How small is too small?

Yesterday the citizens of San Marino voted on becoming an EU member state. But is that even possible? 

As Brussels braces itself for the inevitable disappointment of a referendum on EU accession in Iceland, when or if that ever takes place, it will come as little comfort that another non-EU European country rejected EU membership yesterday.

The Republic of San Marino, the tiny microstate of 33,000 people situated within Northern Italy, held a referendum yesterday on whether to apply for EU membership. The proposition failed because not enough people turned out to vote. Though a narrow majority of people who voted approved the measure (50.3% versus 49.7%), a referendum needs 32% of eligible voters to vote yes in order for the measure to pass. The 'yes' vote amounted to just 20%.

Unlike an eventual Iceland referendum, the San Marino referendum was not a response any actual offer of EU membership.  The question of whether to start accession negotiations with Brussels was put to voters after a group of citizens collected the required number of signatures. No matter how the referendum turned out it was non-binding. It would be up to the San Marino government whether to actually request accession negotiations, and it would be up to EU member states whether to accept that request.

Had yesterday's vote gone a different way it would have thrown up a potentially awkward question for the EU – how small is too small? Can a microstate of 33,000 become a full-fledged EU member state equal to Germany, a nation of 80 million people? If it were a member state San Marino would get its own commissioner, four guaranteed seats in the European Parliament and a veto over key EU issues. This would surely be a disproportionate amount of power to give to these 33,000 people, no?

The republic is ten times smaller than the EU's smallest member state at the moment, Malta. Even Malta's status as a member state tends to raise some eyebrows. With a population of 452,000, it is not even half the size of the city of Brussels. A disproportionate system of qualified majority voting and seat allotment in both the European Council and the European Parliament means a Maltese citizen is far more represented in both bodies than a German citizen. On issues that require unanimity in the Council, a Maltese citizen has 2500 times more power than a German citizen. Ditto for Luxembourg, a founding EU member state with a population of 538,000.

So if this kind of ratio is acceptable, is it really such a leap to think of San Marino becoming a member state? Such size imbalances are, after all, common when it comes to regions within nations. For instance, a citizen of the US state of Rhode Island, which has fewer inhabitants than the city of Los Angeles, is 38 times more represented in the US Senate than a citizen of California. But then again, Rhode Island doesn't have veto power over US government decisisons. In the EU context, being your own member state rather than a region is a big deal (hence the strong desire by regions like Catalonia, Scotland and Flanders to move to such a status by declaring independence).

Vague relationship

San Marino currently has little in the way of formal relations with the EU. Like with other microstates, the relationship is mostly governed by their relationship with the country that surrounds them. San Marino is not technically in the Schengen area, but it has an open border with Italy. San Marino has been in a customs union with the EU since 1991 (a customs union that also includes Turkey). It also has a bilateral monetary agreement with the EU to use the euro currency. For the rest, San Marino has to follow EU law but there is no official mechanism for enforcement and there is no way for the Republic to have influence on the law – that is all done through Italy.

The ‘yes' campaign largely focused on the rights given to full EU citizens and the fact that San Marino should be able to shape the laws it has to follow by being part of the common market. Sammarinese citizens cannot work in the EU without a visa and they are not eligible for other benefits like medical care in an EU member state or reduced EU rates of tuition at European universities.

In a report on the status of EU relations with Andorra, Monaco and San Marino published last year, the European Commission said the current status of EU relations with these three countries is not tenable because it is fragmented and poorly codified, relying on a system of unofficial linkages. The report outlined four options for the microstates: a series of bilateral treaties as is the case with Switzerland, a multilateral Framework Association Agreement specifically for these three countries, membership of the European Economic Area (EEA), or full EU membership.

The report noted that "the EU institutions are currently not adapted to the accession of such small-sized countries," and also noted that the administrative capacity of these states would likely be overburdened by the responsibilities of membership. It also unsurprisingly ruled out a Switzerland-like arrangement, given that this relationship is currently fraught with problems and the Commission is pressuring Switzerland to move into a formalised relationship like the EEA – which obliges members to follow EU common market rules but allows exceptions to be made.

Liechtenstein, a principality between Austria and Switzerland with a population of 36,000, is a member of the EEA, giving it equal status to co-members Iceland and Norway. In theory, there should be little problem with the other microstates of similar size joining the EEA. But it would make the position of Norway and Iceland look increasingly strange, being part of a block that would then be mostly made up of microstates. In 2011 the foreign minister of Norway said that EEA membership for microstates would be "inappropriate" because of their different requirements from large countries like Norway. Norway could veto an applicants request to join the EEA.

It's not clear that EEA membership would be a desireable outcome for San Marino anyway. A big part of the 'yes' campaign in the run-up to this referendum was objection to the idea that San Marino must follow EU rules but has no say in creating them. The EEA would merely formalise this relationship. It is often called a “fax democracy” by government officials in Norway and Iceland because decrees come from Brussels that they must follow, and they have no way to have input on them. But the Norwegian and Icelandic governments have to live with this arrangement because they know a referendum for full EU membership would not pass.

With the San Marino referendum having been voted down, it looks like the EU won't have to deal with these issues immediately. But the confusing mish-mash of relationships with the EU that currently exists, brilliantly illustrated in this euler diagram from Wikipedia, is not tenable in the long term. An application from San Marino for EU accession would have forced some uncomfortable questions. Can any European country be a member state, no matter how small? What is the future of the EEA and who should be part of it? How do you formalise the EU's relationship with these countries without encouraging current members (such as the UK) to leave to join semi-detached arrangements like the EEA?

Eventually, these questions will have to be sorted out.