[1] Monaco is a de facto member of the Schengen area (its borders and customs territory are treated as part of France) and it officially uses the euro as its sole currency.

[citation needed] Monaco joined the Council of Europe in 2004,[2] a move that required it to renegotiate its relations with France, which previously had the right to nominate various ministers.

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.

[7] 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] By September 2023, negotiations between the EU and Monaco had reached a stalemate, and hence were suspended; some sources suggest a connection with disputes over financial supervision and money laundering,[15] other sources suggested the stalemate was due to irresolvable disagreements over Monaco's policies of granting preference to its own citizens (and, to a secondary degree, France's citizens), which conflicted with the EU's principle of non-discrimination on the basis of nationality.