HI, I'M RICK STEVES, AND I'M STANDING ATOP OF ONE OF THE TINIEST COUNTRIES IN EUROPE.

EUROPE HAS A HANDFUL OF THESE LITTLE "DON'T BLINK OR YOU'LL MISS 'EM" LANDS.

THERE'S ANDORRA, LIECHTENSTEIN, MONACO, VATICAN CITY, AND SAN MARINO.

WE'RE ABOUT TO VISIT THEM ALL.

THIS TIME, IT'S "LITTLE EUROPE."

THANKS FOR JOINING US.

MEDIEVAL EUROPE WAS A PATCHWORK OF MINISCULE DUKEDOMS, PRINCEDOMS, AND FEUDAL STATES.

MODERN-DAY GERMANY, ABOUT THE SIZE OF MONTANA, WAS FRAGMENTED INTO OVER 300 OF THESE, EACH WITH ITS OWN PETTY RULER, WEIGHTS AND MEASURES, CROWN JEWELS, AND CURFEW.

THESE COUNTRIES WERE ONLY ABOUT AS BIG AS THE DISTANCE A CANNON COULD FIRE FROM THE TOWN WALLS.

AND TODAY, ONLY A HANDFUL OF EUROPE'S MINI-NATIONS SURVIVE.

THE WORLD'S SMALLEST COUNTRY COMES WITH THE PLANET'S BIGGEST CHURCH.

ANOTHER IS FAMOUS FOR ITS CASINO AND CAR RACES.

A STONE'S THROW FROM THE ADRIATIC SEA, THE LAST OF THE INDEPENDENT HILL TOWNS STILL LOOKS PRETTY FORMIDABLE.

THIS CASTLE-GUARDED PRINCIPALITY IS A REMNANT OF EUROPE'S ONCE-MIGHTY HOLY ROMAN EMPIRE.

AND HERE, WHERE SPAIN AND FRANCE MEET, ANOTHER TINY COUNTRY ENTERTAINS SHOPPERS AND HIKERS ALIKE WITH THE RUGGED BEAUTY OF THE PYRENEES.

EUROPE'S MICRO-STATES ARE SCATTERED FAR AND WIDE.

WE'LL START AT VATICAN CITY, DROP BY SAN MARINO, HIKE UP TO LIECHTENSTEIN, SPEED OVER TO MONACO, AND FINISH HIGH IN THE PYRENEES AT ANDORRA.

OUR FIRST COUNTRY IS RULED BY A MAN FROM ANOTHER COUNTRY.

IT HAS LESS THAN 1,000 PERMANENT RESIDENTS, AND ITS BIRTH RATE IS ZERO.

IT'S VISITED BY HORDES OF TOURISTS DAILY, AND IT'S THE CAPITAL OF A HOLY EMPIRE WITH MORE THAN A BILLION SUBJECTS WORLDWIDE.

ANY GUESSES?

THE VATICAN CITY.

THIS IS THE SMALLEST INDEPENDENT COUNTRY ON EARTH.

EVEN THOUGH IT OCCUPIES LESS THAN A SQUARE MILE, THIS COUNTRY HAS ITS OWN RADIO STATION, NEWSPAPER, POST OFFICE, AND A CUTE LITTLE TRAIN STATION.

ALONG WITH THE GRANDEST CHURCH ON EARTH, IT HAS A MASSIVE MUSEUM.

THE VATICAN IS RULED BOTH POLITICALLY AND RELIGIOUSLY BY THE POPE.

VATICAN CITY IS EMBEDDED IN THE CITY OF ROME.

IT'S SURROUNDED BY A MIGHTY MEDIEVAL WALL THAT EVOKES A LESS-THAN-PEACEFUL HISTORY.

AFTER THE ROMAN EMPIRE FELL IN THE 5th CENTURY, THE CITY OF ROME GRADUALLY CAME UNDER CONTROL OF THE POPE.

IN FACT, FOR CENTURIES, THE POPE WAS CALLED "THE KING POPE."

LITTLE BY LITTLE, THE KING POPE BUILT HIS OWN EMPIRE.

AT ITS PEAK, AROUND THE 17th CENTURY, THE PAPAL STATES, AS THEY WERE CALLED, ENCOMPASSED MUCH OF THE ITALIAN PENINSULA.

