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Prince Rainier, the 80-year-old ruler of the country, was hospitalized in the early part of the year with acute heart problems caused by general fatigue. The country joined the Council of Europe as the forty-sixth member state in October. The European Court of Human Rights ruled that German tabloids had wrongly invaded the private life of Princess Caroline by showing pictures of her sunbathing, cycling, and shopping.
The Principality of Monaco is an independent and sovereign state, although it remains closely associated with neighboring France. The royal Grimaldi family has ruled the principality for the past 700 years, except for a brief period of French colonial rule from 1789 to 1814. 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 political, military, and economic interests.
Prince Rainier III has led the country since 1949 and is often credited for the country's impressive economic growth. Since his ascension, the country has ended its dependence on gambling and increased other sources of revenue - principally tourism, financial services, and banking. In August 2002, the country added a huge new floating pier to its harbor, the Port of Monaco, which is well known as a major port for expensive yachts and fancy cruisers. The pier, the largest in the world, cost almost $250 million and doubles the capacity of the country's port. In February 2002, Monaco adopted the euro despite that fact that it is not a member of the European Union (EU).
Elections in February 2003 led to a major upset for the National and Democratic Union (UND), which lost after dominating national politics in the country for the past several decades. The opposition Union for Monaco (UPM) received 58.5 percent of the vote and 21 of the 24 seats in the Conseil National, while the UND received 41.5 percent of the vote. The UPM's victory represented widespread support for Monaco's bid for membership in the Council of Europe, an issue the party had promoted strongly.
Rainier was hospitalized in January for heart problems related to general fatigue. His doctors said that he had been suffering from bronchial conditions connected with exhaustion. Rainier, who has led the country for 55 years, is the world's second-longest reigning monarch after the king of Thailand. He has also ruled the country longer than any of his predecessors since the 18th century. His only son, Prince Albert, is his likely successor.
The country is one of five uncooperative tax havens listed by the Organization for Economic Cooperation and Development (OECD). A new EU directive passed in early 2003 threatens Monaco's status as a major tax haven. The directive calls for EU members with secret banking laws to impose a withholding tax on revenue from interest-bearing accounts. After negotiations with the EU, Monaco and other key non-EU countries have agreed to adopt similar measures.
Citizens of Monaco can elect their parliamentary representatives democratically. However, the prince has the sole authority to initiate laws and change the government. The 24 members of the Conseil National are elected every five years: 16 are elected by a majority electoral system and 8 by proportional representation. The head of state is not elected but inherits the position. Prince Rainier III, who has ruled the country for the past 55 years, fell gravely ill with a heart condition and is expected to be succeeded in the near future by Prince Albert, his only son with the late American actress Grace Kelly.
The head of government - the Minister of State - is traditionally appointed by the monarch from a list of three candidates who are French nationals presented by the French government. The current Minister of State, Patrick Leclercq, has held the post since 2000. In addition to the Minister of State, the prince also appoints three other ministers (counselors) who collectively make up the government. All legislation and the budget, however, require the assent of the Conseil National.
Because of a lack of available financial information, the country's level of corruption is difficult to measure. Monaco remains on the OECD's list of uncooperative tax havens. However, Monaco is one of five non-EU tax havens that are negotiating with the EU to adopt measures to combat harmful tax competition. The country is expected to agree either to provide information to EU member states about the interest paid to individual savers from those member states, or to levy a withholding tax.
The media in Monaco are free and independent. The constitution provides for freedom of speech and the press, although the penal code prohibits denunciations of the ruling family. Internet access is not restricted.
In June, the European Court of Human Rights ruled unanimously in favor of Princess Caroline von Hannover of Monaco, who had filed a suit against German tabloids arguing that they have transgressed her rights to privacy. The tabloids had published pictures of her on vacation and other aspects of her private life.
The constitution provides for freedom of religion. However, Roman Catholicism is the state religion and Catholic ritual plays a role in state festivities. There are no laws against proselytizing by formally registered religious organizations, although to do so is strongly discouraged. There are no restrictions on academic freedom. The country has only one institution of higher education, the University of Monaco, a private university that only offers degrees in business administration.
The government does not impose restrictions on the formation of civic and human rights groups. Workers have the legal right to organize and bargain collectively, although they rarely do so. Only 10 percent of the workforce is unionized. All workers except those in the government have the right to strike. The constitution provides for the freedom of assembly and the government respected this right. Although outdoor meetings require police authorizations, there were no reports that the government withheld authorization for political reasons.
The legal right to a fair public trial and an independent judiciary is generally respected. The constitution requires that the prince delegate his judicial powers to the judiciary. Prisons generally met international standards.
The constitution differentiates between the rights of nationals and those of noncitizens. Of the estimated 32,000 residents in the principality, only about 7,000 are actual Monegasques, who alone may participate in the election of the Conseil National. Monegasques also benefit from free education, unemployment assistance, and the right to hold elective office.
A woman can lodge criminal charges against a husband for domestic violence, and women generally receive equal pay for equal work. Although naturalized male citizens in Monaco can transfer citizenship, naturalized women cannot. Also, women who become naturalized citizens by marriage cannot become an elector (vote?) or eligible to be a candidate in elections until five years after the marriage. There were no reports of trafficking in persons into, from, or within Monaco over the year.