According to tradition, San Marino was founded in AD 301 when a Christian stonemason named Marinus the Dalmatian fled to the island of Arbe to escape the anti-Christian Roman Emperor Diocletian. Marinus hid on the peak of Mount Titano and founded a small community of people following their Christian beliefs. It is certain that the area had been inhabited since prehistoric times, although evidence of existence on Mount Titano only dates back to the Middle Ages. In memory of the stonecutter, the land was renamed "Land of San Marino," and was finally changed to its present-day name, "Republic of San Marino."
The original government structure was composed of a self-governed assembly known as the Arengo, which consisted of the heads of each family. In 1243, the positions of Captains Regent (Capitani Reggenti) were established to be the joint heads of state.
The land area of San Marino consisted only of Mount Titano until 1463, at which time the republic entered into an alliance against Sigismondo Pandolfo Malatesta, Lord of Rimini, who was later defeated. As a result, Pope Pius II Piccolomini gave San Marino the towns of Fiorentino, Montegiardino, and Serravalle. Later that year, the town of Faetano joined the republic on its own accord. Since then, the size of San Marino has remained unchanged.
San Marino has been occupied by foreign militaries twice in its history, both for only short periods of time. In 1503, Cesare Borgia, known as Valentino, occupied the republic until his death several months later. In 1739, Cardinal Alberoni used military force to occupy the country, but civil disobedience was used to protest this, and clandestine notes sent to the Pope to obtain justice were answered by the Pope's recognition of San Marino's rights and restoration of San Marinos independence.
San Marino is a multi-party democratic republic. The three main parties are the Democratic Christian Party of San Marino (PDCS), the Socialist Party of San Marino (PSS), and the Progressive Democratic Party of San Marino (PPDS) in addition to several other smaller parties. Due to the small size of San Marino and its low population, it is difficult for any party to gain a pure majority and most of the time the government is run by a coalition. Following a period of political instability after the June 2001 elections, in December 2003 the three largest parties formed a coalition government with a view to reforming the electoral law and subsequently calling for early elections.
Because tourism accounts for more than 50% of the economic sector, the government relies not only on taxes and customs for revenue, but also the sale of coins and postage stamps to collectors throughout the world. In addition, the Italian Government pays San Marino an annual budget subsidy provided under the terms of the Basic Treaty with Italy. In recent years banking has also become an important economic activity.
Harmonization of statutes and policies with the European Union (EU) is a major domestic and foreign policy priority of the republic. Another priority issue will be to increase the transparency and efficiency in parliament and in relations among parliament, cabinet, and the Captains Regent.
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