Andorra, one of Europe’s smallest and oldest countries, does not boast full European Union membership. Instead, sandwiched between Spain and France’s 11,000 foot high Pyrenees borders, Andorra relies on integrating relations with the two countries. Yet, as Andorra’s economy and demographics differ greatly from most of the European Union, Andorra has a unique agreement with the body of countries. Unfortunately, lacking full E.U. membership and the benefits this includes, Andorra has faced struggles with their COVID-19 response.

A Unique Agreement With the European Union

As evidenced by the recent Brexit controversy, E.U. membership comes with positive and negative aspects. Entry challenges proved a significant hurdle for Andorra; therefore, it initially did not join the union. Only after the 2008 recession did Andorra arrange a special agreement with the European Union, like other European micro-states.

Due to tourism, the country’s main economic draw, and Andorra’s location on a map, some economic realities have been unavoidable. After 2008, Andorra began using the Euro and entered trade agreements slashing tariffs. However, unlike the rest of Europe, Andorra continued to restrict individual taxes. This branded the small country as a hot spot for tax evasion. This caveat kept Andorra afloat but alienated the country from the rest of Europe. Due to international pressure in 2011, the country began moving towards international tax standards.

Even though it lacks full European Union membership, Andorra still retains membership in the United Nations, the Council of Europe and the Organization for Security and Cooperation in Europe.

Does Andorra qualify for European Union aid?

Full European Union member countries qualify for aid programs. The European Union, like most international institutions, provided large amounts of COVID-19 aid–37 billion Euros in the initial program to be exact. Individual countries qualify for an additional 100 billion from the E.U. for employment assistance.

However, Andorra’s partial membership benefits to the European Union are limited to:

1. The customs union, which is a group of countries that have agreed to charge the same import duties as each other and allow free trade between themselves.
2. Tariff exemption to void taxes imposed by a government on goods and services imported from countries outside of the European Union.
3. Euro use for stable and standardized currency.
4. Access to name and tax databases.

COVID-19 in Andorra

As Andorra’s place in the European Union is unclear, so is its ability to receive COVID-19 aid. It appears that Andorra cannot and has not accessed any European Union COVID-19 aid. As neighboring Spain and France have done, Andorra implemented specific travel limitations. Uniquely, its rules included odd and even-numbered homes taking turns with short exercise periods.

Poverty in Andorra

The tough situation created by COVID-19 shutdowns and the ambiguous nature of Andorra’s relationship with the European Union have left the country exposed to further poverty. Unlike countries with widespread extreme poverty, Andorra’s poverty is specific to immigrant labor unemployment during tourism lulls and the housing crisis. Both of which, when paired with COVID-19, have the potential to drastically increase Andorra’s 4% poverty rate.

As of now, Andorra continues to encounter additional struggles with their COVID-19 response. As the post-2008 trend of strengthening relationships between Andorra and the E.U. continues, more poverty prevention aid will hopefully find its way to this small, land-locked country.

– Rory Davis
Photo: Flickr