A tale of two microstates
After nine years of negotiations, the Commission announced that it has finally reached a deal to sign an association agreement with microstates San Marino and Andorra. The two countries will gain access to the European single market in an effort to mend closer ties with EU countries. They will be able to reap the benefits from the free movement of goods, services and people.
The free movement of capital, however, remains a hot issue amid concerns about their loose financial regulatory frameworks. The association agreement will, therefore, only allow access to financial services in the internal market.
Last month, the Economist reported that San Marino is regularly used by Russian and Chinese intelligence services to conduct financial transactions away from public view. By excluding their financial sectors, the agreement seeks to diminish the likelihood of illegal financial activities, while also ensuring the preservation of the economic advantages it will provide for tourism and trade.