Observatory of the Andorra Brand: Association Agreement, Window of Opportunity and “Impact” on Andorra

“The true impact must come from within each of us, and that’s why it will be necessary for more than one to open their eyes!”

As we mentioned in the previous article, we will try to analyze from now on all those aspects included in the negotiation of the association agreement with the EU that can influence the international projection of the Andorran jurisdiction and therefore the Andorra Brand.

To begin with, it seems that we are at the end of the negotiation and that the will of both parties is to close an agreement before the end of the year. Indeed, some critical voices have emerged saying that there are very significant issues on the negotiating table to close it so quickly. Perhaps they have a point, however, as our negotiators explain, the complex and already defined agenda of the EU means that, even though it is presented to us as a window of opportunity with no evident option for an extension, since in January 2024 the EU’s agenda changes and other issues, such as negotiations with other European countries for a future enlargement of the Union, will become priorities. The fact of having only three months to close the agreement is causing concern and generating pressure.

As we already indicated, and since the deadline is approaching, both negotiating parties are setting their final positions on the last issues, still pending negotiation. Among the thorniest is the proposed financial protocol, which as written is alarming, much like the known opinion of the EU’s financial regulators, perhaps more distrustful because of our past than because of the transparency developed over more than a decade. Still, they are critically concerned at a time when our national self-esteem is particularly sensitive. Those who say that negotiating this protocol, which is evidently unacceptable in its current wording, requires more time than the remaining 3 months, cannot be denied. But, as the negotiating Secretary of State has indicated, it will not follow the same schedule as the other 24 negotiated annexes. The negotiating protocol will be different and ad hoc for this particular issue, and it seems that it will be possible to meet the planned deadline, and we hope that under minimally acceptable conditions.

In fact, those who truly understand claim that the negotiation of this financial protocol will be quite tough and that there is the precedent of France’s 2019 “non-paper” which already questioned Andorra’s financial services and argued that we could not be accepted what was denied to Switzerland. In any case, it is advisable to consult and rely on Andorran financial institutions to know what the acceptable and assumable limits are.

But the atmosphere became even more tense with the sudden withdrawal from negotiations by Monaco, influenced by other circumstances unrelated to Andorra’s position. This has served for the opponents of the agreement to value the economic impact study that seems to have been useful for the Monegasque negotiators to advise suspending the negotiation. This attitude also seems to support those who, even being pro-agreement, consider that the financial protocol is so tough and unacceptable that more time is needed to negotiate under proper conditions.

And here we have, due to the insistence of some political group and showing commendable statesmanship, the Government has decided to promote an economic impact study, presumably inspired by the Monegasque one. Thus, through “Andorra Research and Innovation”, an urgent international competition has been called to conduct a study on the economic impact of the association agreement with the EU. The maximum deadline for submitting applications would be October 25, exactly two months before Christmas. The question that follows is whether this study will arrive in time to influence Andorra’s decision to sign or not the agreement. I highly doubt it if the study is done as it should be, meaning thoroughly and rigorously. However, assuming that we trust our negotiators to close the agreement before the end of the year, it will be useful for the referendum campaign and for specialists, economic and social agents, and the general public to have solid enough information to assess the convenience of a “yes” or “no” depending on the case.

Another indication of the importance given to this final stage of negotiation was the initiative from the State Pact for negotiation with the EU. It consisted of the appointment of the two previous Heads of Government, Jaume Bartumeu and Antoni Martí, main promoters in their time of this future agreement with the EU, as observers of the negotiation. Undoubtedly, an exceptional reinforcement from two major endorsers of one of the initiatives that will most determine our country’s future.

In the meantime, we are getting to know more details of the negotiations, especially about a particularly sensitive issue, such as the freedom of movement of people, which worries many. On this topic, a lot of demagogy has been made, and it needs to be explained very well, as we will try to do in upcoming articles. It is clear that the agreement will bring changes in immigration matters, but we know that a quota system similar to the current one and inspired by the treatment given to Liechtenstein, a member of the European Economic Area since 1990, will be respected for us.

This system separates active European residents from passive ones, as main categories, eliminates the requirement for criminal records in certain cases, replaced by a self-declaration of the new resident, although maintaining them for certain liberal professions, eliminates the category of cross-border workers, an issue that does not have much practical significance, and perhaps also eliminates the bonds currently imposed on certain categories of residents, always referring to European citizens. In general, and despite the more detailed analysis that will be made, it is expected that this aspect, combined with the maintenance of border controls, will ensure security and public order as before.

In fact, if you walk through the streets of Liechtenstein’s main urban center, despite the concentration of industries and service companies, you realize that in 33 years they have not had any significant public order problems. This despite having open borders as they are part of the Schengen area, an issue that, by the way, is outside of Andorra’s negotiation with the EU.

Regarding this freedom of movement of people, we saw this week how the academic year of the University of Andorra was officially inaugurated. In a very timely pedagogical exercise, our Head of Government highlighted the great opportunity that it meant for Andorran students and future professionals to access the European Internal Market. And now I wonder, how is the impact measured that it can mean for Andorran citizens to access said Market? And on the contrary, as I have often highlighted, how is the impact measured of the future development of an offline university campus full of European students attracted by Andorra’s new offer with degrees subject to the mutual and automatic recognition of the European Economic Area?

As I have often heard our negotiators say, the real positive impact of the agreement largely depends on all of us, on how seriously we take the opportunities it offers. The objective conditions will be there, but attitude is key to the success that comes from taking advantage of them. And, above all, a lot of education will be needed, as has been done so far, or perhaps more, because if there really are advantages and opportunities, we will need to learn how to take advantage of them. This should draw attention to those who need to take responsibility from public institutions, but also from the responsibility of all those who truly believe in it.

Impact studies, agreed! But let’s not forget that the real impact must come from within each of us, and for that, more than one will need to remove the blindfold from their eyes!

By Pere Augé, CEO and Founding Partner of Augé Holding Group

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