Like other European microstates, the economy of the Republic of San Marino has flourished in recent decades due to the development of an extensive banking industry. However, after the terrorist attacks of 9/11 and the subsequent international combat against fiscal evasion and money laundering practices, San Marino’s banking system has come under severe criticism, and its economy now has to be entirely restructured. Consequently, the financial and economic crisis of 2008 has a double impact on the smallest republic of Europe, and the country’s politicians are now debating the option of future EU-membership. San Marino’s double economic crisis has also led to increasing dissatisfaction with existing political practices such as clientelism and patronage, of which the negative consequences are now more clearly felt. Due to its small scale, Sammarinese politics has always been a question of personality and interpersonal relationships rather than ideology, which creates a political environment that is clearly different from larger European democracies. In the current research paper, the political and economic consequences of San Marino’s double crisis are outlined and discussed from a comparative perspective. The paper starts off with an overview of San Marino’s political history and contemporary political and economic institutions, in order to delineate the background against which the crisis unfolded. Subsequently, the impact and consequences of the 9/11 terrorist attacks and the 2008 economic crisis for San Marino’s political and economic institutions are discussed and assessed. Also in this section, a comparison will be drawn between the case of San Marino and the other European microstates of Andorra, Liechtenstein, and Monaco, in order to examine whether the counties have similar experiences going through the crisis. The paper finishes with an overview of the possible ways in which San Marino could emerge out of the crisis, and an indication of the economic and political changes that will be necessary in order to achieve this.
