Monaco is the second smallest country (by size) in the world; only the Vatican City is smaller. Monaco is also the world's second smallest monarchy, and is the most densely populated country in the world. The state consists of only one municipality (commune). There is no geographical distinction between the State and City of Monaco, although responsibilities of the government (state-level) and of the municipality (city-level) are different. According to the constitution of 1911, the principality was subdivided into three municipalities:
The municipalities were merged into one in 1917, after accusations that the government was acting according to the motto "divide and conquer," and they were accorded the status of wards (quartiers) thereafter.
An additional ward was planned by new land reclamation, to be settled beginning in 2014; however, Prince Albert II announced in his 2009 New Year Speech that he had ended plans due to the current economic climate. However a new expansion of Fontvieille is expected to be complete by 2015.
Monaco's name comes from the 6th century BC nearby Phocaean Greek colony. Referred to the Ligurians as Monoikos, from the Greek "μόνοικος", "single house", from "μόνος" (monos) "alone, single" + "οἶκος" (oikos) "house", which bears the sense of a people either settled in a "single habitation" or of "living apart" from others. According to an ancient myth, Hercules passed through the Monaco area and turned away the previous gods. As a result, a temple was constructed there, the temple of Hercules Monoikos. Because the only temple of this area was the "House" of Hercules, the city was called Monoikos.
Following a land grant from Emperor Henry VI in 1191, Monaco was re-founded in 1215 as a colony of Genoa. Monaco was first ruled by a member of the House of Grimaldi in 1297, when Francesco Grimaldi ("Il Malizia", translated from Italian either as "The Malicious One" or "The Cunning One") and his men captured the fortress protecting the Rock of Monaco while he was dressed as a Franciscan monk – a Monaco in Italian, although this is a coincidence as the area was already known by this name. Francesco, however, was chased off only a few years afterwards by the Genovese forces, and the struggle over "the Rock" continued for another century.
In 1419. the Grimaldis purchased Monaco from the crown of Aragon and became the official and undisputed rulers of "the Rock of Monaco", and it was in 1612 Honore II began to style himself "Prince" of Monaco. In the 1630s, Honore II sought French protection against the Spanish forces and was eventually, in 1642, received in the court of Louis XIII as "Duc et Pair Etranger". The princes of Manaco thus became a vassal of the French kings while at the same time remained a sovereign prince. As the successive princes and their families spent most of their lives in Paris, and through marriages with French nobilities, the House of Grimaldi, Italian in origin, became thoroughly French in character. The principality continued its existence as a protectrate of France until the Great Revolution.
In 1793, French Revolutionary forces captured Monaco and it remained under direct French control until 1814 when the Bourbons returned to the throne. The principality was re-established that year, only to be designated a protectorate of the Kingdom of Sardinia by the Congress of Vienna in 1815. Monaco remained in this position until 1860 when, by the Treaty of Turin, the Sardinian forces pulled out of the principality and the surrounding county of Nice (as well as Savoy)was ceded to France. Monaco became a French protectrate once again. Prior to this time there was unrest in Menton and Roquebrune where the townspeople had been weary of heavy taxation by the Grimaldis, and declared independence hoping for annexation by Sardinia. France protested. The unrest continued until Charles III gave up his claim to the two mainland towns (some 95% of the principality) that the Grimaldis ruled for over 500 years. They were ceded to France in return for 4,100,000 francs. The transfer and Monaco's sovereignty was recognised by the Franco-Monegasque Treaty of 1861. In 1869, the principality stopped collecting income tax from its residents; indulgence the Grimaldis could afford to entertain thanks solely to extraordinary success of the casino. This made Monaco not only the playground for the rich, but the place to live.
Following a period of official mourning, Prince Albert II formally assumed the princely crown on 12 July 2005, in a celebration that began with a solemn Mass at Saint Nicholas Cathedral, where his father had been buried three months earlier. His accession to the Monegasque throne was a two-step event, with a further ceremony, drawing heads of state for an elaborate levée, held on 19 November 2005 at the historic Prince's Palace in Monaco-Ville.
Monaco has been governed under a constitutional monarchy since 1911, with the Sovereign Prince of Monaco as monarch. The executive branch consists of a Minister of State (the head of government), who presides over a five-member Council of Government. Until 2002, the Minister of State was a French citizen appointed by the prince from among candidates proposed by the French government; since a constitutional amendment in 2002, the Minister of State can be French or Monegasque. However, Prince Albert II appointed, on 3 March 2010, the Frenchman Michel Roger as Minister of State.
