The Conservative Continent: Europe and the Microstate

By William Finlator

According to the vogue interpretation of the meaning of Europe, the key to understanding the continent is understanding the Franco-German relationship. Europe’s heart, so the claim goes, lies somewhere along the Rhine – and around this axis, it is argued, the whole continent turns.

Yet, geographic centrality and physical size can be misleading – and to define Europe by its most important states would be to misunderstand the continent. Europe is not structured around a singular idea. In fact, the slow, arbitrary plod of historical contingency colours a continent deprived of clear essence. Instead, to understand Europe, we must look to its exceptions and paradoxes – a good place to find these are Europe’s microstates.

Holy Orders and Holy Borders

Europe is a hub for the microstate. In the continent there are at least six – Andorra, San Marino, Monaco, Liechtenstein, the Vatican City and Malta – and, because definition of the microstate is not a fixed one, arguably a lot more.

It’s no coincidence that we find so many here. ‘Microstatehood’ usually results from the essentially European mix of consent, conflict and negotiation.

Take the Vatican City. The smallest statelet in the world is a historical hangover par excellence. The result of weakness of an Italian state unable to assert itself over Papal power, the Vatican is a pragmatic reaction to political reality. The Pope, who retained the religious and political loyalty of much of Catholic Italy, leveraged his control of the nation’s hearts to earn secession of this small chunk of Rome away from the fascist Italian state in 1929[1].

The origin of the Vatican is indicative of the broader patterns of European order. More to do with compromise than capitulation, Europe is a continent defined by messy negotiation and the art of the fudge.

State and Exceptions

European microstates are often mongrel-states – not fully sovereign, yet not without a claim to full ‘statehood’, they straddle our pre-existing conceptual categories.  

Once again, the Vatican City is telling. This political oddity is state-like only in name. It is protected by Italian Armed Forces[2], has no embassies in its territory, and only has “Observer Status” at the UN[3]. The territory is administered by Cardinals, and the country is so small (0.44 square kilometres)[4] and has so few citizens (around 450)[5], that governing it is more like running a (very) wealthy local council than a modern state.

Europe is littered with similar entities that meet some but not all the conditions for statehood. The Sovereign Military Order of Malta[6] retains diplomatic relations with 112 countries but has no territory to govern. Several British ‘Crown Dependencies’, like the Isle of Man, Guernsey and Jersey, have effective self-governance, yet retain a semi-feudal connection to the British Crown.

Partially recognised semi-sovereign states are not just the preserve of Europe’s west. Look to the east and Abkhazia, South Ossetia[7] and Transdniestria all exist in the ambiguous hinterland between ‘state’ and Russian puppet[8]. A product of a region riven with the dual sceptres of both hate and fear, these pseudo-states are the scars of a contested present and a painful past. The result of Russian reaction to the traumatic loss of its Soviet sphere of control and the internal divisions of former Soviet states, these half-states nevertheless fit the European pattern. Awkward exceptions that resist easy categorisation, microstates are the essence of Europe.

EU and me

Perhaps the microstate is most enlightening because of what it tells us about the EU. The EU, bound by the principle of the rule of law, over and above brute realities of force, relies on principles of consent, cooperation and negotiation.

The microstate experience attests to this. Microstates tend to both be wealthy and have small populations – properties that translate into little domestic pressure for change. The result: weak motivations to bear the costs of European integration. Despite external pressure by larger neighbours and the EU to pursue further integration, a kernel of retained sovereign power prevents their full absorption into the whole.

Instead, Andorra, Liechtenstein, San Marino, the Vatican and Monaco stick out like pimples on a map of the EU. Each has a unique relationship with the European Union – and none are full members of the organisation.

Although many microstates sign up for aspects of EU rule, variation between states is significant. Liechtenstein is part of the Single Market and party to the Schengen agreement, but not the Eurozone[9]. Andorra, on the contrary, is Liechtenstein’s inverse: it is part of the Eurozone, but neither the Single Market nor Schengen Area[10].

As much as those sitting in the European Parliament or European Commission wish to stamp their authority onto the meaning of the EU, the EU always has and will be consent-driven. Deep structural changes needed to drive the organisation forward will always be given rather than taken.

This, the democratic, negotiated essence of the EU is nowhere better demonstrated than with the microstate. Tending away from grand visions and towards change that’s cooperative, necessary and boring, the microstate’s relationship with the EU attests to a conservative continent.

The Role and Rule of Law

Without law, the EU would be nothing – the EU was born in treaty and remains essentially a legal fiction. Yet, paradoxically, legal instruments and common bonds are precisely that which makes the EU so hard to rule – law is onerous, conservative and ponderous.

Such defects are displayed with no greater clarity than with the microstate – protected by sovereignty, statelets cling like limpets to the underside of the pan-European vessel.

Though rarely possessing military force, the microstate abuses the privilege of being integrated into various pan-European treaties, conventions and agreements. Most obviously, microstates are often accused of dubious financial practise. Such attitudes trickle down into political consciousness: mention ‘Monaco’, ‘Liechtenstein’, ‘Andorra’ or ‘Luxembourg’ and the first thing that comes to mind will be ‘tax haven’.

Rightly so. Microstates are some of the richest sovereign entities in world. Leveraging their relatively low fiscal burdens to reduce taxes – both personal and corporate – to attract international money flows is successfully pursued by many of them. In Andorra, total assets managed by companies domiciled in the country is twenty-three times Andorran GDP[11]. Similarly, Monaco and Liechtenstein have been so successful in attracting the super-rich, that their GDP per capita is the first and second highest in the world respectively[12].

The Imperfect Continent

The EU will always be imperfect, and some states will always be able to take advantage of that. The entity, created from and sustained by treaty, interprets the challenges of today through hard fought agreements, created to deal with the very different problems of a very different historical moment. Caught in a tight net of legal obligation, the EU faces the constant twin danger of unintended legal consequence and changing economic or political headwinds.

The microstate, itself a hark-back to a semi-feudal age, well demonstrate the character, defects and problems of Europe. Deeply weird, contingent and absolutely unnecessary, microstates are a footnote in a continent defined by the footnote. Hinting at an infinite complexity, Europe is continent defined by the exception.

[1] Duggan, C, ‘The Force of Destiny, a History of Italy Since 1797’, Chatper 27, Allen Lane, London












Image Source: Tarik Kizilkaya

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