Microstates and the European Union

Liechtenstein is a full member in its own right of the Schengen Agreement, European Free Trade Association (EFTA) and Dublin Regulation on asylum and has signed an agreement to participate in the Prüm Decisions, while Monaco has an open border with France and Schengen laws are administered as if it were a part of France.

Arrival from outside the Schengen Area is allowed in Monaco,[3][4] but not in San Marino and the Vatican City as they have no border controls.

Had Iceland acceded to the Union, it would have become the EU's smallest state measured by population, but twelfth largest by geographical size.

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.

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.

[11] 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.

[14] 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 (Andorra, Monaco & San Marino).

[21] The Commission formally put forward a proposal to the Council of the European Union in April 2024 to adopt decisions approving that the agreement be signed and concluded.