Andorran euro coins
Encyclopedia
Andorran–European relations are based on a customs union
between the Andorra
and the European Union
(EU).
and the Principality of Andorra" (signed 28 June 1990, entered into force 1 July 1991) establishes a customs union with most favoured nation
status between the EU. Andorra is treated as an EU state where trade in manufactured goods is concerned, but not for agricultural produce.
as its sole currency, but does not yet have the right to issue its own coins like other European microstates
using the euro.
and Spain
, which surround it, it is not a member of the European Union
(EU). However it de facto uses the EU's euro
(the currency of the Eurozone
states) as it historically used the French franc
and Spanish peseta
. Those two currencies were replaced by the euro in 2002, hence the euro replaced the franc and peseta as the sole circulating currency in Andorra.
Three other European microstates
outside of the EU, Monaco
, San Marino
and the Vatican City
, also faced this situation but they, unlike Andorra, concluded agreements with the EU for the right to mint their own euro coins. Euro coins
have a common design on one side, and a national-specific side on the other. Hence those three microstates could design their own national side, mint and distribute their own coins. As with coins minted in other eurozone states, the microstate coins are valid across the eurozone; however they do not gain representation on the euro's governing bodies, the European Central Bank
(ECB) and the Eurogroup.
adopted its negotiating position with Andorra. Following Andorra's agreement to abide by Council Directive 2003/48/EC on taxation of savings income in the form of interest payments, the Commission recommended opening negotiations. Negotiations have progressed since although were expected to be concluded by 2008, then 2012 but have been stalled repeatedly. This has in part been due to poor relations stemming from Andorra's tax haven
status. A monetary agreement was eventually agreed on by Andorra and the EU in February 2011, and the agreement was signed on 30 June 2011. After ratification, the agreement will make the euro Andorra's official currency and allow Andorra to mint up to 2.4 million coins from 2013 onwards, if it complies with the agreement's terms.
and maintains border controls with the EU. However as travellers to Andorra have to pass through the Schengen Area
, and Andorra accepts Schengen visas, Andorra is in practice a virtual part of the area.
(only goods is achieved) together with fiscal and financial sector reforms to EU standards (removing its tax haven reputation). The government has said that "for the time being" there is no need to join the EU; however, the governing Social Democratic Party
is in favour.
Customs union
A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries set up common external trade policy, but in some cases they use different import quotas...
between the Andorra
Andorra
Andorra , officially the Principality of Andorra , also called the Principality of the Valleys of Andorra, , is a small landlocked country in southwestern Europe, located in the eastern Pyrenees mountains and bordered by Spain and France. It is the sixth smallest nation in Europe having an area of...
and the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
(EU).
Customs Union
The "Agreement between the European Economic CommunityEuropean Economic Community
The European Economic Community The European Economic Community (EEC) The European Economic Community (EEC) (also known as the Common Market in the English-speaking world, renamed the European Community (EC) in 1993The information in this article primarily covers the EEC's time as an independent...
and the Principality of Andorra" (signed 28 June 1990, entered into force 1 July 1991) establishes a customs union with most favoured nation
Most favoured nation
In international economic relations and international politics, most favoured nation is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must, nominally, receive equal trade advantages as the...
status between the EU. Andorra is treated as an EU state where trade in manufactured goods is concerned, but not for agricultural produce.
Euro
Andorra uses the euroEuro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
as its sole currency, but does not yet have the right to issue its own coins like other European microstates
European microstates
The European microstates or ministates are a set of very small states in Europe. While Andorra, Liechtenstein, Malta, Monaco, San Marino, and Vatican City are usually included, Luxembourg and Cyprus share certain features as well...
using the euro.
Background
Andorra does not have an official currency and unlike its two larger neighbours, FranceFrance
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, which surround it, it is not a member of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
(EU). However it de facto uses the EU's euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
(the currency of the Eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...
states) as it historically used the French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...
and Spanish peseta
Spanish peseta
The peseta was the currency of Spain between 1869 and 2002. Along with the French franc, it was also a de facto currency used in Andorra .- Etymology :...
. Those two currencies were replaced by the euro in 2002, hence the euro replaced the franc and peseta as the sole circulating currency in Andorra.
Three other European microstates
European microstates
The European microstates or ministates are a set of very small states in Europe. While Andorra, Liechtenstein, Malta, Monaco, San Marino, and Vatican City are usually included, Luxembourg and Cyprus share certain features as well...
outside of the EU, Monaco
Monaco
Monaco , officially the Principality of Monaco , is a sovereign city state on the French Riviera. It is bordered on three sides by its neighbour, France, and its centre is about from Italy. Its area is with a population of 35,986 as of 2011 and is the most densely populated country in the...
, San Marino
San Marino
San Marino, officially the Republic of San Marino , is a state situated on the Italian Peninsula on the eastern side of the Apennine Mountains. It is an enclave surrounded by Italy. Its size is just over with an estimated population of over 30,000. Its capital is the City of San Marino...
and the Vatican City
Vatican City
Vatican City , or Vatican City State, in Italian officially Stato della Città del Vaticano , which translates literally as State of the City of the Vatican, is a landlocked sovereign city-state whose territory consists of a walled enclave within the city of Rome, Italy. It has an area of...