WHEN THE MODERN NATION OF ITALY WAS UNITED, IT ABSORBED MOST OF THE PAPAL STATES, INCLUDING THE CITY OF ROME.

BUT THE POPE HELD OUT.

FOR 60 YEARS, THE POPE WAS HOLED UP HERE, BEHIND THE VATICAN WALLS.

FINALLY, IN 1929, THE POPE AND MUSSOLINI SIGNED THE LATERAN TREATY, ESTABLISHING THE VATICAN AS ITS OWN NATION.

THE GARDEN-LIKE CORE OF THE COUNTRY, WHERE SERIOUS ADMINISTRATION TAKES PLACE, IS CLOSED TO THE PUBLIC.

THE VATICAN MILITARY IS MADE UP OF THE SWISS GUARD.

IN 1506, THE POPE IMPORTED MERCENARIES FROM SWITZERLAND, WHO WERE KNOWN FOR THEIR LOYALTY AND COURAGE.

TODAY, ABOUT 100 SWISS SOLDIERS STILL PROTECT THE POPE, KEEP THE CRUSH OF TOURISTS AS ORDERLY AS POSSIBLE, AND WEAR THE FLAMBOYANT, RENAISSANCE-STYLE UNIFORM THAT TOURISTS JUST LOVE TO PHOTOGRAPH.

THE VATICAN HAS ITS OWN POSTAL SERVICE.

MANY CONSIDER IT TO BE MORE RELIABLE THAN MAILING THINGS FROM ACROSS THE STREET IN ITALY.

AND VATICAN STAMPS ARE A FUN SOUVENIR.

THE VATICAN IS BUILT ON THE MEMORY AND TOMB OF THE FIRST POPE -- ST. PETER.

PIAZZA SAN PIETRO SITS ON WHAT WAS THE SITE OF A ROMAN RACE TRACK.

IMAGINE CHARIOTS MAKING THEIR HAIRPIN TURNS AROUND THAT OBELISK.

FOR ADDED ENTERTAINMENT DURING THE GAMES, CHRISTIANS WERE EXECUTED HERE.

IN ABOUT 65 A.D., THE APOSTLE PETER WAS CRUCIFIED WITHIN SIGHT OF THIS OBELISK.

HIS FRIENDS BURIED HIM IN A HUMBLE GRAVEYARD, ATOP WHAT PAGAN ROMANS CALLED "THE VATICAN HILL."

FOR ABOUT 250 YEARS, CHRISTIANS WORSHIPPED QUIETLY ON THIS SPOT.

THEN, WHEN EMPEROR CONSTANTINE LEGALIZED CHRISTIANITY IN 313 A.D., A BASILICA WAS BUILT HERE, AND THIS BECAME THE HEAD OF THE ROMAN CATHOLIC CHURCH.

1,200 YEARS LATER, THE ORIGINAL ST. PETER'S WAS REPLACED BY THIS -- THE MOST GLORIOUS CHURCH IN ALL CHRISTENDOM.

UPON ENTERING, YOUR FIRST IMPRESSION IS, "IT'S BIG."

OVER 600 FEET LONG, BATHED IN GLORIOUS SUNBEAMS, IT CAN ACCOMMODATE THOUSANDS OF WORSHIPPERS.

NEAR THE ENTRANCE, MICHELANGELO'S PIETA IS ADORED BY PILGRIMS AND TOURISTS ALIKE.

HERE, THE 25-YEAR-OLD MICHELANGELO INTENDS TO MAKE THE THEOLOGICAL MESSAGE VERY CLEAR -- JESUS, ONCE ALIVE BUT NOW DEAD, GAVE HIS LIFE FOR OUR SALVATION.

THE CONTRAST PROVIDED BY MARY'S ROUGH ROBE MAKES HIS BODY, EVEN CARVED IN HARD MARBLE, SEEMS SOFT AND BELIEVABLE.

THE HIGH ALTAR, LIKE SO MUCH OF THE ART DECORATING THE VATICAN, IS A MASTERPIECE BY THE GREAT BAROQUE ARTIST, BERNINI.

WITH SUNLIGHT ILLUMINATING ITS ALABASTER WINDOW AS IF POWERING THE HOLY SPIRIT, IT ENCRUSTS THE LEGENDARY THRONE OF ST. PETER WITH A STARBURST OF BAROQUE PRAISE.

