After seven years of negotiations, the Government of Andorra and the European Union are looking to close an association agreement, which is expected to be a reality in the second half of this year, during Spain’s presidency of the Council of the EU. This was confirmed by the head of Andorra’s government, Xavier Espot, in his speech at the Barcelona Tribuna forum, which promotes the Barcelona Economic Society of Friends of the Country, the Spanish Association of Managers and La Vanguardia.
The association agreement, which Andorra and the EU began to negotiate in 2015, will have as its main implication for the Principality its access to the Internal Market of the Twenty-seven, with which people, goods, services and capital will be able to move freely between both spaces, although Some specific Andorran needs will be respected, based on its reduced geographical and demographic dimension.
The new agreement between Andorra and the EU will be equivalent, in technical terms, to the conditions that the member countries of the European Economic Area have and one of the practical consequences will be the elimination of roaming for telephone calls, Espot has assured. “You will be glad, because when you go to Andorra you will not have to pay for it”, he said, arousing some affirmative laughter from those present. Sharing a table with the Andorran head of government were, among others, the Bishop of Urgell, Joan Enric Vives, Co-Prince of Andorra; the Minister of the Interior of the Generalitat, Joan Ignasi Elena; the assistant to the presidency of the Godó Group, Ramon Rovira; the lawyer and president of Amics del País, Miquel Roca, who presented the event, and the deputy director of La Vanguardia Enric Sierra, who led the subsequent discussion. In the room was also the former Minister of Industry Joan Majó.
Espot began his speech by explaining the changes that have taken place in the Andorran economy to make it “comparable” to the rest of the European economies and competitive. Last year it closed with a surplus of no less than 70 million euros, on a budget of 400 million. “The financial sector is the one that has experienced the most profound change, but with the lifting of bank secrecy it continues to be a solid pillar. Someone might have thought that without offshore it would be harmed, but Andorran banks are growing, concentrating on private banking and asset management”, he assured. He also highlighted that Andorra has an attractive tax model for entrepreneurs and a legal framework that is also attractive for companies. “But the live-work binomial is what makes us unique and very competitive, and that is why today it attracts digital nomads, which allow us to diversify the economy,” he said.
Regarding the agreement that Andorra is negotiating with the EU, the Principality’s head of government has highlighted that there are already some closed chapters, such as the one referring to the free movement of goods. Andorra maintains the 1990 customs agreement, which excludes agricultural products, with a transition period of 30 years to enter into a full customs union.
The chapter that is being negotiated now is the free movement of people and the free provision of services, with some pitfalls in relation to immigration policy and the will of the Principality to maintain the two public operators of telecommunications and electricity, which act as monopolies.
Regarding migration policy, the Andorran president has opted to establish migration quotas, and has highlighted the precedent of the agreement reached with Liechtenstein, a state that was guaranteed quotas for residents with work and without work. “This model would be very convenient for us, I am confident that we will reach an agreement,” Espot assured, specifying that in the talks they are already calculating the annual quotas according to population growth. Another hot point of the talks is the systematic control of people’s criminal records, which is a requirement of Andorra, but Espot predicts that there will be an agreement.
Regarding Andorra’s desire to maintain the two public telecommunications and electricity operators, he has ensured that the fact that they are monopolies “is not at odds with the quality of service”, which he has stressed is good. Espot has celebrated that they have a preliminary agreement with the EU for the electricity sector, and has recalled the precedent of Corsica (France), which was allowed to maintain an exclusive electricity operator. Regarding telecommunications, he has assured that it will be the nucleus of the negotiation. “But we agree that roaming has to disappear, although it is a very important source of income for Andorra Telecom”, he assured.
Espot has been optimistic that an agreement will be reached on all the points in conflict. “The negotiations are very well on track, it will allow us to enter the internal market of the EU, and we will do so with respect to some reasonable specificities”, he pointed out.
Andorra and the EU leave the negotiation of the free movement of capital until last, a chapter in which Espot has also predicted that there will be an understanding. The Principality will accept that bank branches from other countries be installed in its territory “as long as the Andorran ones are in a position to compete on equal terms”, for example that they can have access to the liquidity mechanisms of the European Central Bank, but it has admitted that there will be a long transition because now “everything is very embryonic”.
“The association agreement that we negotiated is atypical. When we analyzed the possible reserves, we saw that being a member country was not the best fit for the Andorran reality”, explained Espot, who highlighted the interest that the Principality had in entering the Economic Area European Union, an option like that of Iceland or Norway, but which requires the unanimous support of all member countries. “It is a closed club and these countries have no interest in others entering, and this is not because of Andorra, it is like that”, she has detailed. “It was not possible. But the EU, in an effort of generosity, proposed an agreement identical to or very equivalent to that of the Economic Area, but which will be done via an association agreement, with a slightly atypical methodology,” he detailed. There will be a framework agreement, common to Monaco, San Marino and Andorra, in their relationship with the EU and then specific country-protocols for each of them.
