About the CBI
October 2005
Background Note: Monaco

Flag of Monaco is two equal horizontal bands of red (top) and white.

PROFILE

OFFICIAL NAME:
Principality of Monaco

Geography
Area: 1.95 sq. km. (0.8 sq. mi); about the size of New York City's Central
Park.
City: Capital--Monaco, pop. 32,409 (July 2005 est.).
Terrain: Hilly.
Climate: Mediterranean.

People
Nationality: Noun and adjective--Monegasque.
Population: 32,409 (July 2005 est.).
Annual growth rate (2005 est.): 0.43%.
Ethnic groups (2003): French 31.95%, Italian 20.02%, Monegasque 19.02%,
British 5.32%, Swiss 2.78%, German 2.54%, Belgian 2.46%, American 1.22%, and
other 14.7%.
Religions: Roman Catholic 90%, other 10%.
Languages: French (official), English, Italian, and Monegasque (a blend of
French and Italian).
Education: Years compulsory--10, ages 6-16. Attendance--99%. Literacy--99%.
Health (2005 est.): Infant mortality--5.43/1,000. Life expectancy--75.7 yrs.
male; 83.63 yrs. female. Birth rate (July 2005 est.)--9.26 births/1,000
population. Death rate (July 2005 est.)--12.71 deaths/1,000 population.
Work force (2003, 41,708): Private sector--37,949. Public sector--3,759.
Services--83.5%. Banking--23.43%. Tourism and hotel--11.64%. Retail--4.92%.
Construction and public works--32.02%. Industry--6.98%.

Government
Type: Constitutional monarchy.
Constitution: December 17, 1962 (amended in April 2002).
Branches: Executive--Prince Albert II (chief of state). Legislative--National
Council (24 members). Judicial--Court of First Instance, Court of Appeal,
High Court of Appeal, Criminal Court, Supreme Court.
Subdivisions: Four quarters (quartiers)--Monaco-Ville, La Condamine,
Monte-Carlo, Fontvieille.
Political parties: Union pour Monaco (UPM), National and Democratic Union
(UND), Parti Monégasque (PM).
Suffrage: Universal adult at age 18.

Economy
GDP: Monaco does not publish economic figures such as gross domestic product,
though estimates placed purchasing power parity GDP at $870 million in 2000.
Avg. annual growth rate (2003 est.): 1.89%.
Per capita purchasing power parity GDP (2000 est.): $27,000.
Agriculture: None.
Industry: Types--tourism, construction, chemicals, food products, plastics,
precision instruments, cosmetics, ceramics.
Trade: Imports (2003)--about $513 million (416,348,096 euros). Exports (2003)
--about $644 million (522,976,329 euros).
Currency: Monaco, along with France and the other 11 members of the European
Monetary Union (EMU), adopted the euro as its official currency on January 1,
2002. As in other EMU states, Euros minted in Monaco have special Monegasque
features on one side of the coin.

GEOGRAPHY
The Principality of Monaco is the second-smallest independent state in the
world, after the Holy See (Vatican City). It is located on the Mediterranean
coast, 18 kilometers (11 mi.) east of Nice, France, and is surrounded on
three sides by France. Monaco is divided into four sections: Monaco-Ville,
the old city on a rocky promontory extending into the Mediterranean; La
Condamine, the section along the port; Monte-Carlo, the principal residential
and resort area; and Fontvieille, a newly constructed area reclaimed from the
sea.

The principality is noted for its beautiful natural scenery and mild, sunny
climate. The average minimum temperature in January and February is 8oC
(47oF); in July and August the average maximum temperature is 26oC (78oF).

PEOPLE
In July 2005, Monaco's population was estimated at 32,409, with an estimated
average growth rate of 0.43%.

French is the official language; English, Italian, and Monegasque (a blend of
French and Italian) also are spoken. The literacy rate is 99%. Roman
Catholicism is the official religion, with freedom of other religions
guaranteed by the constitution.

HISTORY
Founded in 1215 as a colony of Genoa, Monaco has been ruled by the House of
Grimaldi since 1297, except when under French control from 1789 to 1814.
Designated as a protectorate of Sardinia from 1815 until 1860 by the Treaty
of Vienna, Monaco's sovereignty was recognized by the Franco-Monegasque
Treaty of 1861. The Prince of Monaco was an absolute ruler until a
constitution was promulgated in 1911.

In July 1918, a treaty was signed providing for limited French protection
over Monaco. The treaty, formally noted in the Treaty of Versailles,
established that Monegasque policy would be aligned with French political,
military, and economic interests.

A new constitution, proclaimed in 1962, abolished capital punishment,
provided for female suffrage, and established a Supreme Court to guarantee
fundamental liberties.

In 1993, Monaco became an official member of the United Nations with full
voting rights. It joined the Council of Europe in 2004.

Three months after the death of his father, Prince Rainier III, on April 6,
Prince Albert II formally acceded to the throne on July 12, 2005.

GOVERNMENT AND POLITICAL CONDITIONS
Monaco has been governed as a constitutional monarchy since 1911, with the
Prince as chief of state. The executive branch consists of a Minister of
State (head of government), who presides over a five-member Council of
Government (cabinet). The Minister of State, who is a French citizen
appointed by the Prince for a 3-year term from among several senior French
civil servants proposed by the French Government, is responsible for foreign
relations. As the Prince's representative, the Minister of State also directs
the executive services, commands the police, and presides (with voting
powers) over the Council of Government. The five members of the Council are
respectively responsible for internal affairs, external affairs, the
environment, finance and economy, and social affairs and health.

