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In April 2006, Monaco’s Prince Albert II reached the North Pole with seven others in a dog-sled expedition conceived to raise awareness about global warming. In June, the prince admitted to fathering a second child out of wedlock.
The Principality of Monaco is an independent and sovereign state, although it remains closely associated with neighboring France. The princely Grimaldi family has ruled for the past 700 years, except for a brief period of French occupation from 1793 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, who led the country from 1949 to 2005, is often credited with achieving its impressive economic growth. During his reign, Monaco ended its dependence on gambling and nurtured other sources of revenue—principally tourism, financial services, and banking. In February 2002, Monaco adopted the euro currency 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 had dominated national politics for 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.
On April 6, 2005, Rainier, 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. His son and successor, Prince Albert II, admitted in June 2006 to fathering a second child out of wedlock, this time a girl born to a California woman in 1992. The revelation came after a similar disclosure in 2005, in which the prince admitted to fathering a boy born in 2003 to an Air France flight attendant from Togo. Neither child is in line for the throne.
Monaco is one of five countries listed as uncooperative tax havens 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 EU citizens in a member state other than their country of residence, or in certain non-EU countries, came into effect in July 2005. Monaco agreed to participate in the directive, which is intended to prevent harmful tax practices.
In April 2006, Albert reached the North Pole with seven others in a dog-sled expedition. The prince, who made the trip to raise awareness of global warming, became the first sitting head of state to make the trip. According to the British Broadcasting Corporation (BBC), the prince’s great-great-grandfather had made four Arctic trips a century earlier.
Monaco is an electoral democracy. However, the prince has the sole authority to initiate legislation and change the government. The 24 members of the unicameral Conseil National are elected every five years: 16 are chosen through 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 55 years and was succeeded by his son, Prince Albert II. Rainier changed the constitution in 2002 to allow for Princess Caroline and Princess Stephanie, Albert’s sisters, to follow their brother if he fails to produce a legitimate heir. Previously, the law had stated that the principality would become a part of France in the absence of a male heir.
The head of government, known as the minister of state, is traditionally appointed by the monarch from a list of three candidates, all 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 appoints five other ministers (counselors) who collectively make up the cabinet. All legislation and the budget 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 2006 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. Since July 2005, the government has applied a withholding tax to accounts in Monaco held by citizens of EU member states. Most of the revenue from the tax goes back to the EU member state where the account holder 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 guarantees freedom of religion. However, Roman Catholicism is the state religion, and Catholic ritual plays a role in state ceremonies. There are no laws against proselytizing by formally registered religious organizations, but it is strongly discouraged. Academic freedom is not restricted. The country has only one institution of higher education, the private University of Monaco, which 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 freedom of assembly, which is generally respected by the authorities. No restrictions are imposed on the formation of civic and human rights groups. Although outdoor meetings require police authorization, there have been 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 state employees have the right to strike.
The legal right to a fair public trial and an independent judiciary is generally respected. The justice system is based on French legal code, and the constitution requires that the prince delegate his judicial powers to the courts. The prince names the five full members and two judicial assistants to the Supreme Court on the basis of nominations by the Conseil National and other government bodies. Jail facilities generally meet international standards. Once criminal defendants receive definitive sentences, they are transferred to a French prison.
The constitution differentiates between the rights of Monegasque 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 her husband for domestic violence, and women generally receive equal pay for equal work. Although naturalized male citizens in Monaco can transfer citizenship to their offspring, naturalized female citizens cannot. Women who become naturalized citizens by marriage cannot vote or 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.