DIRECTLY ABOVE THE ALTAR WHICH MARKS THE TOMB OF ST. PETER STANDS BERNINI'S BRONZE CANOPY.

AND ABOVE THAT, MICHELANGELO'S DOME, TALLER THAN A FOOTBALL FIELD ON END.

THE INSCRIPTION DECLARES IN LATIN, TU ES PETRUS -- "YOU ARE PETER, AND UPON THIS ROCK, I WILL BUILD MY CHURCH."

THIS IS THE SCRIPTURAL BASIS FOR THE PRIMACY OF ROME IN THE CATHOLIC CHURCH.

A VIEWING PERCH GIVES TRAVELERS A CLOSE-UP LOOK AT THOSE HUGE LETTERS AND A HEAVENLY PERSPECTIVE INTO THE CHURCH.

FROM THE ROOFTOP, YOU CAN SIZE UP THE DOME YOU'RE ABOUT TO CLIMB.

FOR A CLOSE LOOK AT MICHELANGELO'S DOME-WITHIN-A-DOME DESIGN, LEAN IN AS YOU CLIMB 300 STEPS TO THE CUPOLA.

THE VIEW FROM THE TOP IS UNRIVALED, BOTH OF THE CITY OF ROME AND OF THE VATICAN GROUNDS.

YOU CAN SURVEY THE ENTIRE COUNTRY FROM THIS LOFTY PERCH.

THE LONG, RECTANGULAR BUILDING IS THE VATICAN MUSEUM, WITH THE ADJACENT SISTINE CHAPEL.

THESE BUILDINGS AND COURTYARDS DISPLAY SOME OF THE GREATEST ART OF WESTERN CIVILIZATION.

OVER THE CENTURIES, THE POPES HAVE AMASSED ENOUGH ART TO FILL WHAT MANY CONSIDER EUROPE'S RICHEST MUSEUM.

LONG HALLS ARE SUMPTUOUSLY DECORATED WITH PRECIOUS TAPESTRIES, FRESCOED CEILINGS, AND ANCIENT STATUES.

THE MUSEUM FEATURES ART FROM EVERY AGE.

ITS EXQUISITE PAINTING GALLERY INCLUDES RAPHAEL'S MUCH-LOVED PAINTING OF THE TRANSFIGURATION.

HALLS AND COURTYARDS ARE LITTERED WITH ANCIENT GREEK MASTERPIECES, LIKE THE LAOCOON, SO INSPIRATIONAL TO THE GREAT MASTERS OF THE RENAISSANCE.

AND THE POPE'S APARTMENTS TELL CHRISTIAN HISTORY.

THIS IS THE BATTLE IN WHICH EMPEROR CONSTANTINE WAS LED BY ANGELS AND A HOLY CROSS BOTH TO A KEY MILITARY VICTORY AND TO HIS OWN RELIGIOUS CONVERSION.

AND THESE ROOMS CELEBRATE PRE-CHRISTIAN PHILOSOPHY.

HERE, RAPHAEL PAINTS THE SCHOOL OF ATHENS, THE "WHO'S WHO" OF ANCIENT GREEK INTELLECTUAL HEROES -- MANY PAINTED WITH THE FEATURES OF RENAISSANCE GREATS -- LEONARDO, MICHELANGELO, AND A SELF-PORTRAIT OF RAPHAEL, IN THE BLACK CAP.

BUT OF COURSE WE'VE JUST SCRATCHED THE SURFACE.

IF YOU'RE PONDERING ETERNITY, TRY COVERING THE VATICAN MUSEUM THOROUGHLY.

ON THE OPPOSITE SIDE OF THE ITALIAN PENINSULA, JUST A FEW MILES INLAND FROM THE ADRIATIC COAST, IS ANOTHER TINY NATION THAT'S ENTIRELY SURROUNDED BY ITALY -- SAN MARINO.

THE REPUBLIC OF SAN MARINO BRAGS IT'S THE WORLD'S OLDEST AND SMALLEST REPUBLIC.

IT'S REMAINED SOVEREIGN THROUGH ALMOST ALL ITS 1,700-YEAR HISTORY.

SAN MARINO'S ISOLATED LOCATION HAS HELPED IT MAINTAIN ITS INDEPENDENCE.

