Monaco, << MON uh koh, >> is the second smallest country in the world. Only Vatican City is smaller. Monaco has an area of less than 1 square mile (2 square kilometers). It lies on the French Riviera, which borders the Mediterranean Sea. France borders Monaco on the other three sides.
Monaco is a popular tourist resort, with many luxury hotels, clubs, flower gardens, and places of entertainment. One of its chief attractions is the famous Monte Carlo gambling casino. Monaco is also known for such automobile racing events as the Monte Carlo Rally and the Monaco Grand Prix.
The towns of Monaco and Monte Carlo sit on cliffs overlooking the Mediterranean. Monaco is the capital. Prince Albert II rules from a castle, part of which was built in the 1200’s. Monaco’s official language is French. The citizens of Monaco are called Monegasques.
Government.
Monaco is a constitutional monarchy. The monarch represents Monaco in international affairs, including the signing of treaties. A minister of state, chosen by and under the authority of the monarch, heads the government. The minister must be a French citizen. Government councilors—who are responsible for finance, police and internal affairs, and public works—assist the minister of state. The 24-member National Council shares the legislative powers with the monarch. Citizens of Monaco elect National Council members to five-year terms. The council must approve changes in Monaco’s Constitution.
People.
Only about a fifth of the people who live in Monaco are citizens. About a fourth are French, about a fifth are Italians, and the remainder come from other countries. Many wealthy people become citizens of Monaco because its government does not collect income tax.
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Most people in Monaco speak French. Native residents converse in a dialect called Monegasque, which is based on French and Italian.
The state religion is Roman Catholicism, but the Constitution guarantees freedom of worship. Children from the ages of 6 to 16 attend Monaco’s primary and secondary schools. The country also has a music academy and other fine arts schools.
The Monaco government awards annual prizes for literature, music, and art. The famous Oceanographic Museum, founded by Prince Albert I, has a large aquarium and a laboratory for research. Monaco also has a prehistoric times museum, a zoo, and botanical gardens.
Garnier Hall in Monte Carlo presents performances of opera, ballet, and orchestral music. Leading conductors and soloists perform with Monaco’s national orchestra.
Land.
Monaco lies at the foot of Mount Agel, which stands mainly in France. In places, Monaco stretches only 200 yards (180 meters) inland from the Mediterranean.
Monaco has four distinct parts—three towns and a small industrial area. Monaco, the old town and former fortress, stands on a rocky point 200 feet (61 meters) high. It is dominated by the royal palace. Monte Carlo has the famous gambling casino, the opera house, hotels, shops, beaches, and swimming pools. La Condamine, a port area, lies between the towns of Monaco and Monte Carlo. The industrial zone, called Fontvieille, lies west of the town of Monaco.
The country has a mild winter climate, with an average January temperature of 50 °F (10 °C). Summer temperatures rarely exceed 90 °F (32 °C). On the average, rain falls only 62 days a year.
Economy.
Many foreign companies have headquarters in Monaco because of the low tax rates. Monaco’s banks and financial service companies cater to these businesses and to the country’s many wealthy residents.
Monaco attracts visitors from all parts of the world, and tourism contributes much to the economy. A company called the Societe des Bains de Mer, which is partly owned by the government, operates casinos and most of the hotels, clubs, beaches, and other places of entertainment. 
Monaco’s leading products include chemicals, cosmetics, electronics, pharmaceuticals (medicinal drugs), plastics, and processed foods. Much of the manufacturing takes place in the Fontvieille district. Monaco’s colorful postage stamps are popular with collectors and are a significant source of the country’s income.
Monaco has a local bus service. The main highway on the coast passes through Monaco, carrying motorists between France and Italy. A railroad connecting France and Italy also runs through Monaco. The country transmits its own radio and television programs. Its television transmitter is on top of Mount Agel, in French territory.
History.
Archaeologists have discovered much evidence, including remains and tools, of early peoples in the area. Phoenicians from the eastern Mediterranean probably settled in Monaco in about 700 B.C. In Greek and Roman times, Monaco was an important trading center, and its harbor sheltered ships from many lands.
Ruling families from Genoa, in northern Italy, gained control of Monaco in the A.D. 1100’s. They built the first fort there in 1215. The Grimaldi family began ruling Monaco in 1297. They lost control in 1301 but regained it in 1331. The family first allied itself with France. During the early 1500’s to mid-1600’s, the Grimaldis turned to Spain for protection. Palace revolts and violence marked this period in Monaco’s history. Prince Jean II was murdered by his brother Lucien in 1505. Lucien was later murdered by a relative. Prince Honore I was drowned by some of his subjects during a revolt in 1604.
France seized control of Monaco in 1793, during the French Revolution. In 1814, the Congress of Vienna restored control to the Grimaldi family under the protection of Sardinia. Sardinia gave Monaco back to France in 1860. In 1861, France kept half of the territory but granted independence to the rest of Monaco.
The princes of Monaco ruled as absolute monarchs until 1911, when Prince Albert I approved a new Constitution. Prince Albert did important marine research and was known as the Scientist Prince. Prince Louis II ruled from 1922 until 1949, except for the German occupation during World War II. His grandson Prince Rainier III succeeded him. In 1956, Rainier married the American motion-picture star Grace Kelly, who took the title of Princess Grace. They had two daughters and a son.
In 1959, Prince Rainier dissolved the National Council and appointed a National Assembly. In 1962, under pressure from France, he restored the National Council and granted Monaco a new Constitution. The Constitution provided votes for women and abolished the death penalty. In 1963, under pressure from France, Monaco taxed business profits for the first time.
In the late 1900’s, Monaco expanded its size by reclaiming land from the sea. In 1982, Princess Grace died following an automobile accident. Monaco joined the United Nations in 1993. In 1997, the country celebrated 700 years of rule by the Grimaldi family.
In 2002, Monaco revised its Constitution to allow the throne to pass to the reigning monarch’s brothers or sisters and their descendants if the monarch died without a legitimate heir. Previously, only the monarch’s children or their descendants could inherit the throne. Prince Rainier died in 2005. He was succeeded by his son, who took the title Prince Albert II.
