Andorra Economist Urges Closer EU Ties to Counter Global Shifts

Josep Oliver Alonso, emeritus professor of Applied Economics at the Universitat Autònoma de Barcelona, urged Andorra to strengthen ties with the European Union through its association agreement, warning that maintaining the status quo is not viable amid sweeping global shifts.

Speaking at a conference titled "Andorra in the Age of Change and the De-globalisation Reversal," organised by the Centre d’Estudis i Recerca Socialdemòcrata (Ceres) in Andorra la Vella, Oliver highlighted how the world has transformed since the 2008 financial crisis. He pointed to a reversal in the free movement of capital, people, businesses and outsourcing, fuelling economic nationalism amid US-China tensions, climate change, artificial intelligence, supply chain disruptions and xenophobic trends in ageing societies reliant on immigration.

"A microstate must recognise that conditions have changed since 25 years ago," Oliver said, stressing Andorra's economic dependence on Catalonia and Europe. He noted that when Catalonia's economy grows or slows, Andorra follows suit, and dismissed isolation as unrealistic: "The idea of withdrawing, building barriers and assuming external events won't affect you is never true."

Oliver contrasted Andorra's stagnating per capita income—once among the world's highest—with growth in small states like Cyprus, Malta, Luxembourg and Liechtenstein, which he attributed to closer EU links. He advocated viewing the association agreement philosophically, for the next 25 to 50 years rather than sector-by-sector, with transition periods included. "Staying still is not an option," he repeated, acknowledging public concerns over changing "the rules of the game," immigration and regulatory shifts but insisting adaptation is essential.

Ceres director Jaume Bartumeu introduced the event as a prompt for reflection ahead of a referendum, citing support from French Co-Prince Emmanuel Macron and Portuguese Prime Minister Luís Montenegro. He warned of risks if Andorra falters strategically, and praised Oliver's input for clarity in this "final stretch" of the process.

Oliver cited EU benefits during crises like Covid-19, with Next Generation funds aiding affected sectors, and trade wars under Donald Trump. He flagged Andorra's demographic challenges, per IMF projections of rapid ageing, calling for investment, economic diversification into telecoms, IT services, R&D and high-value sectors, and talent attraction. A closer EU relationship could provide a "lender of last resort" for finance and crisis safeguards, as seen in medical supplies during the pandemic.

While understanding reluctance to change, Oliver concluded that Andorra cannot afford a policy diverging from the EU's in this environment.