THE 24-SQUARE-MILE COUNTRY CLINGS BRAVELY TO MONTE TITANO IN ITALY'S RUGGED APENNINE MOUNTAINS.

1,000 YEARS AGO, ITALY WAS MADE UP OF DOZENS OF INDEPENDENT LITTLE STATES LIKE THIS.

OVER THE CENTURIES, VIRTUALLY ALL OF THEM DISAPPEARED FROM THE MAP.

FIRST, EUROPE'S DOMINANT ROYAL FAMILIES SNATCHED UP THESE TINY TERRITORIES AND ADDED THEM TO THEIR VAST KINGDOMS.

THEN, IN THE 19th CENTURY, ITALY'S UNIFICATION MOVEMENT CONSOLIDATED VIRTUALLY THE ENTIRE ITALIAN PENINSULA INTO THE MODERN NATION OF ITALY.

SAN MARINO SURVIVED BECAUSE OF GIUSEPPE GARIBALDI.

A LEADER OF THE ITALIAN UNIFICATION MOVEMENT, GARIBALDI HID FROM HIS ENEMIES HERE IN SAN MARINO.

IN APPRECIATION, GARIBALDI ALLOWED SAN MARINO TO REMAIN INDEPENDENT.

PERCHED ABOVE THE OLD TOWN ARE SAN MARINO'S THREE CHARACTERISTIC CASTLES.

THIS TRIO OF FORTRESSES HAS DONE ITS PART TO KEEP SAN MARINO FREE AND INDEPENDENT OVER THE CENTURIES.

A RIDGETOP TRAIL CONNECTS THE FORTRESSES.

SINCE THE 1960s, TOURISM HAS BROUGHT PROSPERITY, AND ALONG WITH IT, STREETS OF TACKY SHOPS.

ABOUT HALF THE COUNTRY'S ECONOMY IS BASED ON TOURISM.

AS IN OTHER TINY STATES, QUIRKY LAWS AND TAX REGULATIONS ARE USED TO STOKE THE ECONOMY.

AS SALES TAX IS HALF WHAT IT IS IN SURROUNDING ITALY, SHOPPERS HAVE LONG COME HERE FOR THE SAVINGS.

SEVERAL OF EUROPE'S TINY COUNTRIES PRODUCE THEIR OWN STAMPS AND COINS, MUCH SOUGHT AFTER BY COLLECTORS.

BUONGIORNO.

A STAMP FOR MY PASSPORT, PLEASE?

Steves: AND FOR A FEE, THEY'LL EVEN STAMP YOUR PASSPORT.

THE TOWN'S FOCAL POINT IS THE LONG, BALCONY-LIKE PIAZZA DELLA LIBERTA, WITH SWEEPING VIEWS OVER THE REALM.

THE STATUE DEPICTING LIBERTY WEARING A CROWN WITH THE THREE CASTLE TOWERS CELEBRATES THIS COUNTRY'S PASSION FOR INDEPENDENCE AND DEMOCRACY.

THE PALAZZO PUBBLICO, OR "PALACE OF THE PEOPLE," IS GUARDED BY SOME OF SAN MARINO'S TINY SECURITY FORCE, IN THEIR DISTINCTIVE UNIFORMS.

A MODEST STAIRWAY LEADS TO THE ROOM FROM WHERE THE COUNTRY IS GOVERNED.

PAINTINGS REMIND LEGISLATORS OF ITS LONG HISTORY AND THE SAINT WHO IS CONSIDERED THE FATHER OF THIS LITTLE NATION.

IN ABOUT THE YEAR 300, MARINO, A STONECUTTER FROM PRESENT-DAY CROATIA, FLED PERSECUTION FROM THE ROMAN EMPEROR.

HE FOUND REFUGE HERE, ON MONTE TITANO, AND DECIDED TO STAY AND HELP A COMMUNITY OF OTHER FLEEING CHRISTIANS.

HE WAS MADE A SAINT FOR HIS EFFORTS AND REMAINS THE PATRON SAINT OF THIS COUNTRY TO THIS DAY.

FROM THIS LOFTY PERCH, SAN MARINO'S SOLDIERS HAVE DEFENDED THEIR HOMELAND WITH THE LATEST IN MILITARY TECHNOLOGY.