Under the 1962 constitution, the prince shares his power with the unicameral National Council (parliament). The twenty-four members of this legislative body are elected from lists by universal suffrage for five-year terms. The principality's local affairs are directed by the Communal Council, which consists of fifteen elected members and is presided over by the mayor.
One of Monaco's main sources of income is tourism; each year many are attracted to its casino and pleasant climate. Monaco's own citizens are not allowed to gamble in the casino. In 2001, a major new construction project extended the pier used by cruise ships in the main harbour. The principality has successfully sought to diversify into services and small, high-value-added, non-polluting industries, such as cosmetics and biothermics.
The state retains monopolies in numerous sectors, including tobacco and the postal service. The telephone network (Monaco Telecom) used to be fully owned by the state; it now owns only 45%, while the remaining 55% is owned by both Cable & Wireless Communications (49%) and Compagnie Monégasque de Banque (6%). It is still, however, a monopoly. Living standards are high, roughly comparable to those in prosperous French metropolitan areas.
Monaco is not a member of the European Union. However, it is very closely linked via a customs union with France, and as such, its currency is the same as that of France, the euro. Before 2002, Monaco minted its own coins, the Monegasque franc. Monaco has acquired the right to mint euro coins with Monegasque designs on its national side.
In 1998, the Organisation for Economic Co-operation and Development (OECD) issued a first report on the consequences of the tax havens' financial systems. Monaco did not appear in the list of these territories until 2004, when OECD became indignant regarding the Monegasque situation and denounced it in its last report, as well as Andorra, Liechtenstein, Liberia and the Marshall Islands, underlining its lack of co-operation as regards financial information disclosure and availability.
In 2000, a report by the French parliamentarians, Arnaud Montebourg and Vincent Peillon, alleged that Monaco had lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco had been placing political pressure on the judiciary, so that alleged crimes were not being properly investigated.
In 2000, the Financial Action Task Force on Money Laundering (FATF) stated: "The anti-money laundering system in Monaco is comprehensive. However, difficulties have been encountered with Monaco by countries in international investigations on serious crimes that appear to be linked also with tax matters. In addition, the FIU of Monaco (SICCFIN) suffers a great lack of adequate resources. The authorities of Monaco have stated that they will provide additional resources to SICCFIN." The Principality is no longer blamed in the 2005 FATF report, as well as all other territories. However, since 2003, the International Monetary Fund (IMF) has identified Monaco, along with 36 other territories, as a tax haven.
The Council of Europe also decided to issue reports naming tax havens. Twenty-two territories, including Monaco, were thus evaluated between 1998 and 2000 on a first round. Monaco is the only territory that refuses to perform the second round, initially forecast between 2001 and 2003, whereas the 21 other territories are implementing the third and last round, planned between 2005 and 2007.
However, Monaco has high social insurance taxes payable by both employer and employee. The employer's contribution is between 28%–40% (averaging 35%) of gross salary including benefits and the employee pays a further 10%–14% (averaging 13%).
In Monaco, the euro was introduced in 2002. The euro was preceded by the Monegasque franc. In preparation for this date, the minting of the new euro coins started as early as 2001. This is why the first euro coins from Monaco have the year 2001 on them, instead of 2002, like other countries of the Eurozone. Three different designs were selected for the Monegasque coins. In 2006, the design was changed after the death of ruling Prince Rainier to have the effigy of Prince Albert.
Monaco also has a rich and valuable collection of collectors' coins, with face value ranging from €5 to €100. These coins are a legacy of an old national practice of minting silver and gold commemorative coins. Unlike normal issues, these coins are not legal tender in all the Eurozone. For instance, a Monegasque commemorative coin cannot be used in any other country. The same practice concerning commemorative coins is exercised with all eurozone countries. Commemorative coins are legal tender only in their country of issue, unlike normal circulation coins, which are accepted in all euro-zone countries.
Monaco has a warm-summer Mediterranean climate (Köppen climate classification: Csa), which is influenced by the oceanic climate and the humid subtropical climate.
As a result, it has warm, dry summers and mild, rainy winters. Cool and rainy interludes can interrupt the dry summer season, the average length of which is also shorter. Summer afternoons are infrequently hot (indeed, temperatures > 30 °C /86 °F are rare) as the atmosphere is tempered by constant sea breezes. On the other hand, the nights are very mild, this being due to the fairly high temperature of the sea in summer. Generally, temperatures do not drop below 20 °C in this season. In winter, frosts and snowfalls are extremely rare, generally occurring once or twice every ten years.
