Why is Andorra in the news this week?
Spanish Prime Minister Mariano Rajoy visited Spain’s tiny northern neighbour of Andorra this week, in what marked the first ever visit to the principality by someone in his position.
While there Rajoy is reported to have come to an agreement with his Andorran counterpart, Antoni Martí, to combat tax fraud by Spaniards in Andorra — an extremely hot topic in Spain since former Catalan president Jordi Pujol admitted he kept several million euros stashed away in the Pyrenean principality for 34 years.
Pujol is due to appear in court in Catalonia on January 27th
So what's this about Andorra being a tax haven?
The recent Jordi Pujol controversy is one of a string of similar stories about well-known Spaniards and Andorran banks.
Just before Christmas Day 2014, famed opera singer Monterrat Caballé was convicted of tax fraud after not declaring her earnings in 2010 and listing her residence as being in Andorra "for the sole purpose of not paying tax" according to the prosecution.
Spanish motorbike racer Marc Márquez also raised eyebrows in late 2014 when he announced her was moving to Andorra. He then changed his mind in the face of the negative public reaction to the news.
Spanish newspaper El País said in December that during the last few months local police had seized large sums of money from cards leaving Andorra and heading back into Spain.
Downtown Andorra la Vella. Photo: AFP
The paper also reported that after the news of Jordi Pujol broke, many Spaniards started emptying their Andorran bank accounts.
In 2013, checkpoint police seized over €3.1 million ($3.7 million) in cash.
Do Spain and Andorra enjoy good relations?
Spain and Andorra have been linked for centuries. Andorra now uses the euro (although it is not a member of the EU, it has a special agreement) but before that it used the peseta, the former currency of Spain.
One of the co-princes of Andorra is always a Spaniard, the Bishop of Urgell, in Catalonia. One of Andorra’s six embassies around the world is located in Spain, while often, a country’s ambassador to Spain (for example Great Britain’s and the United States’) is also the ambassador to Andorra.
So what else do we need to know about Andorra?
Andorra is a co-principality which means its heads of state — a mostly symbolic role like that of the British Queen — are two princes, one is the president of France and the other the Bishop of Urguell, in Catalonia.
This strange set up means that Francois Hollande, in his role as the co-Prince of Andorra, is a reigning monarch as well as being the elected (in France, not Andorra).
French President and Andorran co-prince Francois Hollande signs autographs in Andorra in 2014. Photo: AFP
Andorra does not have its own army; responsibility for defending the country rests on France and Spain. In case of emergency or natural disaster though, an alarm (the Sometent) is sounded and all able-bodied men between the ages of 21 and 60 have to help out.
By law, the male head of every household should keep a gun in case of some such emergency, another reason to be extra polite when invited to lunch in an Andorran home.
Andorra is also the only country in the world to have Catalan as its official language, but Spanish, Portuguese and French are also commonly spoken. When Andorra joined the UN in 1993, the country’s prime minister’s speech to the UN assembly was the first ever to be given in Catalan.
Andorra’s capital, Andorra la Vella, is the highest capital city in Europe, at 1,023 metres (3,356 feet).
Also, Andorrans live long: the country has the longest life expectancy in the world according to a December 2014 report in medical journal The Lancet.
Andorra at a glance
Size: 468 square kilometres (181 square miles)
Capital: Andorra la Vella
Official language: Catalan
Heads of state: French president Francois Hollande and archbishop Joan Enric Vives i Sicília (Bishop of Urgell, Catalonia)
Head of government: Prime Minister Antoni Martí