EVER SINCE A KEY VICTORY BACK IN THE 15th CENTURY, THE CROSSBOWMEN OF SAN MARINO HAVE BEEN A PART OF STATE CELEBRATIONS.

TRADITIONALLY, THIS FORCED THE MARKSMEN TO STAY SHARP AND KEEP THEIR CROSSBOWS IN GOOD WORKING ORDER.

WHILE TODAY IT'S MOSTLY AN EXCUSE TO SHOW OFF FOR TOURISTS, THEIR SPORT IS STILL TAKEN SERIOUSLY.

THE MARKSMEN HIT THEIR TARGET WITH ARMOR-PIERCING FORCE, ILLUSTRATING THE PRIDE OF A NATION WITH A LONG, IF NOT MIGHTY, HERITAGE.

AS IF CELEBRATING THEIR BULL'S EYES, THE SAN MARINO CROSSBOWMEN FEDERATION ENLIVENS THEIR MOUNTAINTOP REPUBLIC WITH TRADITIONAL FANFARE.

[ DRUMS PLAYING ] [ BRASS FANFARE PLAYING ] SAN MARINO TAKES YOU BACK TO THE AGE OF CITY-STATES, AN ERA OF PAGEANTRY, PRIDE, AND FIERCE INDEPENDENCE.

FURTHER NORTH LIES ANOTHER PINT-SIZED COUNTRY THAT'S TUCKED AWAY, NOT ON A HILL, BUT IN THE MIGHTY ALPS.

TWO CENTURIES AGO, THERE WERE DOZENS OF INDEPENDENT STATES IN GERMAN-SPEAKING EUROPE.

TODAY, THERE ARE ONLY FOUR -- GERMANY, AUSTRIA, SWITZERLAND, AND LIECHTENSTEIN.

NESTLED BETWEEN SWITZERLAND AND AUSTRIA, THE PRINCIPALITY OF LIECHTENSTEIN IS DEFINED BY THE MIGHTY ALPS TO THE EAST, THE BABY RHEIN RIVER TO THE WEST, AND A STOUT FORTRESS PROTECTING THE MOUTH OF ITS VALLEY TO THE SOUTH.

THIS QUIRKY REMNANT OF MEDIEVAL FEUDAL POLITICS IS JUST ABOUT 62 SQUARE MILES.

IT'S TRULY LANDLOCKED, WITHOUT A SEA PORT OR EVEN AN AIRPORT.

LIECHTENSTEINERS, WHO NUMBER ABOUT 35,000, SPEAK GERMAN, ARE MOSTLY CATHOLIC, AND HAVE A STUBBORN INDEPENDENT STREAK.

WOMEN WEREN'T GIVEN THE VOTE UNTIL 1984.

THE COUNTRY IS MADE UP OF 11 VILLAGES.

THE VILLAGE OF TRIESENBERG, HIGH ABOVE THE VALLEY, GATHERS AROUND ITS ONION-DOMED CHURCH, WHICH RECALLS THE SETTLERS WHO ARRIVED HERE CENTURIES AGO FROM THE WESTERN PART OF SWITZERLAND.

THE TOWN OF VADUZ SITS ON THE VALLEY FLOOR.

WHILE IT HAS ONLY 5,000 PEOPLE, IT'S THE COUNTRY'S CAPITAL.

ITS PEDESTRIANIZED MAIN DRAG IS LINED WITH MODERN ART AND HOTELS, BORDERING A DISTRICT OF SLICK OFFICE PARKS.

HISTORICALLY, EUROPE'S TINY COUNTRIES HAVE OFFERED BUSINESSES SPECIAL TAX AND ACCOUNTING INCENTIVES.

FOR A PLACE WITH SUCH A SMALL POPULATION, LIECHTENSTEIN HAS A LOT OF BUSINESSES.

MANY EUROPEAN COUNTRIES LOCATE HERE TO TAKE ADVANTAGE OF ITS LOW TAXES.

AND THAT'S HOW THE PRINCE OF LIECHTENSTEIN, WHOSE CASTLE IS PERCHED ABOVE HIS DOMAIN, LIKES IT.

THE BILLIONAIRE PRINCE, WHO LOOKS DOWN ON HIS 6x12-MILE COUNTRY, WIELDS MORE REAL POLITICAL POWER IN HIS REALM THAN ANY OTHER EUROPEAN ROYALTY.