Since 1955, the Monaco Grand Prix has been held annually in the streets of Monaco. It is widely considered to be one of the most prestigious automobile races in the world. The erection of the Circuit de Monaco takes six weeks to complete, and the removal after the race another three weeks. The circuit has many elevation changes and tight corners, along with a tunnel. This together with being incredibly narrow and tight makes it perhaps the most demanding Formula One track. Only two drivers have ever crashed into the harbour, the most famous being Alberto Ascari in the 1955 Monaco Grand Prix, just four days before losing his life at Monza. The other was Paul Hawkins, during the 1965 Monaco Grand Prix.
The Monte-Carlo Masters is currently held annually in neighbouring Roquebrune-Cap-Martin, France, as a professional tournament for men as part of tennis' ATP Masters Series. The tournament has been held since 1897. Golf's Monte Carlo Open was also held at the Monte Carlo Golf Club at Mont Agel in France between 1984 and 1992. Monaco has also competed in the Olympic Games, although, as of 2008, no athlete from Monaco has ever won an Olympic medal.
In 2009, the Tour de France, the world's premier bicycle race, started from Monaco with a 15 km closed-circuit individual time trial starting and finishing there on the first day (4 July) and the 182 km second leg starting there on the following day and ending in Brignoles, France.
Monaco also stage part of the Global Champions Tour (International Show-jumping). Acknowledged as the most glamorous of the series, Monaco will be hosting the world's most celebrated riders, including Monaco's own Charlotte Casiraghi, in a setting facing out over the world's most beautiful yachts, and framed by the Port Hercule and Prince's palace. In 2009, the Monaco stage of the Global Champions tour took place between 25 – 27 June.
The Monaco Marathon is the only marathon in the world to pass through three separate countries, those of Monaco, France and Italy. The 2010 event took place on 21 March. Runners complete the race by returning to the Stade Louis II.
The Monaco Ironman 70.3 triathlon race is an annual event with over 1000 athletes competing and attracts top professional athletes from around the world. The race includes a 1.9 km swim, 90 km bike ride and 21.1 km run.
Monaco's population is unusual in that the native Monegasques are a minority in their own country. The largest proportion of residents are French nationals (28%), followed by Monegasque (21.6%), Italians (19%), Anglos (7.5% UK & 1% USA), and Germans, Swiss, and Belgians (2.5% to 3% each); another 15% is labeled as "other" populations. A Monacoian is the term used to describe a person living in Monaco who is not a citizen of Monaco.
The official language of Monaco is French. The traditional national language is Monégasque, now spoken by only a minority of residents. It resembles Ligurian, which is spoken in Genoa. In the old part of Monaco, street signs are printed in both French and Monégasque. Italian is also spoken by the principality's sizeable community from Italy. English is used by British and American residents.
The official religion is Roman Catholicism, with freedom of other religions guaranteed by the constitution. There are five Roman Catholic parish churches in Monaco and one cathedral, which is the seat of the archbishop of Monaco. The diocese, which has existed since the mid-nineteenth century, was raised to an archbishopric in 1981 as the Archdiocese of Monaco. The patron saint is Saint Devota.
The wider defence of the nation is provided by France. Monaco has no navy or air force, but on both a per-capita and per-area basis, Monaco has the largest police force (515 police officers for 35,000 people) and police presence in the world. Its police includes a specialist unit which operates patrol and surveillance boats. There is also a small military consisting of a bodyguard unit for the Prince and his palace called the Compagnie des Carabiniers du Prince which numbers 116 officers and men and is equipped with modern weapons such as M16 rifles and 9 mm pistols, and a militarized (and armed) fire and civil defence Corps.
The Compagnie des Carabiniers du Prince (Prince's Company of Carabiniers) is a military unit of the military force of Monaco. It was created by Prince Honoré IV in 1817 for the protection of the Principality and the Princely family. The company numbers exactly 116 officers and men; while the NCOs and soldiers are local, the officers have generally served in the French Army. Together with the local fire service (Sapeurs-Pompiers), the Carabiniers form Monaco's total public forces. In addition to their guard duties, the company patrols the Principality's beaches and coastal waters, as well as duties around the Palace in Monaco-Ville.