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In April 2005, Prince Rainier III, the longest-reigning monarch in Europe, died of heart, kidney, and lung problems and was succeeded by his only son, Prince Albert II.
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, who led the country from 1949 to 2005, is often credited with achieving the country's impressive economic growth. During his reign, Monaco ended its dependence on gambling and increased other sources of revenue-prin-cipally tourism, financial services, and banking. In February 2002, Monaco adopted the euro despite the fact that it is not a member of the European Union (EU).
Legislative 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 UNDreceived 41.5 percent of the vote.
On April 6, 2005, Prince Rainier III, the longest-reigning monarch in Europe, died at the age of 81. He had been suffering from heart and lung problems since at least 2003. Prince Albert, who succeeded his father, is unmarried. Often dubbed the "playboy prince," Albert caused a stir when he confirmed rumors that he fathered a child out of wedlock with a Togolese flight attendant. The child, who was born in 2003, is not in line for the throne.
The country is one of five uncooperative tax havens listed by the Organization for Economic Cooperation and Development (OECD). The EU Savings Taxation Directive, which provides a way to tax revenue from savings accounts held by European citizens in a member state other than their own country of residence or in certain non-EU countries, came into effect July 1, 2005. Monaco agreed to participate in the directive, which is intended to prevent harmful tax practices.
Citizens of Monaco can change their government demo-cratically. 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 died in April 2005, ruled the country for the past 55 years and was succeeded by his son, Prince Albert II. Prince Rainier changed the constitution in 2002 to allow for Princess Caroline and Princess Stephanie, Albert's sisters, to follow their brother if he remains "childless." Previously, the law stated that the principality would have become a part of France in the absence of a male heir.
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, Jean-Paul Proust, has held the post since June 2005. 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 was not ranked by Transparency International in its 2005 Corruption Perceptions Index. Monaco remains on the OECD's list of uncooperative tax havens. However, the country is one of five non-EU tax havens that have agreed to adopt measures to combat harmful tax competition. Starting in July 2005, the government will apply a withholding tax to accounts in Monaco held by European citizens from EU member states. Most of the revenue from this tax will go back to the EU member state where the saver resides.
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.
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 offers degrees in business administration only. Monegasque students are eligible to enter French and other postsecondary educational institutions on the basis of specific agreements. The government provides grants for higher education students to study foreign languages abroad.
The constitution provides for the freedom of assembly, and the government respects this right. No restrictions are imposed on the formation of civic and human rights groups. Although outdoor meetings require police authorizations, there were no reports that the government withheld authorization for political reasons. 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 legal right to a fair public trial and an independent judiciary is generally respected. The judicial system is based on French legal code. The constitution requires that the head of state delegate his judicial powers to the judiciary. The prince names the five full members and two judicial assistants to the Supreme Court on the basis of nominations by the National Council and other government bodies. Prisons generally meet international standards. Once prisoners receive definitive sentences, they are transferred to a French prison.
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. As long as they secure a residence permit, noncitizens are free to purchase real estate and open a business in Monaco.
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 female citizens cannot. Also, women who become naturalized citizens by marriage cannot run as candidates in elections until five years after the marriage. There were no reports of trafficking in persons into, from, or within Monaco during the year.