Under the 1962 constitution, the Prince shares his power with the unicameral
National Council. Sixteen of the 24 members of this legislative body are
elected by list majority system, and 8 by proportional representation to
serve 5-year terms. The elections were last held on February 9, 2003, and
will be held next in February 2008. If the Prince dissolves the National
Council, new elections must be held within 3 months. Usually meeting twice
annually, the Council votes on the budget and endorses laws proposed by the
Prince.

Ordinances passed by the National Council are debated in the Council of
Government, as are the ministerial decrees signed by the Minister of State.
Once approved, the ordinances must be submitted to the Prince within 80 days
for his signature, which makes them legally enforceable. If he does not
express opposition within 10 days of submission, they become valid.

Judicial power is invested in the Prince, who delegates judicial procedures
to the various courts, which dispense justice in his name. The independence
of the judges is guaranteed by the constitution. The Supreme Court is
composed of five chief members and two assistant judges named by the Prince
on the basis of nominations by the National Council and other government
bodies. The Supreme Court is the highest court for judicial appeals and also
interprets the constitution when necessary. Monaco's legal system, closely
related to that of France, is patterned after the Napoleonic Code.

The principality's local affairs (the administration of the four quarters of
Monaco-Ville, La Condamine, Monte Carlo, and Fontvieille) are directed by the
Communal Council, which consists of 15 elected members and is presided over
by the Mayor.

Principal Government Officials
Chief of State--Prince Albert II, Crown Prince
Minister of State--Jean-Paul Proust

Council of Government
Interior--Philippe Deslandes
Exterior--Rainier Imperti
Finance and Economic Affairs--Franck Biancheri
Social Affairs and Health--Denis Ravera
Environment, Equipment and Urbanism--Giles Tonelli

National Council President--Stephane Valeri
President of Supreme Court--Roland Drago
Director of Judicial Services--Alain Guillou

ECONOMY
Monaco, located on the Mediterranean coast, has an economy primarily geared
toward finance, commerce, and tourism. Low taxes have drawn many foreign
companies to Monaco; the companies' production accounts for around 50% of the
593 million annual government income (2002). The enterprises pay a 33.33%
tax only if more than 25% of their revenue is generated abroad. Ever since
Monaco's famed casino opened in 1856, the tourism industry has been booming.
It currently accounts for close to 25% of the annual revenue.

Customs, postal services, telecommunications, and banking in Monaco are
governed by an economic and customs union with France. The official currency
is the euro.

Though official economic statistics are not published, 2000 estimates placed
the national product at $870 million and the per capita income at $27,000.
Monaco does not publish the figures for unemployment, but in 1998 the rate
was estimated to be at 3.1%.

Monaco is noted for its activity in the field of marine sciences. Its
Oceanographic Museum, formerly directed by Jacques Cousteau, is one of the
most renowned institutions of its kind in the world. Monaco imports and
exports products and services from all over the world. There is no commercial
agriculture in Monaco.

FOREIGN RELATIONS
Monaco actively participates in the United Nations, which it joined in 1993.
Monaco joined the Council of Europe on October 4, 2004. Monaco also is a
member of many international and intergovernmental organizations, including
Interpol, the UN Educational, Scientific, and Cultural Organization (UNESCO),
and the World Health Organization (WHO). The International Hydrographic
Bureau (IHB) is headquartered in Monaco.

The Principality of Monaco is a sovereign and independent state, linked
closely to France by the Treaty of July 1918, which was formally noted in
Article 436 of the Treaty of Versailles of 1919. The foreign policy of Monaco
is one illustration of this accord: France has agreed to defend the
independence and sovereignty of Monaco, while the Monegasque Government has
agreed to exercise its sovereign rights in conformity with French interests.
Since then, the relations between the sovereign states of France and Monaco
have been further defined in the Treaty of 1945 and the Agreement of 1963.

In 2002, Monaco renegotiated its 1918 treaty with France. The revised treaty
has not yet been ratified by the French Senate and entered into force. The
terms of the new treaty would:

* Upgrade France's representation in Monaco from Consulate General to that
of an embassy;
* Permit, for the first time, other countries to accredit ambassadors to
Monaco; and
* Formally recognize the succession scheme set out in the 1962
Constitution, which extends eligibility to the Prince's daughters and
other family members.

Although not a member of the European Union (EU), Monaco is closely
associated with the economic apparatus of the EU through its customs union
with France and its reliance upon the euro as its official currency.

Monaco has 10 diplomatic missions in Western Europe and permanent
representation at the United Nations and the Council of Europe. It maintains
honorary consulates in 106 cities in 45 countries. Seventy-four countries
have consulates general, consulates, or honorary consulates in or accredited
to Monaco.

U.S.-MONACO RELATIONS
The United States and Monaco enjoy excellent relations, which both countries
seek to maintain and strengthen. From 1956 until her death in 1982, the
American-born Grace Kelly was married to Prince Rainier III, Prince Albert's
father. The United States does not have a diplomatic mission located in
Monaco. The U.S. Consul General in Marseille, France, under the authority of
the U.S. Ambassador to France, is formally accredited to Monaco.

Principal U.S. Official
Consul General (Marseille, France)--Philip Breeden

The U.S. Consulate General at Marseille is located at Place Varian Fry, 13286
Marseille Cedex 6 (tel. [33]-(4)-91-54-92-00).