Economic development was spurred in the late 19th century with a railroad linkup to France and the opening of a casino. Since then, the principality's mild climate, splendid scenery, and gambling facilities have made Monaco world famous as a tourist and recreation center.
Country profile: Monaco
Monaco is the second-smallest independent state in the world. It is a playground for tourists and a haven for the wealthy, the former drawn by its climate and the beauty of its setting and the latter by its advantageous tax regime.The country - a constitutional monarchy - is surrounded on three sides by France and occupies just under two square kilometres (0.75 sq mile) of the Cote d'Azur, where the Alpes Maritimes meet the Mediterranean.
Tourism drives Monaco's economy; gamblers flock to the Place du Casino in Monte-Carlo and every May the principality hosts the Monaco Grand Prix.
The country is a major banking centre and closely guards the privacy of its clients.
But it has also been the focus of French concerns about its tax policy and has been accused of tolerating money-laundering - claims it strongly denies. Monaco does not levy income tax on its residents.
The royal dynasty, the Grimaldi family, is inseparable from Monaco's existence. The royals made world headlines in 1956 when the former monarch Prince Rainier III married the American film star Grace Kelly. But the personal lives of the couple's daughters, Caroline and Stephanie, had a less welcome press.
Within the executive, the monarch nominates and is represented by a Minister of State who leads a five-member Council of Government which governs Monaco under royal authority. A 24-member National Council to which elections are held every five years exercises legislative power.
- Full name: Principality of Monaco
- Population: 32,000 (via UN, 2006)
- Capital: Monaco
- Area: 1.95 sq km (0.75 sq mile)
- Major language: French
- Major religion: Christianity
- Life expectancy: 75 years (men), 83 years (women)
- Monetary unit: euro
- Main exports: Pharmaceuticals, perfumes, clothing
- GNI per capita: n/a
- Internet domain: .mc
- International dialling code: +377
Monarch: Prince Albert II
Prince Albert took over as head of state following the death of his father, Prince Rainier, in April 2005. His swearing-in, in July, followed a three-month period of mourning.
Prince Rainier was Europe's longest-reigning monarch. He worked to reduce Monaco's reliance on tourism and gambling by attracting business. He staunchly defended Monaco's banking and taxation systems in the face of criticism from France.
It will be for Prince Albert - who says he wants to attract high-tech industry to Monaco - to carry this work forward. The prince says he will seek to cement the idea that money-laundering in the country is a thing of the past.
Prince Albert, who was 47 at the time of his father's death, is an accomplished sportsman.
His bachelorhood prompted a change to the constitution to allow the Grimaldi dynasty, which has ruled Monaco for seven centuries, to continue through the female line. Prince Albert is the 32nd ruler.
He has acknowledged that he is the father of two children born out of wedlock to different mothers. Neither will have any right to succeed to the throne.
Born in 1958, Prince Albert was educated in Monaco and the US. He served in the French navy for a time.
The influence of Monaco's broadcast media extends far beyond the borders of the tiny state. From the 1960s Radio Monte-Carlo used powerful transmitters to reach listeners across much of France, and in the 1970s broadcasts to Italy began. Radio Monte-Carlo now has extensive FM networks in both countries.
Radio Monte-Carlo Moyen Orient - a service for the Arab world set up in 1972 - is now operated by Radio France Internationale.
Television's great and good gather in Monaco every year for the Monte Carlo Television Festival, set up in 1961 by Prince Rainier.
No daily newspapers are published in Monaco, but French papers cover news from the principality.
The press
Television
Radio
Monaco, bordering France on the Mediterranean coast, is a popular resort, attracting tourists to its casino and pleasant climate. In 2001, a major construction project extended the pier used by cruise ships in the main harbor. The principality has successfully sought to diversify into services and small, high-value-added, nonpolluting industries. The state has no income tax and low business taxes and thrives as a tax haven both for individuals who have established residence and for foreign companies that have set up businesses and offices. The state retains monopolies in a number of sectors, including tobacco, the telephone network, and the postal service. Living standards are high, roughly comparable to those in prosperous French metropolitan areas.
Monegasque or Monacan natural resources include none
second-smallest independent state in the world (after Holy See); almost entirely urban
Monegasque or Monacan religion is Roman Catholic 90%.
Natural hazards in Monaco include NA.