Monaco

I

Introduction

Monaco, small independent principality of Europe, forming an enclave in south-eastern France, bordered on the south by the Mediterranean Sea and surrounded on the north, east, and west by the French department of Alpes-Maritimes. The principality, which lies east of Nice, is famed as an upmarket resort and home of celebrity tax exiles. The country is 2 sq km (0.75 sq mi) in area.

II

Population

Monaco has a population of 32,671 (2007 estimate), and the highest population density of any independent state: 16,336 people per sq km (42,309 per sq mi) in 2007. Life expectancy for men is 76 years, for women, 84 years. The principality comprises a continuous urban area divided into four districts: Monaco-Ville, the capital and former fortress area, which contains the cathedral, the royal and government palaces, and an oceanographic museum established in 1910 by Prince Albert I; La Condamine, the main port area; Fontvieille, a light industrial zone; and Monte Carlo, with its famous casino, which contains a theatre, home to the Monte-Carlo Opera and Monte-Carlo Philharmonic Orchestra.

Less than one fifth of Monaco’s residents are native-born, or Monégasque; most of the residents are French, with sizeable Italian, American, and British communities. Monaco is 95 per cent Roman Catholic. French is the official language, spoken by around half the population as a mother tongue. Ligurian (particularly the Genoese and Monégasque dialects, the latter of which is taught in schools) is a first language for some 5,100 people in Monaco. An Italian language, it is actually closer to French, Piemontese, and Lombard than to Standard Italian. Provençal, a French regional language, has 4,500 native speakers in Monaco. The University of Southern Europe (Monaco Business School) (1986) has been established in the country.

III

Economy

Monaco’s gross national product (GNP) and gross domestic product (GDP) figures are incorporated with those of France, but the economy is heavily dependent on service industries, in particular tourism, and on the banking and finance sector. Tourism generates more than 25 per cent of national income. More than 230,000 visitors stay longer than one night; millions more are daytrippers. There were over 4 million visitors to Monaco in 1992. The financial services sector was developed under Prince Rainier’s rule as part of deliberate efforts to diversify the economy. Companies, like individual tax exiles, have been attracted by the minimal rates of direct taxation (there is no income tax) and strict banking secrecy. In early 2002, Monaco refused to sign up to an Organization for Economic Cooperation and Development (OECD) agreement on tax evasion, which would have compelled the country to share information about potential tax evasion and make transparent its own banking arrangements. In 1999 Monaco had a GDP of US$870 million, equivalent to a per capita income of US$27,000. Living standards are among the highest in the world; they can be compared with those in prosperous French cities.

Light industry has also been developed since the end of World War II. The manufacture of pharmaceuticals, chemicals, electronic equipment, cosmetics, paper and cards, clothing and textiles, and plastic goods are all of economic significance. In 2002 the size of Monaco’s port was doubled by the arrival of a new floating dock—the world’s largest at 350 m (1,150 ft). Other major sources of revenue are the four great gambling casinos, especially the world-famous Monte Carlo casino, which was taken over by the principality in 1967, and postage stamps. The economy of Monaco relies heavily on migrant labour, mainly from France and Italy.

A

Currency and Banking

The monetary unit of Monaco was formerly the French franc of 100 centimes but in line with other European countries, Monaco adopted the Euro on January 1, 2002. As at early 2007, 0.77 Euros equalled US$1. There are 45 banks established in the principality.