What were the "red lines" that forced the suspension of a Monaco-EU agreement?

On the back of news that Monaco will not enter into the EU on a special Association Agreement, Monaco’s Conseil National has taken the step of publishing two legal and socio-economic studies that had been commissioned for the process, detailing exactly what impact the partnership would have meant for the residents and citizens of the Principality.

After years of negotiations, it was announced in September 2023 that Monaco and the European Union would be suspending talks regarding an Association Agreement between the Principality and the bloc.

At the time, the Prince’s Government released a statement pointing to the “impossibility of reconciling the demands of the European Union with the red lines established by H.S.H. the Prince at the opening of these discussions, which aim to ensure that the current living, working and housing conditions of nationals and residents in the Principality are maintained”.

See more: Monaco and EU suspend negotiations for an Association Agreement

A failure to negotiate

Those discussions, and ultimately the decision to suspend negotiations, were the culmination of years of back-and-forth.

Monaco’s stance was largely guided by two comprehensive reports commissioned specifically by the government: a legal study carried out by Cabinet Gide, and a socio-economic study produced by Strategy&.

On Tuesday 5th December, the Conseil National published both in-depth reports in full.

“Such an agreement would result in at least partial loss of legal sovereignty for Monaco.”

“Loss of legal sovereignty”

Parts of the socio-economic study had already been shared “for the sake of transparency” in July. The study notably focused on the “solidity of the [current] Monegasque economic model and the numerous uncertainties that an Association Agreement with the European Union would pose for the economy and employment, in particular that of Monegasques, and for the State”.

The gravity of its findings has been now supported by those of the legal report, which admitted that establishing an Association Agreement with the EU would require Monaco to modify its constitution and its sacrosanct ‘pacte social monégasque’ that enshrines the legal rights of its citizens.

Benoît Le Bret, the author of the legal report, also acknowledges that such an agreement would result in “at least partial loss of legal sovereignty” for Monaco.

Régis Bergonzi, who headed the monitoring commission regarding the negotiations, says that the two reports “highlight the risks of social disruption, with the end of national priority for Monegasques, and the risks that economic players in the Monaco market would have incurred” if the agreement had gone ahead.

There is no signal that negotiations will resume any time soon, if ever, but President of the Conseil National Brigitte Boccone-Pagès has indicated that, for better or worse, the impact studies will “serve as a basis for any reflection concerning possible sectoral agreements with our European partners”.

“Imposing freedom of movement, without a priority rule, would allow any European citizen to apply for a public position, which is not a feasible option in Monaco.”

Red lines

In reading the reports, the crux of the matter appears to be the issue of finding common ground between the EU’s stance on non-discrimination based on nationality. This, admits the National Council, is “nevertheless the very foundation of the Monegasque social pact”.

“This is, in fact, based on national priority in access to housing, employment and certain professions, supplemented by a series of specific advantages for French nationals and rights holders, woven over the years,” reads a statement from the Conseil National. “For [the EU’s] part, the current regulations specific to Monegasque-regulated professions cannot survive an Association Agreement. The same goes for certain administrative positions. Indeed, imposing freedom of movement, without a priority rule, would allow any European citizen to apply for a public position, which is not a feasible option in Monaco.”

“A privileged partner of the Principality”

Monaco’s position with regards to its relationship with the EU will continue much as it did before the negotiations were curtailed.

“The EU is and will remain a privileged partner of the Principality,” says the government. “The EU and Monaco share many common values and the Principality will continue to support the EU’s action on the international scene, particularly in terms of sanctions. Monaco therefore wishes to continue the dialogue and reflect, with the European Union, on ways to strengthen this relationship.”

Click here to access the socio-economic report and click here to access the legal study.

Join the Monaco Life community – the largest English media in the Principality.  

Sign up for the Monaco Life newsletter, and follow us on  Facebook, Instagram , LinkedIn  and Tik Tok.

Photo of the Throne Room in the Prince’s Palace by Monaco Life