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There are a number of microstates in Europe; due to their size, they are often closely linked with another larger state. Currently, the European microstates have special relations with the European Union.

They remain outside the Union, some due to the cost of membership, the EU not being designed with microstates in mind. Two other smaller countries in Europe, Luxembourg and Malta, are full members of the Union. Iceland is considered a microstate by some due to its small population; it is a member of the European Economic Area, and has applied for membership in the EU (See: Accession of Iceland to the European Union).



Andorra has had a customs union with the Union since 1991 though is not in the EU's customs territory for agricultural produce. Andorra also maintains its border controls by staying outside of Schengen, though citizens holding a Schengen visa can usually enter.

Andorra is the only microstate to use the euro without an official agreement, having not had its own currency before the euro, when it used both the French franc and Spanish peseta. Though Andorra is in talks with the Union over an agreement that would allow it to mint its own coins, these have been stalled recently due to problems over banking rules that Andorra must adopt.

The government has said that "for the time being" there is no need to join the EU;[1] however, the opposition Social Democratic Party is in favour.[citation needed]


Liechtenstein is the only microstate (not counting Iceland by population and EU members) that is a part of the European Economic Area (since 1 May 1995), thereby being part of the Union's single market with partial application of European law. It is also a signatory of Schengen, since Switzerland signed up and the two countries have an open border with each other.

However it does not use the euro, instead using the Swiss franc. It might consider joining the EU if Switzerland joins.[citation needed]


Monaco currently applies certain policies of the European Union through its special relationship with France, a member state.[2] Monaco is a full part of the EU's customs territory and VAT area, applying most EU measures relating to VAT and Excise duties. Monaco is a de facto member of the Schengen area (its borders and customs territory are treated as part of France) and the euro currency zone (minting its own coins, having previously had its currency tied 1:1 with the French franc). It has implemented the EU Directive on the taxation of savings interest.[3]

San Marino

San Marino has an open border (though not Schengen) and customs union (since 2002, including agriculture) with the Union; it also uses the euro and is allowed to mint its own coins. The left-wing opposition Popular Alliance has been reported to be in favour of joining the EU, which the ruling San Marinese Christian Democratic Party opposes.[4]

Vatican City

The Vatican City is the smallest state in the world. As a theocracy, it may not join the Union, even though it is in the heart of Rome, capital of Union member-state Italy. It does, however, have an open border with Italy, along with a desire to join the Schengen Information System.

It uses and mints the euro officially. As the smallest country minting them, the coins have become extremely rare and the hardest and most expensive to collect of any of the microstate coins.


San Marino, Monaco, and the Vatican City use the euro and have been granted the right to mint a limited number of euro coins. They were allowed to do so, having used or been tied to the old eurozone currencies, and all have open borders. Andorra also uses the euro and is currently in negotiations with the EU to be granted the right to mint its own coins. This is scheduled to happen in 2009.

All but Andorra are part of the Schengen Agreement or have an open border with the Union. San Marino and Andorra are in a customs union with the bloc. All of the microstates are also part of other organisations such as the Council of Europe and the Organisation for Security and Co-operation in Europe (the Vatican is member only of the OSCE).

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 Application of EU law Enforceable in local courts Schengen Area EU VAT area EU customs territory EU single market Eurozone
 Andorra Minimal Unclear No No Partial[5] No Unilaterally adopted
 Liechtenstein Partial Unclear Set to implement later No No Yes[6] No, CHF
 Monaco With exemptions Unclear Yes[7] Yes[7][8] Yes[7][9] Partial[citation needed] Yes[7]
 San Marino Minimal Unclear Open border[10] Partial[11][12] Yes[citation needed] No Yes[11]
 Vatican City No No Open border[13] No No No Yes[11]

See also


  1. ^ Finding Andorra's place in the world
  2. ^ The EU's relations with Monaco, European Commission, December 2005
  3. ^ AGREEMENT between the European Community and the Principality of Monaco providing for measures equivalent to those laid down in Council Directive 2003/48/EC "". January 2005
  4. ^ 'Oldest republic' torn by poll-rig claims, The Australian, 2006-06-06
  5. ^ Customs union with some goods excluded.
  6. ^ European Economic Area
  7. ^ a b c d Through agreement with France
  8. ^ Commission proposal for Council directive on the common system of value added tax
  9. ^ Article 3(1) of Council Regulation 2913/92/EEC of 12 October 1992 establishing the Community Customs Code (as amended) (OJ L 302, 19.10.1992, p. 1-50) [1].
  10. ^ Although not formally part of the Schengen area, has an open border with Italy (although some random checks are made by Carabinieri, Polizia di San Marino and Guardia di Finanza).
  11. ^ a b c Through agreement with Italy
  12. ^ part of the excise territory only and not of the VAT territory
  13. ^ Has an open border with Italy and has shown an interest in joining the agreement formally for closer cooperation in information sharing and similar activities covered by the Schengen Information System


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