THE NATIONAL MUSEUM TELLS THE STORY OF THE PRINCE AND HIS COUNTRY.

THEIR FAMILY CREST DATES TO THE MIDDLE AGES, WHEN THE LIECHTENSTEIN FAMILY WAS CLOSE FRIENDS WITH THE HABSBURG FAMILY, WHO RULED THE HOLY ROMAN EMPIRE.

THE LIECHTENSTEIN FAMILY PURCHASED THIS PIECE OF REAL ESTATE FROM THE HOLY ROMAN EMPEROR.

IN 1719, THE DOMAIN WAS GRANTED PRINCIPALITY STATUS, ANSWERING ONLY TO THE EMPEROR.

THE LIECHTENSTEIN PRINCES, WHO LIVED NEAR VIENNA, SAW THEIR NEW COUNTRY MERELY AS A STATUS SYMBOL AND DIDN'T EVEN BOTHER TO VISIT FOR DECADES.

IN FACT, IT WASN'T UNTIL THE 20th CENTURY THAT THE FIRST LIECHTENSTEIN PRINCE ACTUALLY LIVED HERE.

IN 1806, DURING THE NAPOLEONIC AGE, LIECHTENSTEIN'S OBLIGATIONS TO THE HABSBURG EMPEROR DISAPPEARED, AND THE COUNTRY WAS GRANTED TRUE INDEPENDENCE.

LATER, AFTER WORLD WAR I, TOUGH TIMES FORCED THE PRINCIPALITY TO ENTER INTO AN ECONOMIC UNION WITH SWITZERLAND.

TO THIS DAY, LIECHTENSTEIN ENJOYS A CLOSE WORKING RELATIONSHIP WITH ITS SWISS NEIGHBORS.

AND, LIKE SWITZERLAND, A BIG PART OF ITS MODERN ECONOMY IS TOURISM AND SPORTS, HOSTING VISITORS ENJOYING ITS DRAMATIC NATURAL BEAUTY.

SKI LIFTS, BUSY BOTH WINTER AND SUMMER, TAKE NATURE LOVERS TO THE DIZZYING RIDGE THAT SERVES AS THE BORDER WITH AUSTRIA.

EVEN IN LITTLE, LITTLE LIECHTENSTEIN, THE VIEWS ARE BIG.

AND THE HIKING POSSIBILITIES GO ON AND ON.

ON THE MEDITERRANEAN SEA, BASKING BETWEEN THE FRENCH AND ITALIAN RIVIERAS, THE PRINCIPALITY OF MONACO BARELY FITS ON ITS ONE SQUARE MILE OF TERRITORY.

OF ITS 30,000 RESIDENTS, LESS THAN 10,000 ARE TRUE MONEGASQUES, AS LOCALS ARE CALLED.

MANY OF THE REST CALL MONACO HOME BECAUSE THERE'S NO INCOME TAX.

DESPITE OVERDEVELOPMENT, HIGH PRICES, AND MOBS OF TOURISTS, A VISIT HERE IS A RIVIERA MUST.

AND MONACO IS A WORK IN PROGRESS.

THE DISTRICT OF FONTVIEILLE WAS RECLAIMED FROM THE SEA.

IT BRISTLES WITH LUXURY HIGH-RISE CONDOS.

THE BREAKWATER -- CONSTRUCTED ELSEWHERE AND TOWED IN -- ENABLES CRUISE SHIPS TO DOCK.

AND CARS STILL RACE, AS THEY HAVE SINCE 1929, AROUND THE PRINCIPALITY IN ONE OF THE WORLD'S MOST FAMOUS AUTO RACES -- THE GRAND PRIX OF MONACO.

THE MINISCULE PRINCIPALITY HAS ALWAYS BEEN TINY, BUT IT USED TO BE LESS TINY.

IN THE 1860s, IT LOST MOST OF ITS TERRITORY TO FRANCE.

BUT THE PRINCE BUILT A CASINO AND MANAGED TO CONNECT HIS DOMAIN TO THE REST OF THE RIVIERA WITH A NEW ROAD AND A TRAIN LINE.

HUMBLE MONACO WAS SUDDENLY ON THE GRAND TOUR MAP -- THE PLACE FOR THE VACATIONING ARISTOCRACY TO PLAY.

