Land

The Principality of Andorra (Catalan: Principat d'Andorra, French: Principauté d'Andorre, Spanish: Principado de Andorra) is a small, landlocked principality in southwestern Europe, located in the eastern Pyrenees mountains and bordered by France and Spain. Once isolated, it is currently a prosperous country mainly because of tourism and its status as a tax haven. It has the highest life expectancy in the world, at 83.51 years. Andorra is not to be confused with the commune of Andora in Italy. Andorra has no military force of its own; its defence is the responsibility of Spain and France.

Economy

Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 9 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. Andorra's comparative advantage has recently eroded as the economies of adjoining France and Spain have been opened up, providing broader availability of goods and lower tariffs.
The banking sector, with its tax haven status, also contributes substantially to the economy. Agricultural production is limited—only 2% of the land is arable—and most food has to be imported. The principal livestock activity is domestic sheep raising. Manufacturing output consists mainly of cigarettes, cigars, and furniture.
Andorra is not a full member of the European Union, but enjoys a special relationship with it, such as being treated as an EU member for trade in manufactured goods (no tariffs) and as a non-EU member for agricultural products. Andorra lacks a currency of its own and uses that of its two surrounding nations. Prior to 1999 these were the French franc and the Spanish peseta, which have since been replaced by a single currency, the euro. Unlike other small European states that use the euro, Andorra does not yet mint its own euro coins; in October 2004, negotiations between Andorra and the EU began on an agreement which would allow Andorra to mint its own coins. Andorra’s natural resources include hydropower, mineral water, timber, iron ore, and lead.

History

Tradition holds that Charlemagne granted a charter to the Andorran people in return for their fighting the Moors. Overlordship of the territory passed to the local count of Urgell and eventually to the bishop of the diocese of Urgell. In the 11th century a dispute arose between the bishop and his northern French neighbour over Andorra.
In 1278, the conflict was resolved by the signing of a paréage, which provided that Andorra's sovereignty be shared between the French count of Foix (whose title would ultimately transfer to the French head of state) and the bishop of La Seu d'Urgell, in Catalonia, Spain. This gave the small principality its territory and political form.
Over the years the title passed to the kings of Navarre. After Henry of Navarre became King Henry IV of France, he issued an edict (1607) that established the head of the French state and the Bishop of Urgell as co-princes of Andorra.
In the period 1812–13, the French Empire annexed Spanish Catalonia and divided it in four departments. Andorra was also annexed and made part of the district of Puigcerdà (département of Sègre).
In 1933 France occupied Andorra as a result of social unrest before elections. On July 12, 1934, an adventurer named Boris Skossyreff issued a proclamation in Urgel, declaring himself Boris I, sovereign prince of Andorra, simultaneously declaring war on the bishop of Urgel. He was arrested by Spanish authorities on July 20 and ultimately expelled from Spain. From 1936 to 1940, a French detachment was garrisoned in Andorra to prevent influences of the Spanish Civil War and Franco's Spain. Francoist troops reached the Andorran border in the later stages of the war.
During World War II, Andorra remained neutral and was an important smuggling route between Vichy France and Spain.
Given its relative isolation, Andorra has existed outside the mainstream of European history, with few ties to countries other than France and Spain. In recent times, however, its thriving tourist industry along with developments in transportation and communications have removed the country from its isolation and its political system was thoroughly modernised in 1993, the year in which it finally became a member of the United Nations.