San Marino is a country located in the region of Southern Europe. After eight years with a center-right alliance in power, the Left Alliance won the Adesso.sm in the 2016 parliamentary elections. In recent years, San Marino has been forced to deal with a dramatic downturn in the economy in the wake of the economic crisis in Italy. Politics has been dominated by the question of how best to deal with the negative consequences of the crisis.
San Marino’s domestic policy has a tradition of cross-border cooperation. Government coalitions between right and left have been commonplace, and political issues have often been resolved by consensus and compromise.
- Countryaah: Country facts and history of San Marino, including state flag, location map, demographics, GDP data, currency code, and business statistics.
The 2012 parliamentary election was won by San Marino’s joint best with the Christian Democrats as the largest party. In addition, the People’s Alliance and the Socialist and Democrats party were included. The new alliance gained its own majority in Parliament with just over half of the vote.
However, disagreement within the governing alliance led to the dissolution of Parliament and the announcement of a new election until 20 November 2016, a year in advance. Prior to this, new coalitions were formed (see Political system). Eleven parties participated in the parliamentary elections, nine of which were part of an alliance. San Marino, first of all, including the Christian Democrats, the Socialist Party and the Socialist Party and the Democrats, received 42 percent of the vote. The Alliance Adesso.sm, including some leftist parties, received 30 percent of the vote, while the Alliance Democracy Movement came in third place. However, none of the coalitions received enough votes to control a majority of the seats, and a second round of elections was held. In this, Adesso.sm won by close to 58 percent of the vote, giving the alliance 35 seats in parliament. San Marino first of all came in second place.
Parliamentary elections were held again on December 8, 2019. In the elections, the Christian Democratic Party was the largest with 33 percent of the vote and 21 seats, while For Tomorrow came second with about 25 percent of the votes and 15 seats. Together for the Republic, which included the Socialist Party and the Socialists and Democrats, among others, received eight seats. Neither of the two largest alliances had received at least 50 percent of the vote or 30 seats in parliament, which is required to form a government. But according to the Election Act, which was amended in June 2019, the two largest groups each have 15 days to try to find coalition partners and form a government. After negotiations, the Christian Democrats, For Tomorrow and Together for the Republic formed a coalition government.
The close economic ties with Italy have caused San Marino to be severely affected by the euro crisis and since 2008 governments have been forced to deal with both a reduction in gross domestic product, GDP, as well as falling tax revenues and growing budget deficits (see Finance).
Following a dramatic fall in GDP in 2009, the International Monetary Fund (IMF) declared that government spending must be reduced, the pension system reformed and health care costs introduced. Instead, the government chose to raise income tax, introduce property tax and increase the tax on labor that commutes into the country from Italy. The latter was met by criticism in the European Parliament.
The financial crisis has also undermined San Marino’s position as a tax haven, and the capital flight from the country’s banks has been great. In mid-2012, the finance minister said that in a short time, San Marino’s banking system lost EUR 5 billion, one-third of all capital invested, due to Italian tax amnesty for Italians who took their assets from accounts in tax havens.
Demands were long onerous from the OECD, the EU and not least Italy that San Marino would facilitate banking secrecy and become more cooperative in the fight against tax evasion. In 2009, these demands were tightened due to the international financial crisis, and the San Marino government took a number of measures to meet them (see Finance). The same year, several executives at San Marino’s largest bank were arrested for money laundering.
In 2011, the OECD removed San Marino from its so-called gray list of tax havens, and in March 2012, San Marino and the EU entered into an agreement in which the country agreed to comply with EU legislation in preventing fraud, counterfeiting and money laundering and to comply with the requirements of ongoing statistical reporting. Another agreement was signed with the EU in April 2016 with a view to tightening the measures against tax evasion through automatic information exchange between San Marino and the EU.
As a result, an extensive tangle of money laundering and bribery, etc., in the bank Banca Commerciale Sammarinese, with high politicians involved, has been able to start building up. At the beginning of 2016, a trial was initiated which is expected to last for several years.
However, Italy has remained on its black list for the time being. The government in San Marino accused Italy of not recognizing the improved transparency and of imposing unreasonable demands.
There is a historically strong freedom tradition in San Marino, which has especially turned to dominance from the surrounding Italy. This tension became particularly evident in the conflict over San Marino’s status as a tax haven, and the contradictions were reinforced by the financial crisis.
In June 2012, however, the two countries signed an information exchange agreement on bank balances and entered into a double taxation agreement the following year. As a result, in February 2014, San Marino was removed from Italy’s black list.
In May 2016, a referendum was held in which a majority voted yes, among other things, to limit government salaries to € 100,000 a year.
At the end of 2018, San Marino was removed from the EU’s “gray list” of countries that still have some way to go in meeting transparency and cooperation requirements in their tax systems.
FACTS – POLITICS
Republic of San Marino / Republic of San Marino
republic, unitary state
Heads of State and Government
Alessandro Mancini and Grazia Zafferani 1
Most important parties with mandates in the last election
Christian Democratic Party 21, Alliance For Tomorrow 15 (RETE 11, Domani Motus Liberi 4), Alliance Libera 10 (including Social Democrats Left and Civic 10), Alliance Noi per la Republic 8 (With Social Democrats, Socialist Party, etc.), Alliance Future republics 6 (2019)
Main parties with mandates in the second most recent elections
Adesso.sm (Future Republic, Civico 10, Social Democrats-Left, etc.) 35, San Marino above all (Christian Democrats, Social Democrats, Socialist Party, etc.) 16 (2016)
56% in the 2019 parliamentary elections
parliamentary elections by 2024
- from April 1 to October 1, 2020