MADRID (Bloomberg) — For six decades, Andorra prospered by catering to skiers, smokers and wealthy people trying to avoid taxes. With those revenues drying up, the mountain principality between France and Spain is now putting itself up for sale. The government is opening up investment in resorts and other businesses to foreigners for the first time in seven centuries to plug a budget deficit that was financed by loans from Andorra's five commercial banks until rising defaults curbed lending.

"Everyone's talking of the global crisis, but this is purely an Andorran crisis," said Jean-Christophe Queyroux, general manager at Pyrenees SA, Andorra's largest retailer. "We've been living very expensive lives, had the best of everything, and now it's time to pay the bills."

Andorra's 83,000 people occupy a Pyrenees mountains region that's less than a fifth of the size of Rhode Island. They rely on revenue from about 10 million visitors a year for more than two-thirds of their $4.1 billion economy, less than half the size of Malta's, the smallest state in the European Union. As tourist numbers dwindle and clients pull money from Andorra's banks amid tax-evasion probes by the US and other governments, the state is facing its first recession in at least half a century, said Albert Pintat, Andorra's prime minister.

Along with Monaco and Liechtenstein, the country is classified as one of three global "uncooperative tax havens" by the Paris-based Organisation for Economic Cooperation and Development.