Under the Microscope: Monaco
By Sven Stumbauer
Micro-states are some of the most obscure yet fascinating nations that the world has to offer. From small principalities edged between mountains to islands off the coast, these incredibly small nations come in vastly different geographical, topical, social, and cultural varieties. The first nation that will be discussed, Monaco, is no different. Bordering France to its West, North, and East and the Mediterranean Sea to the South, and only having an area of 0.81 square miles, the nation is known as a hub for millionaires and tycoons across the world.
Furthermore, Monaco has also garnered fame for its casinos, cityscape, and its racing event – the Monaco Grand Prix. Along with these highlights however, questions do in fact start to come up, such as “Why do millionaires frequent such a small nation?” or “What was Monaco like before its establishment as a cultural and social giant in Europe and the world?” These questions and many more will be answered in the first edition of many to come in this series. Without further ado, it is time to put the nation of Monaco “under the microscope”.
History and Political Structure
Before the bustling cityscape, casinos, and racetrack were even a thought in the minds of the Monegasque, the nation found itself at the crossroads of various civilizations. A plethora of groups and nations, such as Phoenicia, the ancient Greeks and Romans, and Carthage all at some point laid claim to and ruled over what is now current day Monaco and its surroundings. This eventually culminated in the possession of the microstate by the Genoese in 1191, with the well known Grimaldi family taking control in 1297. This dynastic lineage had Monaco under their jurisdiction for almost 500 years before its annexation in 1793. This led to Monaco being under the thumb of a newly democratic France who had just come out of the throes of the French Revolution. Although the Grimaldi family regained control for a brief period of time in 1814, Monaco became a protectorate of the nation of Sardinia as a result of the Congress of Vienna which had occurred just a year later in 1815. This relationship between Monaco and Sardinia lasted until it was ceded to France in 1860 following the unification of Italy through the Treaty of Turin, and the nation’s independence was officially recognized through the Franco-Monegasque Treaty of 1861. Today, the Grimaldi family once again finds itself in power as a constitutional monarchy, where the monarch finds themselves working with another legislative body, such as a parliamentary council. The current political system in Monaco was established in 1911 following the adoption of Monaco’s constitution. Similarly to the political structure of the United Kingdom, Monaco has a monarch in the form of Prince Albert II, Pierre Dartout as the prime minister, and a national council of 24 members that serves as the nation’s parliament. Over the years, the framework for this system has mostly stayed the same with slight modifications; the most notable one being in 2002 when the old clause stating that the prime minister must have been of French nationality was removed, which allowed any one within the nation to be eligible to run for prime minister.
The economy of Monaco is heavily dependent on tourism and banking, while also having more nuanced sectors as well. Aside from the two major industries, the nation also has a successful monopoly on tobacco, telephone networks, and postal services. The GDP or gross domestic product of Monaco is heavily composed of foreign investments, which makes up around 75% of the annual GDP, with consolidated assets from individuals and companies adding up to eigh times the nation’s entire GDP. Furthermore, the tourism industry in Monaco also makes up roughly 11% of the nation’s revenue. Aside from these powerhouse industries, Monaco also generates massive amounts of money through gambling, which makes up a substantial portion of the economy and comprising around 4% of the nation’s annual revenue.
Why do rich people frequent Monaco?
With so many foreign countries and rich individuals frequenting this incredibly tiny nation, it would be natural for one to wonder “Why Monaco and not any other nation?” The answer to that question boils down what everyone loathes, which are taxes. The only form of taxation Monaco has in place is a 19.6% tax on any purchased goods or services in the nation, which is immediately curbed by the fact that almost everyone in Monaco has the money to pay for domestic products and services. Aside from this however, there is no income tax, meaning that individuals and companies often set up within the nation to consolidate and grow their net worth, especially those from neighboring countries such as Italy and France, where the tax rate for income is incredibly high. Along with neighboring nations, countries across the continent and even the world often frequent Monaco to grow their portfolio and subsequently experience economic growth themselves. As a result, with such a small emphasis on tax, it is only natural that the wealthy would come to Monaco in droves for consolidation, marking the main reason as to why the rich frequent such a small nation.
Notable Sites and Aspects of Monaco
Aside from its rich history and almost nonexistent presence of taxes, the nation of Monaco boasts plentiful sites and attractions for tourists to experience and view. Political buildings such as the Prince’s Palace and the Monaco Courthouse are all trademarks of Monaco’s ruling and judicial bodies while also standing as a long time symbol of Monegasque architecture. The renowned Monte Carlo casino is also a must see attraction whether one is a gambler or not, as its cultural significance is so prevalent that it is shown in various movies, pop culture imagery, and even having alcoholic beverages named after it. Along with the iconic casino is the site of the annual Monaco Grand Prix, which has been running since 1929 and serves as one of Formula 1’s most prestigious and long standing events. As a nation on the coastline, it is no surprise that Monaco offers many attractions in the form of marine or maritime sites. The Oceanographic Museum, which is one of the world’s oldest aquariums, Port Hercule, Monaco Harbor, and the outdoor theater at Fort Antoine all offer stunning views of the Mediterranean Sea and the famous district of Monte Carlo. Along with visual sites, Monaco also has an astounding culinary flair that is offered. Three restaurants in Monaco have at least one Michelin Star, which are Le Blue Bay, Le Vistamar, and Le Louis XV-Alain Ducasse. Along with these world renowned establishments, the Yoshi sushi bar and the poolside Odyssey restaurant offer an incredibly diverse palate and portfolio for the outgoing tourist to explore and experience.
The nation of Monaco, despite its incredibly small size, has managed to withstand time as one of Europe’s more well known nations. Through its constant alternation between ruling powers over the course of history, to its catering to the rich and elite of the world, Monaco is without a doubt one of the most extravagant and colorful nations one can find themselves in. From the Monaco Grand Prix, gambling or having a libation in Monte Carlo, experiencing the view of the Mediterranean from Port Hercule, to the vastly diverse culinary experiences, Monaco truly offers an experience that no other nation can come close to replicating. As a result, despite the finance and logistics that may come with it, Monaco is definitely a nation that should be put on one’s bucket list.