the EU, which allows it to participate in the European single market without being a member. Andorra also adopted the euro as its official currency in 2002.

The benefits of not joining

Non-EU membership has certain advantages for Andorra. The Principality retains its sovereignty and freedom of decision in key areas such as fiscal policy, foreign policy and defence.

The challenges of non-membership

However, non-EU membership is not without its challenges. Andorra cannot fully participate in the EU’s decision-making processes and is therefore subject to the decisions taken by its members. In addition, the Principality does not benefit from the aid and subsidies granted to EU member countries.

Andorra: towards a future accession to the European Union?

The question of Andorra’s accession to the European Union is regularly debated. In 2013, the Andorran government expressed interest in future membership. However, many questions and obstacles remain to be overcome.

Barriers to membership

The adaptation of Andorran legislation to EU standards, the issue of co-principality and the loss of sovereignty in certain areas are all obstacles that could hinder Andorra’s accession to the EU.

Andorran public opinion divided

Andorran public opinion is also divided on the issue of EU membership. There are fears that EU integration will threaten Andorra’s unique identity and way of life. Others see it as an opportunity for Andorra to strengthen its economy and participate fully in the construction of Europe.

In conclusion, Andorra’s situation vis-à-vis the European Union is complex and multidimensional. Many historical, geopolitical and economic factors come into play. The question of Andorra’s accession to the EU remains open and will depend on the progress of the negotiations and the will of the Andorran people.