Secrets of the Seven Smallest States of Europe: Andorra, Liechtenstein, Luxembourg, Malta, Monaco, San Marino and Vatican City is a fact-filled book about the histories, cultures, economies, languages, and more, of these European microstates. The book also contains information for prospective travellers to the microstates of Europe. While the book is almost entirely descriptive and contains very little by way of analysis, on occasion the author Thomas M. Eccardt offers a few often astute observations and comments. "The European microstates", he notes, "all have mature service economies, and most have very little heavy industry or agriculture. They may represent the future of bigger states."
As the book (published in 2004) documents, these microstates are among the most affluent countries in the world. Crime rates are extremely low. Taxes in general are low in the microstates: "There is no income tax in Monaco and Andorra. The highest income tax rate in Liechtenstein is 16 percent ". "Andorra has the world’s highest life expectancy, and San Marino has the second highest. In fact, all the microstates of Europe sustain long average life spans, and they have the lowest levels of unemployment as well." "The seven microstates have generally done a good job of managing their natural environment. Perhaps their limited resources have led them to take exceptionally good care of what they have." "Another interesting aspect of these countries concerns the military - they have little or no armies. Hopefully, the microstates will lead the way to the future in this regard, too." As the author concludes at one point: "Obviously, these positive qualities of life are worth looking into."
The author notes that "Throughout the ages, the borders of these nations have been remarkably stable compared with those of their bigger neighbors".
While other European countries were taking turns conquering and dominating the continent, the microstates, without territorial ambitions, were able to maintain their borders mostly by minding their own business.
With the exception of Luxembourg (the biggest of the seven microstates) who is a member of NATO, the microstates of Europe are neutral and four of the seven microstates have no annual defense budget. Liechtenstein disbanded its entire army in 1868.
While the European microstates are not generous in bestowing citizenship upon their many foreign residents,
... they have been generous in helping the citizens of their neighbors. Andorra remained neutral during the Spanish Civil War and, after that, during World War II. It became an escape route for refugees from Spain fleeing to France, and then vice versa. San Marino took in one hundred thousand refugees fleeing fascist Italy during the same period: there were more than four guests for every inhabitant. Seventy years before that, San Marino took in many refugees fleeing retribution during Italy’s struggle for unification, including one of its heroes, Garibaldi. Malta was another important refuge for Italians during the Risorgimento.
Luxembourg was a founding member of the European Union and Malta joined the EU in 2004, but the other microstates of Europe have not been so eager to join political unions, "possibly because they fear elimination of their [relatively] unregulated industries." Andorra, Monaco, and San Marino use the Euro as their currency, which interestingly puts them inside the "Euro zone" while outside the EU. Liechtenstein is in a currency union with Switzerland and is "happy to remain in the European Free Trade Association."
The success of the microstates has often drawn jealous eyes from outside. As the author notes while a microstate may be willing to accept some "legal limitations" imposed on them from the outside (in exchange for benefits bestowed on them by their "big sisters"), they "may also have to put up with a certain amount of downright bullying as well. If a big sister is unhappy with a tiny nation's policies, there is little the latter can do to defend against any backlash." Examples of such bullying include the Italian ban on San Marino operating a radio station and when the French banned the importing of pharmaceuticals from Monaco.
It seems that big sisters are always trying to force "reform" on the microstates to eliminate the special industries that arise from the fact of being a small state. But whenever one such industry is eliminated, another always seems to pop up in its place.
Several of the microstates are monarchies and not fully democratic. As the author points out "Some people associate monarchies with dictatorial rule, but that has never been a valid assumption. Monarchs have always delegated their duties, and many did not interfere with the carrying out of those duties. Today most monarchs' activities are strictly limited by law, and they are largely ceremonial." From a classical liberal perspective, at least, a relatively laissez-faire monarch is much to be preferred over a democratically elected busybody.
In many respects, the European microstates can be seen as tiny bastions of freedom. They can serve as role models for others seeking independence. And, perhaps, even represent the future of Europe?