Among the dwarf states of Europe, the Principality of Andorra is the largest. Until quite recently, it was an absolute monarchy. It was governed not by one, but two princes, and both are not citizens of Andorra. They don't even live in Andorra. To make the case even more curious, it is not a hereditary monarchy.
Andorra is an old country. It was established in and has been independent since 1278 after a long and costly war between France and Spain. The disputed territory was not valuable in resources or cities. Andorra was strategically placed on major medieval trading and military routes through the Pyrenees Mountains. In a treaty between Spain and France, it was established as a principality with two reigning princes. The Bishop of Seu d’Urgell in Spain and the Count of Foix in France were chosen to represent the interests of their respective country in the governance of the principality. This condominium endured for over 500 years when the French revolutionary government rescinded all contracts signed by the kings of France.
When Napoleon seized power, he reaffirmed all previous contracts and treaties. As the family of Foix had completely perished during the revolution, he assumed the part of the counts himself thereby gathering more power to his office at the same time. Since then, the head of state of France is also Prince of Andorra irrespective of his worldly status as emperor, king, or president (all of which were applicable during the last 200 odd years). François Hollande is therefore at this time head of state for both countries, France and Andorra. The present Bishop of Seu d’Urgell is still his counterpart in this curious contraption.
Andorra got its first written constitution in 1993. Up to that point it had been an absolute monarchy. It was reconstituted as an constitutional monarchy with the two princes in merely representative roles. An exception was made for foreign politics in which both princes have the right to veto any decision by government or parliament. The country uses the Euro without being part of either the European Union or the monetary union behind the Euro.
Andorra is one of those tax havens so deplored by politicians who have milked their own countries dry by lining their pockets and those of their followers. Wolfgang Schaeuble as Minister of Finances in Germany should maybe have a talk with rich and mighty Prince Hollande about Andorra, instead of publicly attacking places where people pay taxes. Andorra doesn't know the word taxes, I think, though a value added tax has come into force some years back at a nominal level. Andorra is most efficiently doing its shady dealings under the protection of both France and Spain with the full approval of the shady politicians on both sides of the Pyrenees Mountains.
The Catholic Church is state religion in Andorra, and Catalan is the national language, though there are large Spanish and French minorities. The main income of the country stems from its banks and from tourism. It is renowned for its skiing with French and Spanish tourists alike. Andorra has no army but relies on Spain and France to protect it instead.