Andorra, officially the Principality of Andorra , also called the Principality of the Valleys of Andorra , is a sovereign landlocked microstatein Southwestern Europe, located in the eastern Pyrenees mountains and bordered by Spain and France. Created under a charter in 988, the present principality was formed in 1278. It is known as a principality as it is a monarchy headed by two Co-Princes – the Roman Catholic Bishop of Urgell in Spain, and the President of France.
Andorra is the sixth-smallest nation in Europe, having an area of 468 km2 (181 sq mi) and a population of approximately 85,000. Its capital Andorra la Vella is the highest capital city in Europe, at an elevation of 1,023 metres (3,356 ft) above sea level. The official language is Catalan, although Spanish, Portuguese, and French are also commonly spoken.
Andorra's tourism services an estimated 10.2 million visitors annually. It is not a member of the European Union, but the euro is the official currency. It has been a member of the United Nations since 1993. In 2013, the people of Andorra had the highest life expectancy in the world at 81 years, according to The Lancet.
Due to its location in the eastern Pyrenees mountain range, Andorra consists predominantly of rugged mountains, the highest being the Coma Pedrosa at 2,942 metres (9,652 ft), and the average elevation of Andorra is 1,996 metres (6,549 ft). These are dissected by three narrow valleys in a Y shape that combine into one as the main stream, the Gran Valirariver, leaves the country for Spain (at Andorra's lowest point of 840 m or 2,756 ft). Andorra's land area is 468 km2 (181 sq mi).
Phytogeographically, Andorra belongs to the Atlantic European province of the Circumboreal Region within the Boreal Kingdom. According to the WWF, the territory of Andorra belongs to the ecoregion of Pyrenees conifer and mixed forests.
Andorra has an alpine climate and continental climate. Its higher elevation means there is, on average, more snow in winter, lower humidity, and it is slightly cooler in summer.
The population of Andorra is estimated at 85,458 (2014). The population has grown from 5,000 in 1900.
Two-thirds of residents lack Andorran nationality and do not have the right to vote in communal elections. Moreover, they are not allowed to be elected as president or to own more than 33% of the capital stock of a privately held company.
The population of Andorra is predominantly (88.2%) Roman Catholic. Their patron saint is Our Lady of Meritxell. Though it is not an official state religion, the constitution acknowledges a special relationship with the Catholic Church, offering some special privileges to that group. Other Christian denominations include the Anglican Church, the Unification Church, the New Apostolic Church, and Jehovah's Witnesses. The small Muslim community is primarily made up of North African immigrants. There is a small community of Hindus and Bahá'ís and roughly 100 Jews live in Andorra.
Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 10.2 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. Andorra's relative advantage has recently eroded as the economies of adjoining France and Spain have been opened up, providing broader availability of goods and lower tariffs.
One of the main sources of income in Andorra is tourism from ski resorts which total over 175 km (109 mi) of ski ground. The sport brings in over 7 million visitors and an estimated 340 million euros per year, sustaining 2000 direct and 10000 indirect jobs at present
The banking sector, with its tax haven status, also contributes substantially to the economy (the financial and insurance sector accounts for approximately 19% of GDP). The financial system comprises five banking groups, one specialised credit entity, 8 investment undertaking management entities, 3 asset management companies and 29 insurance companies, 14 of which are branches of foreign insurance companies authorised to operate in the principality.
Agricultural production is limited—only 2% of the land is arable—and most food has to be imported. Some tobacco is grown locally. The principal livestock activity is domestic sheep raising. Manufacturing output consists mainly of cigarettes, cigars, and furniture. Andorra's natural resources include hydroelectric power, mineral water, timber, iron ore, and lead.
Andorra is not a 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 lacked a currency of its own and used both the French franc and the Spanish peseta in banking transactions until 31 December 1999, when both currencies were replaced by the EU's single currency, the euro. Coins and notes of both the franc and the peseta remained legal tender in Andorra until 31 December 2002. Andorra negotiated to issue its own euro coins, beginning in 2014.
Andorra has traditionally had one of the world's lowest unemployment rates. In 2009 it stood at 2.9%.
Andorra has long benefited from its status as a tax haven, with revenues raised exclusively through import tariffs. However, during the European sovereign-debt crisis of the 21st century, its tourist economy suffered a decline, partly caused by a drop in the prices of goods in Spain, which undercut Andorran duty-free shopping. This led to a growth in unemployment. On 1 January 2012, a business tax of 10% was introduced, followed by a sales tax of 2% a year later, which raised just over 14 million euros in its first quarter. On 31 May 2013, it was announced that Andorra intended to legislate for the introduction of an income tax by the end of June, against a background of increasing dissatisfaction with the existence of tax havens among EU members. The announcement was made following a meeting in Paris between the Head of Government Antoni Marti and the French President and Prince of Andorra, François Hollande. Hollande welcomed the move as part of a process of Andorra "bringing its taxation in line with international standards".