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Relations between the Principality of Monaco and the European Union (EU) are primarily conducted through
France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...
. Through that relationship
Monaco Monaco, officially the Principality of Monaco, is a Sovereign state, sovereign city-state and European microstates, microstate on the French Riviera a few kilometres west of the Regions of Italy, Italian region of Liguria, in Western Europe, ...
directly participates in certain EU policies. Monaco is an integral part of the EU customs territory and VAT area, and therefore applies most measures on
excise duties file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
and VAT.The EU's relations with Monaco
''
European External Action Service The European External Action Service (EEAS) is the diplomatic service in charge of executing all Foreign relations of the European Union, international relations of the European Union. The EEAS is led by the Vice-President of the European Co ...
'', September 2011
Monaco borders one EU member state:
France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...
. However this relationship does not extend to external trade. Preferential trade agreements between the EU and third countries apply only to goods originating from the customs territory – Monaco may not claim EU origin in this respect. Monaco is a ''de facto'' member of the
Schengen area The Schengen Area ( , ) encompasses European countries that have officially abolished border controls at their common borders. As an element within the wider area of freedom, security and justice (AFSJ) policy of the European Union (EU), it ...
(its borders and customs territory are treated as part of France) and it officially uses the
euro The euro (currency symbol, symbol: euro sign, €; ISO 4217, currency code: EUR) is the official currency of 20 of the Member state of the European Union, member states of the European Union. This group of states is officially known as the ...
as its sole currency. It uses the euro via an agreement with the EU and France and is allowed by the EU to mint its own coins. Monaco uses the euro as it previously had its currency tied 1:1 with the
French franc The franc (; , ; currency sign, sign: F or Fr), also commonly distinguished as the (FF), was a currency of France. 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 amoun ...
. Monaco and the European Union have also concluded agreements on the application of Community legislation to pharmaceuticals, cosmetic products and medical devices (this entered into force on 1 May 2004); and on savings taxation (in force since 1 July 2005).


Future integration

EU membership for Monaco is unlikely as, aside from its size, unlike the constitutional monarchies within the EU, the
Prince of Monaco The sovereign prince () is the monarch and head of state of the Principality of Monaco. All reigning princes and princesses have taken the name of the House of Grimaldi. When Prince Rainier III died in 2005, he was Europe's longest reigning mo ...
has considerable executive powers and is not merely a figurehead. Monaco joined the
Council of Europe The Council of Europe (CoE; , CdE) is an international organisation with the goal of upholding human rights, democracy and the Law in Europe, rule of law in Europe. Founded in 1949, it is Europe's oldest intergovernmental organisation, represe ...
in 2004, a move that required it to renegotiate its relations with France, which previously had the right to nominate various ministers. This was seen as part of a general move toward European integration. In November 2012, after the
Council of the European Union The Council of the European Union, often referred to in the treaties and other official documents simply as the Council, and less formally known as the Council of Ministers, is the third of the seven institutions of the European Union (EU) a ...
had called for an evaluation of the EU's relations with the sovereign European microstates of
Andorra Andorra, officially the Principality of Andorra, is a Sovereignty, sovereign landlocked country on the Iberian Peninsula, in the eastern Pyrenees in Southwestern Europe, Andorra–France border, bordered by France to the north and Spain to A ...
,
Monaco Monaco, officially the Principality of Monaco, is a Sovereign state, sovereign city-state and European microstates, microstate on the French Riviera a few kilometres west of the Regions of Italy, Italian region of Liguria, in Western Europe, ...
and San Marino, which they described as "fragmented", the
European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...
published a report outlining options for their further integration into the EU. Unlike
Liechtenstein Liechtenstein (, ; ; ), officially the Principality of Liechtenstein ( ), is a Landlocked country#Doubly landlocked, doubly landlocked Swiss Standard German, German-speaking microstate in the Central European Alps, between Austria in the east ...
, which is a member of the
European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade Asso ...
(EEA) via the
European Free Trade Association The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four List of sovereign states and dependent territories in Europe, European states: Iceland, Liechtenstein, Norway and Switzerland. ...
(EFTA) and the Schengen Agreement, relations with these three states are based on a collection of agreements covering specific issues. The report examined four alternatives to the current situation: 1) a Sectoral Approach with separate agreements with each state covering an entire policy area, 2) a comprehensive, multilateral Framework Association Agreement (FAA) with the three states, 3) EEA membership, and 4) EU membership. The Commission argued that the sectoral approach did not address the major issues and was still needlessly complicated, while EU membership was dismissed in the near future because "the EU institutions are currently not adapted to the accession of such small-sized countries." The remaining options, EEA membership and a FAA with the states, were found to be viable and were recommended by the Commission. In response, the Council requested that negotiations with the three microstates on further integration continue, and that a report be prepared by the end of 2013 detailing the implications of the two viable alternatives and recommendations on how to proceed. As EEA membership is currently only open to EFTA or EU members, the consent of existing EFTA member states is required for the microstates to join the EEA without becoming members of the EU. In 2011, Jonas Gahr Støre, the then Foreign Minister of Norway which is an EFTA member state, said that EFTA/EEA membership for the microstates was not the appropriate mechanism for their integration into the internal market due to their different requirements from large countries such as Norway, and suggested that a simplified association would be better suited for them. Espen Barth Eide, Støre's successor, responded to the Commission's report in late 2012 by questioning whether the microstates have sufficient administrative capabilities to meet the obligations of EEA membership. However, he stated that Norway was open to the possibility of EFTA membership for the microstates if they decide to submit an application, and that the country had not made a final decision on the matter. Pascal Schafhauser, the Counsellor of the Liechtenstein Mission to the EU, said that Liechtenstein, another EFTA member state, was willing to discuss EEA membership for the microstates provided their joining did not impede the functioning of the organization. However, he suggested that the option of direct membership in the EEA for the microstates, outside of both the EFTA and the EU, should be given consideration. On 18 November 2013 the EU Commission published their report which concluded that "the participation of the small-sized countries in the EEA is not judged to be a viable option at present due to the political and institutional reasons", but that Association Agreements were a more feasible mechanism to integrate the microstates into the internal market, preferably via a single multilateral agreement with all three states. In December 2014 the
Council of the European Union The Council of the European Union, often referred to in the treaties and other official documents simply as the Council, and less formally known as the Council of Ministers, is the third of the seven institutions of the European Union (EU) a ...
approved negotiations being launched on such an agreement, and they began in March 2015. By September 2023, negotiations between the EU and Monaco had reached a stalemate, and hence were suspended; some sources suggest a connection with disputes over financial supervision and money laundering, other sources suggested the stalemate was due to irresolvable disagreements over Monaco's policies of granting preference to its own citizens (and, to a secondary degree, France's citizens), which conflicted with the EU's principle of non-discrimination on the basis of nationality. Negotiations on the agreement continued without Monaco's participation, and the EU, Andorra and San Marino reached an agreement on the text in December 2023, pending formal approval by the EU's institutions and Andorra and San Marino's governments.


See also

* France–Monaco relations * Monaco–Spain relations *
Microstates and the European Union Currently, all of the European microstates have some form of relations with the European Union (EU). Andorra, Liechtenstein, Monaco, San Marino, and the Vatican City remain outside the Union. Andorra is, by population, the largest of ...


Further reading

*


References

{{DEFAULTSORT:Monaco-European Union relations Third-country relations of the European Union
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...