The present territory of the Principality of Monaco covers 195 hectares (1.95 km²), 31 of which have been entirely reclaimed from the sea! The last general census completed in 2000 registered 32,020 residents in the Principality, including 81% of foreigners (32% of the total population is of French nationality). Monegasque nationals are approximately 7,000. The official language is French. Italian and English are, however, widely spoken and understood. The traditional Monégasque language is a very colourful dialect, used by the "old" nationals, but it is once again being studied in the schools of the Principality. The unit of currency is the Euro. Monégasque Euro coins and European Euro coins are in circulation. The catholic religion is the State religion. Freedom of worship is, however, guaranteed by the Constitution (the Anglican, Baha'i, Jewish and Protestant faiths are represented in the Principality). The national holiday is celebrated on 19 November. The Prince's motto is "Deo Juvante" (with God's help). If the sovereignty of Monaco is today indisputable, undisputed and internationally recognised, it has not always been so, as it's history demonstrates.

THROUGH THE CENTURIES

Before the XIII century

From ancient times the Rock of Monaco and the natural harbour served as a refuge for primitive peoples, and subsequently for navigators from the East. In the VI century B.C., the Rock was inhabited by the Ligurian tribe, the "Monoïkos" (which is the probable origin of the name Monaco). In the year 122 B.C., the Romans settled in Provence; Monaco became part of the Alpes-Maritimes. Julieus Caesar set sail from Monaco to go and fight in Greece. In the year 7 B.C. the Trophy of Augustus was built at La Turbie in honour of the victory of the Roman campaigns.

From the V century A.D.(fall of the Roman Empire), the region was ravaged by hordes of Barbarians, until 972 when the Count of Provence crushed the Saracens, thus marking the beginning of a new era. In 1162, the Emperor of the West, Frederic Barbarossa granted maritime dominion of the region to the Republic of Genoa.

THE HISTORY OF THE GRIMALDIS

The heroic phase

Up to 1419, the Rock was the scene of bloody battles between the two major groups of Genoa: the Ghibellines (supporters of the Emperor) and the Guelphs (loyal to the Pope). During this period, the Ghibellins built a castle in 1215, on the site of the present-day Palace. On 8 January 1297, the Guelph Francois Grimaldi, disguised as a monk, secretly got into the place. This is commemorated on the Grimaldi coat-of-arms which depicts two monks brandishing a sword. In 1346, and then in 1355, Charles Grimaldi built up the veritable domain of the Principality by acquiring the Seigneuries of Menton ad Roquebrune.

The diplomatic phase

In 1489, the King of France, Charles VIII, and the Duke of Savoy recognised Monaco's independence. In 1525, Monaco came under the protection of Spain. On 5 August 1529, Charles V stayed in Monaco before going to Italy to receive the Imperial Crown from the Pope.

The phase of splendour

In 1612, Honoré II, Lord of Monaco, took the title of Prince. On 14 September 1641, Honoré II and the King of France Louis XIII, signed the Treaty of Péronne. The Spanish were driven out. This was the French alliance. To counteract the loss of the advantages granted by Spain, the Prince of Monaco received "French Lands": the Duchy of Valentinois, the Viscountcy of Carlat, in Auvergne, and the marquisate of Les Baux, together with the Seigneury of Saint-Rémy in Provence. In 1698, Prince Louis I was appointed French Ambassador to the Holy See by his god-father, Louis XIV of France.

The Revolution and the Empire

In 1793, the Principality of Monaco became part of the territory of the Republic of France under the name of "Fort Hercule", an ordinary town in the Alpes-Maritimes! The Prince and his family were arrested, their wealth dispersed, and the Palace turned into a workhouse.

The transitory phase

The Treaty of Paris of 30 May 1814 completely restored the rights of the Grimaldis. The second Treaty of Paris of 20 November 1815 placed the Principality under the protection of King of Sardinia (Protectorate established by the Treaty of Stupinigi of 8 November 1817). On 20 March 1848, Menton and Roquebrune proclaimed themselves free and independent towns, under the protection of the King of Sardinia. In 1856 "The Société des Bains de Monaco » was created. This was eventually to become the present-day « Société des Bains de Mer et du Cercle des Etrangers ». In 1861, Sardinia transferred its rights over Menton and Roquebrune to France, under protest from Prince Charles III of Monaco.

International expansion

On 2 February 1861, Prince Charles III gave up his rights over Menton and Roquebrune to France. The Principality then became completely and definitively independent.

1865: customs agreement with France. French and Monegasque territories, including their territorial waters, formed a customs union (there was no frontier between the two countries). The Casino was opened. By the sovereign ordinance of 1 June 1866 the former plateau des Spélugues was renamed Monte Carlo.

1869: the inhabitants of the Principality became exempt from land taxes, personal and residency taxes, and the tax on licenses for trades and professions.

1879: opening of the Monte Carlo Opera, designed by Charles Garnier.

1881: official creation of the national flag, red and white.

1906: Prince Albert I founded the Oceanographic Institute for the study of marine science. During His "career as a navigator", the "Scientist Prince" undertook numerous scientific expeditions, scouring the seas in every direction (the Azores, North America, the Brazilian coast, Spitzbergen). Anaphylaxis, initiating work on immunity, was discovered on his ship in 1901. Prince Albert I was also responsible for the creation of the Anthropological Museum (1902), the foundation, in Paris, of the Institute of Human Palaeontology (1903), the initiative for the Exotic Gardens (opened in 1933), and the creation of the international Commission for the Scientific Exploitation of the Mediterranean (I.C.S.E.M.) (1919).

