ROMSO Cyprus Knowledge Base

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In Europe there is a number of microstates, which, because of their size, are often closely linked to another wider state: they have special relations with the European Union.

These states remain outside the Union: this is mainly due to the cost of being a member, not being the EU was designed for microstates. Luxembourg, Malta and Cyprus are members of the Union.

Andorra

Andorra has a customs union with the European Union since 1991, although it is not in the EU's customs territories for agricultural products. It maintains its border controls (but only with Spain) since it is outside Schengen agreements, although citizens who have a Schengen visa can usually enter. Customs controls are almost nonexistent; the only active customs is the one between the municipality of La Farga de Moles, in Spain, and Sant Julià de Lòria, in Andorra.

Andorra was the only microstate to use the euro without an official agreement, as it no longer had the currency that was used before the euro: in fact, Andorra circulated both the French franc and the Spanish peseta. After seven years of negotiations with the Union for an agreement that allows it to mint its own coins, Andorra has arrived to mint its coins from 1 January 2014.

In November 2009, the government stated that there was no need to enter the EU, but the Social-Democratic Party, which was in opposition, was said to be in favour of the entry of Andorra into the union.

Liechtenstein

Liechtenstein is the only microstate that is part of the European Economic Area (from 1 May 1995) and is, therefore, also part of the Common European Market with partial application of Union law. It is also part of the Schengen agreements since 19 December 2011.

The euro is not circulated in the Principality, but the Swiss franc.

Liechtenstein on 13 July 2009 resumed diplomatic relations with the Czech Republic, a member of the EU, with whom he had interrupted his relations since the 1938 Munich Conference.

Munich

The Principality of Monaco applies certain policies of the European Union through its special relationship with France, a Member State. Monaco is part of the EU's customs territory and the VAT area and applies many EU measures relating to VAT and excise duty. Munich is a member of the Schengen Area (its borders and customs territory are treated as part of France) and is a member of the euro zone (with its own currencies, having previously had its own currency tied with the ratio of 1 to 1 with the French franc). It has implemented the EU directive on interest taxation on savings.

San Marino

San Marino has an open border (although it is not formally part of Schengen) and a customs union (since 2002, including agriculture) with the European Union; it also uses the euro and can connect