CEO of Privatam Monaco, Massimo Passmonti is sharing his vision on possible relationship between Monaco and Europe.

Monaco’s relationship with the EU is a complex one. Its access to the single market is permitted based on bilateral treaties signed with France and not on a formal agreement with the EU. But if the tiny Principality wants to play a bigger role in Europe, and in the world, this informal relationship is no longer sufficient. Aware of this limitation, in 2015, Monaco started negotiations with Brussels to define the details of its EU membership. These talks are ongoing.

What could Monaco learn from the negotiations the U.S. carried out with China in the early 70s?

Henry A. Kissinger, the then National Security Adviser, acknowledged that a Sino-US rapprochement was only possible if Washington shifted away from a principles-based logic and adopted a new way of thinking. He also recognised that establishing a relationship with the Chinese required a deep understanding of their ‘intangibles’. Similarly, if the European Union really intends to welcome Monaco amongst its members, it needs to change its current approach. To do this, it must understand Monaco’s intangibles and comprehend the consequences that the application of the ‘four-freedoms-principle’ would have on the Principality. The ‘four freedoms’ are considered core beliefs and essential norms to which every member state needs to adhere. But, like all principles, they have an absolute character, and this hinders the ability to explore the terms of a ‘special relationship’ that will allow Monaco to become a member without harming its survival.

Monaco has three main priorities that will shape its future EU membership status.

The first is the ‘preferential treatment of Monegasque nationals’. Monegasques represent a small fraction of total residents and have lived as a minority in their own country for most of its history. Monaco has implemented legal protections for its citizens over foreign nationals. Monaco’s constitution explicitly restricts certain professions to non-Monegasque individuals. The application of the ‘free movement of services’ would immediately create a highly competitive labour environment within an extremely restricted territory which could result in previously unexperienced social issues. Local firms and professionals would be forced to move out of Monaco to seek new revenues and this in turn would either force nationals to emigrate or to lose their jobs with a consequent high national unemployment.

The second is the ‘control of the Monegasque borders’. Monaco’s constitution also guarantees housing priority to its national citizens. The application of the ‘free movement of people’ would increase immigration which in turn would create an unsustainable strain on housing. Monegasque nationals would be forced to leave their own country because of the lack of affordable accommodation. If the demographic pressures become so acute to harm the national equilibrium, this could alter the domestic social and cultural balance and may lead to unexpected consequences. The last is the ‘preservation of the Monegasque national identity’. The ‘four freedoms’ aim at eliminating frontiers and facilitating exchanges between European members. Whilst the impact this has on bigger nation’s identity is small, the consequences on a small country like Monaco could be disproportionally big.

The risk is that the ‘four freedoms’ could obliterate Monaco’s social, territorial, and cultural borders. It could rapidly lose its national identity if the foreign influences are so big to harm its socio-cultural distinctiveness. Thus, accepting a literal application of the ‘four-freedoms-principle’ would not only weaken the protection offered to locals but would also threaten Monaco’s own survival. Without a Monegasque population there would not be a Monegasque national identity. And without a Monegasque national identity there would not be a Principality of Monaco. A country without its citizens would cease to have a meaning in the modern sense of state. The ‘four freedoms’, that have been developed to protect the minorities, foster growth and seek prosperity for European nations, would in fact achieve exactly the opposite for Monaco.

If Europe wants to seek a solution to Monaco’s membership, it needs to understand these subtle ‘intangibles’ and their (in)compatibility with the ‘four-freedoms-principle’.

It must analyse what is at stake for the Principality and what it risks losing if it accepts the current terms of its membership. It must comprehend that the relationship that Monaco wants is not a special relationship but simply a relationship that ensures protection to its local minority: a relationship of equals despite its disproportionate differences with all other European nations. Special terms, different from those of bigger member states, are simply the means to achieve this.

Kissinger once wrote that “statesmanship needs to be judged by the management of ambiguities, not absolutes”. Brussels must accept that granting a special membership with a more flexible and ‘ambiguous’ interpretation of the ‘four-freedoms-principle’ is the only way to achieve the full integration of all European nations. The European project would simply remain incomplete without the inclusion of microstates, such as Monaco, Andorra, or San Marino, in its circle of members.

Article: Massimo Passamonti