[LINK] "Andorra’s model: time for change"

[rfmcdonald]

Fred Halliday's Open Democracy article on the question of how the Catalanophone Pyrenean microstate of Andorra can adapt to a rapidly changing environment, characterized not least by the disappearance of the tax haven.

Three decades after Pete Seeger's visit, a modern constitution confirmed the power of the representatives of the banking elite that have long dominated the principality. As long as the economic prospects were fine, and a steady stream of day-visitors from Barcelona and Toulouse, each under four hours away by car, came for duty-free goods and to take money from their undeclared bank accounts, there was no reason to change. But the shifting economic climate - as well as pressure from France and Spain over banking secrecy - has altered that.

The elections of April 2009 for the twenty-eight seats in the Andorran parliament brought to power for the first time the Andorran Social-Democratic Party (PSA), headed by the lawyer Jaume Bartumeu. The traditional ruling party, the Reformist Coalition (and a recent split from it, Andorra for Change [ApC]) were pushed into opposition. There is also a small Green Party, which won 3.5% of the vote, and supports the PSA: its representatives are proud to declare that they are the first party in Andorran history to call for a "republic", i.e. the abolition of the "co-princes" arrangement.

All parties have committed themselves to meeting the demands of the new European banking and taxation systems: if Switzerland is unable to resist pressure from Europe and the USA, it is evident even to the most resistant of Andorrans that they cannot either, even as they point out that the biggest fraud in Europe is not the existence of tax-havens, but the European Union's VAT system. Sarkozy's threats, and the sharpening of the global-governance response to the crisis reflected in the formalisation of the Group of Twenty (G20) at the Pittsburgh summit on 24-25 September 2009, have served to focus minds in the co-principality.

However, as younger Andorrans are quick to point out, it is not just the banking and tax systems that are in need of change, but the whole "Andorran model" of banking, duty-free and winter sports. At present, considerable efforts are going into promoting Andorra as an all-year round tourist resort. The country has a rich heritage of Romanesque churches - although, sadly, over 80% of all the original frescoes are now housed elsewhere (in the Museu Nacional d'Art de Catalunya in Barcelona, in private collections in the United States and other, unknown, places, and, in the case of some works stolen by the visiting members of the Gestapo during the second world war, in Germany). The country can certainly boast a healthy climate and its mountain slopes are ideal for summer walking.