TODAY, THE PEOPLE OF MONACO HAVE ONE OF THE WORLD'S HIGHEST PER-CAPITA INCOMES, WITH PLUSH APARTMENTS TO MATCH.

ITS FAMOUS CASINO ALLOWS THE WEALTHY TO ENJOY LOSING MONEY IN EXTREME COMFORT.

IF MONACO IS A BUSINESS, THE PRINCE IS ITS CEO.

WHILE THE CASINO GENERATES ONLY A SMALL PART OF THE STATE'S REVENUE, ITS MANY BANKS, WHICH PROVIDE AN ATTRACTIVE WAY TO PROTECT YOUR MONEY FROM THE TAX MAN, EARN MUCH MORE.

THERE IS NO INCOME TAX HERE, BUT THE PRINCE COLLECTS PLENTY OF MONEY IN VALUE-ADDED TAXES, REAL ESTATE TAXES, AND CORPORATE TAXES.

NEARLY ALL OF MONACO'S SIGHTS ARE PACKED IN A CINDERELLA NEIGHBORHOOD ATOP ITS FORTIFIED HILL.

ITS IMPRESSIVE AQUARIUM, WHICH PROUDLY CROWNS THE CLIFF LIKE A PALACE, WAS DIRECTED BY JACQUES COUSTEAU FOR 17 YEARS.

A MEDIEVAL CASTLE SAT WHERE MONACO'S PALACE SITS TODAY.

THE PALACE SQUARE FEATURES A STATUE OF FRANçOIS GRIMALDI, A RENEGADE ITALIAN WHO CAPTURED MONACO DISGUISED AS A MONK IN 1297.

THIS FIRST RULER OF MONACO ESTABLISHED THE DYNASTY THAT STILL RULES THE PRINCIPALITY.

TODAY, OVER 700 YEARS LATER, THE CURRENT PRINCE IS HIS DIRECT DESCENDANT.

PALACE GUARDS PROTECT THE RULING GRIMALDI FAMILY 24/7.

AND THEY CHANGE WITH THE PAGEANTRY OF AN IMPORTANT NATION.

EVERY DAY AT ABOUT NOON, TOURISTS PACK THE SQUARE TO WITNESS THE SPECTACLE IN THIS IMPROBABLE LITTLE PRINCEDOM.

[ BAND PLAYING MARCH ] OUR FINAL STOP IS ANDORRA, THE BIGGEST OF THESE MIDGET COUNTRIES.

IF YOU'RE KEEPING TRACK, HERE'S A RUNDOWN ON EUROPE'S TINY DERBY, SHOWING EACH OF THESE COUNTRIES' RELATIVE SIZE.

THE VATICAN IS THE BIG LITTLE WINNER.

THEN COMES MONACO, SAN MARINO, LIECHTENSTEIN, AND FINALLY ANDORRA.

LUXEMBOURG IS EUROPE'S NEXT-SMALLEST COUNTRY.

SMALL AS IT IS, IT WOULD EASILY FIT ALL FIVE MICRO-STATES WITHIN ITS BORDERS.

ANDORRA SITS HIGH IN THE CRAGGY PYRENEES MOUNTAINS, AS IF HIDING OUT BETWEEN SPAIN AND FRANCE.

WITH 180 SQUARE MILES AND ABOUT 75,000 PEOPLE, IT'S THE LARGEST OF EUROPE'S MICRO-COUNTRIES.

THE COUNTRY HAS A LONG HISTORY.

IN THEIR NATIONAL ANTHEM, ANDORRANS SING OF CHARLEMAGNE RESCUING THEIR LAND FROM THE MOORS, BACK IN 803.

IN THE 13th CENTURY, SPANISH AND FRENCH NOBLES MARRIED.

THEY AGREED THAT THE PRINCIPALITY WOULD BE NEITHER SPANISH NOR FRENCH.

THIS UNIQUE FEUDAL ARRANGEMENT SURVIVES TODAY.

AND WHILE THEY HAVE CO-PRINCES -- ONE HAPPENS TO BE THE PRESIDENT OF FRANCE AND THE OTHER, A BISHOP IN SPAIN -- LOCALS STRESS THAT THEIR LAND IS 100% INDEPENDENT.

UNTIL LITTLE MORE THAN A GENERATION AGO, ANDORRA WAS AN IMPOVERISHED AND ISOLATED BACKWATER.

