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In February 2002, Monaco adopted the euro as its official currency, although it is not an official member of the European Community. The authorities remain under pressure to clean up the country's tax and banking systems. In June, a French judge claimed that an investigation into the Italian Mafia in Monaco had been blocked by senior justice officials due to links between those under suspicion and the royal family.
The Principality of Monaco is an independent and sovereign state, although it remains closely associated with neighboring France. In 1997, the royal Grimaldi family celebrated its 700th anniversary of rule over the principality. During the seven centuries of Grimaldi rule, Monaco has been intermittently controlled by various European powers.
It achieved independence from France in 1861. Under a treaty ratified in 1919, France pledged to protect the territorial integrity, sovereignty, and independence of the principality in return for a guarantee that Monegasque policy would conform to French interests. France has promised that in return for reforming its banking practices and tightening the laws on anti-money-laundering, Monaco will be able to re-negotiate the 1919 treaty with France.
For 52 years, Prince Rainier III has been responsible for Monaco's impressive economic growth. Under his direction, the economy has ended its exclusive dependence on gambling revenue. Its main sources of revenue are tourism, financial services, and banking.
Of 32,000 residents, Monaco is home to only 5,000 Monegasques, who alone may participate in the election of the 18member national council (legislature). The constitution also provides Monegasques with free education, financial assistance in cases of unemployment or illness, and the right to hold elective office. In the elections that took place in February 1998, the National and Democratic Union party won all the seats in the legislature.
Following criticism from France and the international community for not tightening its anti-laundering laws, the Principality of Monaco responded in 2001 by implementing a series of financial reform measures that included doubling the staff of its financial transactions monitoring unit and signing cooperation agreements with several European countries to fight money laundering. However, the OECD announced in April 2002 that Monaco remained on its list of uncooperative tax havens.
Citizens of Monaco may change the national council and their municipal councils democratically. Eighteen council members are elected for five years by direct universal suffrage and a system of proportional representation. As head of state, Prince Rainier holds executive authority, formally appoints the fourmember cabinet, and proposes all legislation. Legislation proposed by the prince is drafted by the cabinet and voted upon by the national council. The prince holds veto power over the council. The prince also names the prime minister from a list of names proposed by the French government. Political parties operate freely.
Freedom of expression is guaranteed by the constitution; however, denunciations of the royal family are prohibited by the penal code. Two monthly magazines and a weekly governmental journal are published in the principality, and French daily newspapers are widely available. Radio and television are government operated and sell time to commercial sponsors, and all French broadcasts are freely transmitted to the principality. France maintains a financial interest in Radio Monte Carlo, which broadcasts in several languages.
Roman Catholicism is the state religion in Monaco, but adherents of other faiths may practice freely. The government does not, however, permit religious groups that are considered "sects" to operate. There are no reported restrictions on academic freedom.
The constitution provides for freedom of assembly and association. Although outdoor meetings require police authorization, there were no reports that permission was withheld, according to the U.S. State Department's annual Human Rights report.
Workers are free to form unions, but fewer than ten percent of workers are unionized. Trade unions are independent of both the government and political parties. Anti-union discrimination is prohibited. Union members can be fired only with the agreement of a commission that includes two members from the employers' association and two from the labor movement.
Under the 1962 constitution, the prince delegates judicial authority to the courts and tribunals, which adjudicate independently in his name. The judiciary includes a Supreme Tribunal, consisting of seven members appointed by the prince based on nominations by the national council; courts of cassation, appeal, and first instance; and a justice of the peace.
The rights of women are respected, and women are fairly well represented in all professions. Of the 18 members of the national council, 4 are women. The law governing transmission of citizenship provides for equality of treatment between men and women who are Monegasque by birth. Only men, however, may transmit Monegasque citizenship acquired by naturalization to their children; women are denied this right.