With an area of 1.95 km², the Principality of Monaco (officially: Principauté de Monaco) on the French Mediterranean coast is the second smallest state in Europe after the Vatican State. In the west, north and east the country borders on France. A narrow coastal strip forms the largest part of the country, which rises steeply to the northwestern hinterland.

The principality consists of four city districts: Monaco-Ville, La Condamine, Fontvielle and Monte Carlo. Monaco-Ville lies on one of the many steep cliffs that are foothills of the French Maritime Alps. The old town, the princely castle and the oceanographic museum are located here at a height of over 60 metres. The port of the Principality lies north of the old town in a sheltered bay in the La Condamine district. To the north is Monte Carlo with its famous casino and congress centre. The Fontvielle district is located on a peninsula that was created in the 1960s through embankments.

Political System

According to the Constitution of 1962, the Principality of Monaco is a constitutional hereditary monarchy with limited sovereignty. In important foreign policy matters, there is an obligation to “coordinate” with France. The Prince as Head of State (since 2005 Prince Albert II) appoints the Minister of State (since 2010 Michel Roger) as Head of Government. The appointment of the Minister of State requires France’s approval. A Crown Council, of which a total of seven members are appointed by the Reigning Prince and three elected by the National Council for three years, advises the Head of State on domestic policy issues.

The legislative power lies with the Reigning Prince and the National Council. Its 24 members are elected every five years. Each Monegasque receives the right to vote on his 18th birthday. There are no actual administrative units in Monaco, but the city has four districts: Fontvieille, La Condamine, Monte Carlo and Monaco-Ville.

Economy

Although there are no economic statistics of its own for the small state, whose economy is closely interwoven with that of France (Customs Union 1865, Monetary Union 1925), Monaco is certainly one of the richest countries in the world. The economic boom began with gambling, which in turn boosted tourism. Today, the focus is on financial services. Since 1869, private individuals have no longer had to pay direct taxes (exception for French citizens by an agreement of 1963), and as a result (and due to the stable political situation) the state is considered one of the “tax havens” for foreign investors. Economic growth was 6.6% in 2012.

Agriculture practically does not exist in the city-state. It produces and exports mainly semi-finished and capital goods, imports industrial and consumer goods, machinery, vehicles, food and energy.

Tourism is an important branch of the economy, as over five million foreign visitors come to the country every year. Attractions include the Congress Centre, the Casino, Formula I Races and the Oceanographic Museum. Since Monaco does not have an airport, there is a helicopter connection to the airport in Nice. Currency is the Euro due to the monetary union with France.

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