CHURCHES DATE BACK TO THE 12th AND 13th CENTURIES.

THEIR STONY, ROMANESQUE BELL TOWERS STAND STRONG AS THE SURROUNDING PYRENEES.

THAT SAME LOCAL STONE IS USED TODAY AS A BUILDING BOOM ILLUSTRATES HOW, LATELY, THE PRINCIPALITY HAS FLOURISHED.

SINCE WORLD WAR II, THE POPULATION HAS INCREASED TENFOLD.

RECENTLY, ANDORRANS HAVE BECOME QUITE WEALTHY.

THE MOUNTAINS THAT KEPT THE PRINCIPALITY BOTH ISOLATED AND POOR ARE NOW A SOURCE OF ITS PROSPERITY.

HIKING AND SKIING ARE UNDERSTANDABLY BIG BUSINESS HERE.

AND ANDORRA EMPLOYS THOSE SPECIAL ECONOMIC WEAPONS SO POPULAR AMONG EUROPE'S LITTLE STATES -- EASYGOING BANKING, DUTY-FREE SHOPPING, AND LOW, LOW TAXES.

IT'S MORPHED FROM A ROUGH-AND-TUMBLE SMUGGLERS' HAVEN TO A HIGH-TECH, HIGH-ALTITUDE SHOPPERS' HAVEN, FAMOUS FOR ITS LOW PRICES.

WHILE ANDORRANS SPEAK CATALAN AND HAVE AN AFFINITY FOR THE SPANISH REGION OF CATALUNYA AND BARCELONA, THE COMMERCIAL ENVIRONMENT HERE IS INTERNATIONAL AS CAN BE.

THE COUNTRY'S CAPITAL AND DOMINANT CITY, ANDORRA LA VELLA, IS A MOSTLY MODERN TOWN WITH THE CHARM OF A GIANT SHOPPING MALL.

WHILE MOST KNOW THIS PLACE FOR ITS SHOPS AND FOR WHAT LOCALS CLAIM IS THE BIGGEST SPA IN EUROPE, POCKETS OF OLD-WORLD CHARM DO HIDE OUT IN THE OLD CENTER.

THE CASA DE LA VALL IS THE COUNTRY'S PARLIAMENT BUILDING.

A PRIVATE RESIDENCE BACK IN THE 16th CENTURY, TODAY IT HOUSES ANDORRA'S CLAUSTROPHOBIC PARLIAMENT CHAMBER.

IT HAS 28 SEATS -- THAT'S FOUR REPRESENTATIVES FOR EACH OF THE SEVEN PARISHES -- WITH PORTRAITS OF THE CURRENT CO-PRINCES ON THE WALL.

WHILE A HUMBLE REMINDER OF A SIMPLE PAST, ANDORRANS STILL LOOK TO THIS BUILDING FOR LEADERSHIP, AS THEIR COUNTRY BUILDS AN EVER-BETTER LIFE FOR ITS CITIZENS.

SO WHAT DO ANDORRA AND THE REST OF EUROPE'S LITTLE COUNTRIES HAVE IN COMMON?

MOST OF THEM ARE HIGH IN THE MOUNTAINS OR SOME OTHER HARD-TO-REACH TERRAIN.

MANY OFFER LOW OR NO TAXES, WHICH ENCOURAGE BUSINESSES AND INDIVIDUALS FROM OTHER COUNTRIES TO COME AND SUPPORT THE LOCAL ECONOMY.

EACH ONE HAS SURVIVED CENTURIES OF WARFARE, TREATIES, AND RESHAPED BORDERS, USUALLY THANKS TO A COMBINATION OF DIPLOMATIC SKILL AND LUCK.

ALL OF THEM GET BY ON THE COATTAILS OF LARGER NATIONS, AND THEY'RE SMALL AND EASY TO OVERLOOK, SO THEY CAN FALL THROUGH THE CRACKS WITHOUT BEING NOTICED BY THE NEXT BIG TYRANT.

MOST IMPORTANT, ALL OF THEM ARE SUSTAINED BY AN UNWAVERING NATIONAL PRIDE IN THEIR UNLIKELY, YET ENDURING, INDEPENDENCE.

THANKS FOR JOINING US.

I'M RICK STEVES.

UNTIL NEXT TIME, KEEP ON TRAVELING.