Since 1862, various treaties of friendship and co-operation have been signed with Italy. San Marino has no armed forces, and the police are hired from Italy. The state has its own legal system. Legislative power is vested in an elected council of 60 members residing over nine 'castles' - the nine original parishes. A left-wing coalition governs, dominated by the Christian Democrats.
Agriculture is based on livestock, wheat and grapes.
The main export is wine, while other exports include building stone, ceramics, textiles and furniture. Sales of postage stamps contribute 10 per cent of the national income. San Marino has close economic ties with Italy. In return for rules on foreign exchange and for no customs restrictions at its borders, San Marino receives annual subsidies from the Italian government.