The European Central Bank (ECB) and the Banca Centrale della Repubblica di San Marino (the Central Bank of the Republic of San Marino) have agreed to set up a repo line arrangement to provide euro liquidity to financial institutions in the Republic of San Marino to address possible euro liquidity needs in the presence of market dysfunctions due to the COVID-19 shock.
The Central Bank of the Republic of San Marino will be able to borrow up to €100 million from the ECB. The maximum maturity of each drawing will be three months. The repo line will remain in place until the end of June 2021, unless an extension is decided.
“It is the first step towards a San Marino more capable of looking to its future with greater serenity. It’s a result of a non-stop work by the Government and overall by the Central Bank of the Republic of San Marino and its president Catia Tomasetti, whom I thank for her work,” commented Marco Gatti, Ministry of Finance, Budget of the Republic of San Marino.
The EU’s relations with San Marino
The Republic of San Marino is an enclave micro-state surrounded by Italy. It is just over 61 km2 and has an estimated population of around 32 000. The EU and San Marino established diplomatic relations in 1983. Both parties coordinate and exchange information on foreign, security and human rights policies. In 2013, the EU decided that San Marino’s participation in the Single Market would be best served by concluding an Association Agreement. Ideally, such an agreement would also include the two other European micro-states of Andorra and Monaco. In March 2015, the EU hosted a ceremony to launch negotiations on this issue.