Andorra's Economic Model Exhausted, Warns Councillor Miró

Joaquim Miró, a Santa Coloma councillor and seasoned businessman, has warned that Andorra's current economic model—pushed by the ruling Democrats for Andorra (DA) party over the past 14 to 16 years—has reached exhaustion, as evidenced by social strains and key indicators.

In a recent interview, Miró described widespread perceptions of impending collapse, echoed by both residents and politicians. He pointed to limits in investments, taxation, and the overall country model, arguing it has fostered a stark divide between long-term workers struggling to make ends meet and high-net-worth newcomers treating Andorra like Monaco or Dubai. These investors, drawn by low taxes since foreign investment laws took effect around 12 to 14 years ago, prioritise real estate speculation over productive enterprises, exemplified by the failed Grifols project.

Miró criticised the influx of "low-cost" retail giants and mass tourism focused on cheap shopping, questioning whether Andorra can absorb the resulting population growth. He highlighted a growing social fracture: affluent digital creators and influencers—often dubbed "youtubers"—flaunt luxury lifestyles on social media, using Spanish predominantly and potentially eroding local identity, while traditional commerce declines and many locals face financial pressures.

The model, he said, attracts people solely for fiscal advantages—paying effective rates as low as 8-10% compared to 35-40% elsewhere—without broader contributions. This risks tensions with neighbours like Spain, where Andorra is increasingly seen as a tax haven for content creators targeting Spanish audiences.

To address this, Miró called for tax increases to align closer with Europe, including advancing association agreement goals. He advocated extending salary hikes tied to inflation—already standard in the public sector—to private employees and freezing rents beyond 2027. "What cannot happen is the public sector getting annual IPC-linked raises while the private sector does not," he argued, urging a shift away from aggressive, resource-intensive investments toward balance.