Monaco

The Rock of Monaco was a Greek and then Roman landing place long before it was a state; the harbour's ancient name, Portus Herculis Monoeci, survives in Port Hercule. In 1215 Genoa built a fortress on the Rock to guard its western coast. In 1297 François Grimaldi, from a Genoese family exiled in political feuds, got inside disguised as a Franciscan friar and took the fortress with his men. The family lost and regained it several times before settling in for good in the 15th century.

Survival meant choosing protectors. Monaco sheltered under Spain in the 16th century, switched to France in 1641, and was annexed outright by revolutionary France in 1793, when the palace was looted and the princes imprisoned. The Congress of Vienna restored the Grimaldis in 1814–15 under the protection of the Kingdom of Sardinia. Its main towns were then Menton and Roquebrune, which revolted against taxes in 1848; in 1861 Prince Charles III sold his claim to them to France, and Monaco shrank to today's strip of coast.

Without farmland or olive and lemon revenues, the prince bet on gambling, then banned in neighbouring France and Italy. The Société des Bains de Mer was founded in 1863, the railway from Nice arrived in 1868, and the new district around the casino was named Monte-Carlo after Charles III. Within a few years the casino paid so well that direct taxes on residents were abolished in 1869 — the origin of Monaco's reputation as a tax haven.

The 20th century brought a first constitution in 1911, a treaty with France in 1918 (revised in 2002) that tied Monaco's independence to French protection, and the long reign of Rainier III (1949–2005). Rainier diversified away from gambling into banking, property and tourism, reclaimed land at Fontvieille, and married the American actress Grace Kelly in 1956. Monaco joined the United Nations in 1993. Albert II has reigned since 2005.

Monaco is fully sovereign but deeply entwined with France. A 2002 treaty commits France to defend its independence, while Monaco agrees to act in line with French interests. The Carabiniers guard the palace, but defence is French. Monaco has its own government, courts, police (the Sûreté Publique), stamps, number plates and football club, yet the currency, customs territory and VAT are shared with France and, through it, with the EU.

The prince holds executive power and appoints the Minister of State, who heads the government. The 24-member National Council, elected by Monégasque citizens only, votes laws and the budget. Since 2002 the Minister of State does not have to be French, as had been the rule for most of the 20th century. The monarchy is secure in public opinion; the Grimaldi succession rules were changed in 2002 to ensure an heir, and Albert II's children were born in 2014.

Monaco is not in the EU or formally in Schengen, but an agreement with the EU lets it use the euro and mint its own coins, and its open border with France makes it Schengen in practice. For visitors this means nothing to do at the boundary: the rules for entering France are the rules for Monaco. For residents it means complex arrangements on banking transparency, taxes and residence permits that Monaco negotiates with Paris and Brussels.

About 38,000 people live in Monaco, but only around 9,000–10,000 are Monégasque citizens. French and Italians are the largest foreign groups, followed by Britons, Swiss, Belgians and many others. Citizenship is passed by descent and is very rarely granted otherwise. Citizens receive priority in state housing and some jobs, cannot gamble in the casino, and speak Monégasque, a Ligurian dialect close to Genoese, taught in schools and used on old-town street signs.

Residency is the real prize. There is no personal income tax for residents (French nationals excepted under a 1963 agreement), so wealthy people move here, but a residence card requires proof of accommodation and funds, and property prices are among the highest in the world. The result is a population with one of the highest median ages anywhere and a service economy staffed by around 60,000 commuters who cross daily from France and Italy.

Catholicism is the state religion; the cathedral hosts state ceremonies and the tombs of the princes, and the feast of Sainte-Dévote, the patron saint, is marked every January with the ritual burning of a boat. Public life is formal and orderly. The police presence is dense, CCTV covers most streets, and rules on dress in public, noise and behaviour are enforced — part of what residents pay for.

The Casino de Monte-Carlo, designed in part by Charles Garnier, architect of the Paris Opéra, opened on its current site in 1863–65. The Société des Bains de Mer (SBM), in which the state holds a majority, still owns the casino, the Hôtel de Paris, the Hermitage and much of Monte-Carlo's hospitality. Gambling once paid for almost everything; today it is a small share of the economy, and the casino works as much as a stage set as a gaming business.

Modern Monaco earns from banking and wealth management, property, insurance, light industry in Fontvieille, luxury retail, tourism and events. The state takes most of its revenue from VAT, collected under French rules, and from corporate tax on businesses earning much of their income outside Monaco. The budget usually balances, and a sovereign reserve fund is large relative to the population.

Monaco has worked for two decades to shed its tax-haven label, signing information-exchange agreements and tightening anti-money-laundering rules. In 2024 the Financial Action Task Force placed Monaco on its 'grey list' for increased monitoring, which the government has worked to exit — check the current status. For visitors, the money shows in the yachts, the cars parked outside the Hôtel de Paris, and prices that start high and rise with every event.

Monaco is about 2 km², and around a fifth of that did not exist a century ago. The district of Fontvieille, built out of the sea in the 1970s and 80s, added about 22 hectares with a heliport, stadium, marina, offices and housing. The railway was buried in tunnels in the 1990s, freeing land along the coast, and the station itself was rebuilt underground inside the rock.

The newest district, Mareterra, added about 6 hectares off Larvotto and was completed in 2024–25 on caissons sunk into the seabed, with apartments, a park and a coastal walk. Environmental work — transplanting protected seagrass and coral before construction — was part of the project and part of how Monaco presents itself under a prince known for ocean conservation.

Density shapes daily life. Monaco climbs from the sea in terraces linked by more than 80 public lifts, escalators and pedestrian tunnels, and new towers such as the Tour Odéon rise against the mountains. Architecture runs from Belle Époque villas and the Garnier casino to 1970s apartment blocks and glass towers; the old town on the Rock is the only part that still looks like a medieval Ligurian village.

Monaco sells itself through events. The Formula 1 Grand Prix, run on public streets since 1929, turns the harbour into a paddock each spring; the Historic Grand Prix (even years) and a Formula E race use the same circuit. The Monte-Carlo Rally, the tennis Masters at Roquebrune, the Monaco Yacht Show, the Circus Festival and the Opéra season fill the rest of the calendar, and each fills hotels along the whole Riviera.

Prince Albert II has made ocean and climate causes central to Monaco's image through his foundation, and the Oceanographic Museum — founded by his great-great-grandfather Albert I, a pioneering marine scientist — remains the principality's most visited cultural site. Monaco has committed to carbon neutrality by 2050 and has banned single-use plastics in many uses.

The pressures on today's Monaco are space, housing for citizens and workers, cross-border traffic, and financial reputation. For a visitor, the practical picture is simpler: a very safe, very clean, very expensive city on a coast that is easier and cheaper to enjoy from a base in Nice.