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Nicknamed "The Stateless State" it is some 10 km southwest of Aix-la-Chapelle/Aachen.
Created in 1815 as a result of a dispute between Prussia (later part of Germany) and the United Netherlands - with that geographical section later known as Belgium taking on the claim - as to who would have access to its mines.
Known as Neutral Moresnet, it had few resources other than its mining - at one point it was supplying 50% of Europe's zinc: the mine was, by the late-19th century, becoming worked out. In OTL an attempt to turn Moresnet into a gambling centre to match Monte Carlo (by Belgian casino owners, following anti-gambling legislation in Belgium): in this timeline the casinos were allowed, and, given Moresnet's location (between Belgium, Germany, and the Netherlands) it prospered.
The original inhabitants and their descendants had no formal nationality - but could serve in either of the armies of the two surrounding states - or have legal disputes settled in whichever court suited the participants best.
It was going to be absorbed into Belgium with the Treaty of Versailles, but then the proposal was made to make it the capital of the League of Nations. This was accepted, as was the proposal made in 1906 by Dr Molly, to make Moresnet the first Esperanto speaking entity, and all the rights of the original inhabitants were extended to delegates. (There was thus some interesting International Law created as various different legal systems were coopted to suit particular needs.)
When what was to become the European Union was established, it was natural to have the organisation based in Moresnet, rather than the alternative proposal of a peripatetic centre. Esperanto was adopted as the sole official language - as it reduced translation costs, and prevented complaints about any states dominating the body through the use of language.