, also faced this situation but they, unlike Andorra, concluded agreements with the EU for the right to mint their own euro coins. Euro coins
Euro coins
There are eight euro coin denominations, ranging from one cent to two euros . The coins first came into use in 2002. They have a common reverse, portraying a map of Europe, but each country in the eurozone has its own design on the obverse, which means that each coin has a variety of different...
have a common design on one side, and a national-specific side on the other. Hence those three microstates could design their own national side, mint and distribute their own coins. As with coins minted in other eurozone states, the microstate coins are valid across the eurozone; however they do not gain representation on the euro's governing bodies, the European Central Bank
European Central Bank
The European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...
(ECB) and the Eurogroup.
Currency agreements
In 2003, Andorra requested the right to mint its own coins. In 2004 the Council of the European UnionCouncil of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...
adopted its negotiating position with Andorra. Following Andorra's agreement to abide by Council Directive 2003/48/EC on taxation of savings income in the form of interest payments, the Commission recommended opening negotiations. Negotiations have progressed since although were expected to be concluded by 2008, then 2012 but have been stalled repeatedly. This has in part been due to poor relations stemming from Andorra's tax haven
Tax haven
A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....
status. A monetary agreement was eventually agreed on by Andorra and the EU in February 2011, and the agreement was signed on 30 June 2011. After ratification, the agreement will make the euro Andorra's official currency and allow Andorra to mint up to 2.4 million coins from 2013 onwards, if it complies with the agreement's terms.
Other agreements
Two more other agreements were signed in 2003/4. There is a cooperation agreement covering the environment, communications, information, culture, transport, regional and cross-border co-operation and social issues. However this has seen few operational results so far. There is also a taxation of savings agreements which was signed following pressure from EU on offshore financial centres to conform to EU standards.Schengen
Andorra has stayed outside the Schengen AgreementSchengen Agreement
The Schengen Agreement is a treaty signed on 14 June 1985 near the town of Schengen in Luxembourg, between five of the ten member states of the European Economic Community. It was supplemented by the Convention implementing the Schengen Agreement 5 years later...
and maintains border controls with the EU. However as travellers to Andorra have to pass through the Schengen Area
Schengen Area
The Schengen Area comprises the territories of twenty-five European countries that have implemented the Schengen Agreement signed in the town of Schengen, Luxembourg, in 1985...
, and Andorra accepts Schengen visas, Andorra is in practice a virtual part of the area.
Membership
Deepening Andorra's relationship with the EU generally requires compliance with the EU's four freedomsFour Freedoms (European Union)
The European Union's Internal Market seeks to guarantee the free movement of goods, capital, services, and people – the EU's four freedoms – within the EU's 27 member states.The Internal Market is intended to be conducive to increased competition, increased specialisation, larger...
(only goods is achieved) together with fiscal and financial sector reforms to EU standards (removing its tax haven reputation). The government has said that "for the time being" there is no need to join the EU; however, the governing Social Democratic Party
Social Democratic Party (Andorra)
The Social Democratic Party is a social democratic political party in Andorra.In the April 24 2005 legislative elections, the party came second in the elections, with 38.1 % of the popular vote and 11 out of 28 seats. It remained in opposition to the government of the Liberal Party of Andorra...
is in favour.
External links
- Andorran mission to the European Union
- EU relations with the Principality of Andorra, European External Action Service
- Andorra : Customs Unions and preferential arrangements, European CommissionEuropean CommissionThe European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
DG Taxation & Customs UnionDirectorate-General for Taxation and Customs Union (European Commission)The Directorate-General for Taxation and Customs Union is a Directorate-General of the European Commission. The DG Taxation and Customs manages, defends and develops the customs union as a vital part of protecting the external borders of the European Union... - EU-Andorra Customs Agreement, European Commission Treaties Database
- EU-Andorra Cooperation Agreement (PDF), Official Journal of the European UnionOfficial Journal of the European UnionThe Official Journal of the European Union is the official gazette of record for the European Union . It is published every working day in all of the official languages of the member states. Only legal acts published in the Official Journal are binding.It was first published on 30 December 1952 as...
- EU-Andorra Taxation Agreement (PDF), Official Journal of the European UnionOfficial Journal of the European UnionThe Official Journal of the European Union is the official gazette of record for the European Union . It is published every working day in all of the official languages of the member states. Only legal acts published in the Official Journal are binding.It was first published on 30 December 1952 as...
- Operational Programme "France-Spain-Andorra" 2007-2013, European Commission
- Agreements on monetary relations (Monaco, San Marino, the Vatican and Andorra), European Commission
- Emerson, Michael (2007) Andorra and the European Union, (PDF) Centre for European Policy StudiesCentre for European Policy StudiesThe Centre for European Policy Studies is a think tank based in Brussels, Belgium that undertakes research "leading to solutions to the challenges facing Europe today"...
(CEPS)