1911: the Principality has a Constitution for the first time.
Creation of the Monte Carlo Rally - First performances of Serge de Diaghilev's "Ballets Russes".

1918: treaty with France passed, in 1919, by the signatory powers of the Treaty of Versailles. France undertook to defend the independence, the sovereignty and the territorial integrity of the Principality. In return, the Principality undertook to exercise its sovereign rights in accordance with French interests.

1929: first Monaco Grand Prix.

1948: creation of the Monégasque Red Cross.

1949: accession of Prince Rainier III to the throne (succeeding His grandfather Prince Louis II).

1956: marriage of Prince Rainier III to Miss Grace Patricia Kelly.

1960: creation of the Centre Scientifique de Monaco, for the study of marine radioactivity, meteorology, seismology and marine microbiology.

1962: on 17 December a new Constitution became law in the State.

1963: a tax agreement and new agreements for mutual administrative aid with France. A tax on profits was created for those companies with more than 25% of the turnover outside the Principality. French nationals residing in the Principality after 13 October

1957 were subject to French personal income tax from then on.

1982: on 14 September, Princess Grace died following a tragic accident.

1993: on 28 May, the Principality of Monaco became the 183rd full Member State of the United Nations.

1997: the Principality of Monaco celebrated the 700th Anniversary of the Grimaldi Dynasty.

1999: The Principality of Monaco celebrates H.S.H. Rainier III Jubilee.

2004: the Principality of Monaco becomes the 46th Member State of the Council of Europe.

2005: Prince Rainier III died on the 6th of April, at the age of 81, after ruling for 56 years. His son Prince Albert II, succeeds him at the age of 47.

INSTITUTIONS

The Constitution of 17 December 1962 is the basis today of the organisation of this State, whose independence and sovereignty are universally recognised by all national and international jurisdictions.

Political and administrative organisation

The Constitution of 1962 defines the nature of the government in the Principality as a constitutional hereditary monarchy, that is to say, not an absolute monarchy, but the powers of the Sovereign and His government must be exercised within the framework of the Constitution, the principles of which take precedence over all institutions (with the exception of international Treaties).

The Prince is the Head of State

His flag is that of the House of Grimaldi dating from the Middle Ages. He is succeeded by the direct legitimate descendants, in order of age, with priority to male descendants of the same degree of kinship. In certain matters, the Prince is assisted by purely consultative assemblies:

 The Crown Council (7 members)
 The Council of State (12 members)

The Monegasque Government

Executive power is exercised, under the High Authority of the Prince, by a Minister of State, assisted by a Council of Government (3 members appointed by the Prince).

This Council is divided into the following areas:

 Councillor for the Interior: Security and the Police Force, National Education, Public Health, Religion.
 Councillor for Finances and Economy: Budget and Treasury, Tax Department, Monopolies, Housing Department, Economic Development, Tourism, Statistics and Economic Studies.
 Councillor for Public Works and Social Affairs: Public Works, Town Planning and Construction, Telephones, Shipping, Labour and Social Affairs.

The Government is also helped in its task by consultative bodies:

 The Council of State
 The Economic Council

ECONOMY

Contrary to popular belief prevalent abroad, the Principality of Monaco does not live off gambling, since the income from the concession of this monopoly represents no more than 4% of the local State revenue ! Most revenue results from economic activity centred around four major areas :

1 - Industrial activity : non-polluting light industry with high added value, represented by about a hundred enterprises developing a wide range of activities (chemistry, cosmetology, processing of plastics, cardboard...), grouped essentially in the area of Fontvieille

2 - Services : that have developed profoundly in recent years, particularly in the area of financing and banking activities. The main foreign banks and financial establishments are present in the Principality

3 - Commercial activity : very dynamic, trade has diversified by associating the top of the market with the modernism of shopping centers

4 - Tourism : at the heart of the country's economic life today

Breakdown of State budgetary revenue (2006)

Property : 9%

Monopolies : 5%

Monopolies conceded : 5%

Financial area : 2%

Profits & revenue from administration services : 3%

Contributions : 75%

Turnover from the private sector (2006)

Turnover for Monaco : 2.90 billion EUR

Turnover for France : 2.02 billion EUR

EU turnover (except France) : 1.33 billion EUR

Tax-exempt turnover : 6.60 billion EUR

Breakdown of turnover according to activity sector :

Retail trade : 8%

Entertainment & AV : 4%

Trade aux. : 7%

Postal service & telecoms : 3%

Electricity-Gas : 0.4 %

Miscellaneous : 1%

Industry : 7%

Public works : 5%

Property : 3%

Hotels : 3%

Transport : 2%

Intermediaries : 5%

Banking & Finance : 15%

Wholesale Trade : 37%

Total labour force: 37,400 people

Leisure tourism

For the greatest pleasure of its visitors, the Principality benefits from the ultra modern and highly comfortable hotel facilities (78% of hotels rooms are in 4-star category).

The principality thrives as a wellbeing destination: exceptional amenities entirely dedicated to body treatments offer the latest relaxation and wellbeing programmes, together with products of the utmost quality, all within first-class facilities run by highly qualified staff. The Principality has many other assets to offer including museums, sports and cultural events, trade fairs and exhibitions. The spirit of the city is more enduring than ever.

Market share according to geographic origin (2006)

(Percentage of nights for all hotels taken together)

• - Italy : 17%
• - France : 15%
• - United Kingdom : 13%
• - North America : 11%
• - Germany : 4%
• - Japan : 2%
• - Others : 38%

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