The future of Monaco

The end of the fairy tale
Prince Rainier gave the tiny principality of Monaco a lasting legacy — a superpower lifestyle and, in the shape of his marriage to Grace Kelly, Hollywood glamour. Brian Moynahan looks back on his reign and ponders what the future holds for his son, Albert
Ruling has been the life skill of the Grimaldis since their ancestor François the Spiteful seized Monaco by subterfuge in 1297. The big predator dynasties are mostly gone since then, swallowed up by one another and by republicans. At the bottom of the food chain, elegant and vibrant minnows, the Grimaldis remain. A lust for survival and an eye for detail are essentials. So is the nerve to treat with a much larger foe — General de Gaulle, for example — using surprise and panache to make up for lack of weight.

Prince Rainier III, who died earlier this month, had these qualities in plenty. They were evident even at his birth. Under a treaty with France, the principality would be annexed if the Grimaldis had no heir. This was no idle threat. Monaco was taken over by French revolutionaries in 1793. The Grimaldis did not get it back until 1814.

The neighbouring towns of Menton and Roquebrune, once part of the principality, were seized by a fresh set of malcontents in 1949. Much to the chagrin of their taxpaying descendants, they remain French.

Rainier's grandfather, Louis II, had a natural daughter by Marie Louvet, a laundry maid, while serving as a young officer in Algeria, but no legitimate offspring. To keep the French at bay, the constitution was changed in 1918 so that the prince could adopt Charlotte, the love child. The French president and foreign minister were invited to the adoption ceremony. Refusal would cause a diplomatic incident. Acceptance implied French approval. They attended. Charlotte then married Pierre, Comte de Polignac. Rainier was their son. At a stroke, dynasty and independence were preserved.

A fresh lesson in realpolitik followed. Rainier was just six in 1929 when his parents divorced. His grandfather promptly disinherited his father. Rainier's own son, Prince Albert, is the 34th Grimaldi to rule. He was trained from his teens to run the mini-principality with the superpower lifestyle.

Monaco is the size of a goodish farm, 481 acres, 100 of them reclaimed from the sea by Rainier. It has 32,000 residents, only 6,000 of them Monègasques. Yet it packs a mighty punch. The annual GDP is £6.3 billion. It has its own philharmonic orchestra, opera and ballet, and stages the year's most dramatic Grand Prix. A S Monaco is a European Champions League football team.

Pre-Rainier, the casino and a clutch of grand hotels kept Monaco's head above water. It booms now with 45 banks in its offshore finance industry, and conventions and real estate. Its profusion of tax exiles has pockets deep enough to snap up trifles like an £8,083 bottle of 1982 Pètrus at the Hôtel de Paris or a £9.3m three-bedroom apartment.

As the new proprietor, Albert has one visible fault. At 47, though his sisters Caroline and Stèphanie have seven children and five marriages between them, he remains unmarried. As his father remarked with some frustration, he has failed thus far "de se donner une descendance", to get himself an heir. He may do so now — "I've never said I won't marry or that I don't want children," he says, "and I want to taste this happiness" — and anyway, Caroline's children can succeed him. His sisters, too, have acted as sacrificial anodes for the press and the telephoto lens. Caroline has appeared on 99 covers of Paris-Match, and Stèphanie on 67. Albert, respectable, hard-working, balding, causes no scandals and spills no ink.

After school in Monaco, he read political sciences at Amherst College in Massachusetts — his mother was Philadelphia Irish — before re-establishing his Francophone credentials as an ensign on the French helicopter carrier Jeanne d'Arc. Stints in businesses relevant to Monaco followed: merchant banking, international law and luxury branding and marketing. Albert is a judo black belt, a modern pentathlete, and steered the national bobsleigh in five Winter Olympics. "He is diplomatic by nature. He seeks consensus," Bernard Fautrier, a government minister, summed him up. "It isn't his style to bang on the table. He hears everyone and then takes decisions and sticks to them." That's the rub. The real world has Prince Charmings for breakfast. Rainier said that his son had "a sole fault". "He's too nice," he said, "and he finds it difficult to say no. In this business you have to know how to refuse."

Rainier was, in the best sense, a Machiavellian prince. His passion was that "our state must be seen by all as sovereign, independent and neutral". Vichy-appointed officials and Nazi money-laundering had tainted his grandfather's wartime regime. Rainier distanced himself by volunteering for the French army in 1944, winning a Croix de Guerre for bravery. His first act as ruler in 1949 was to renegotiate building contracts, excluding the criminal element that dominated construction elsewhere on the Côte d'Azur.

His marriage to his Oscar-winning bride was a stunning success. It gave little Monaco global renown, and attracted a wave of tax exiles to enjoy the absence of personal taxes. Many were French. Irritated, de Gaulle threatened to "asphyxiate" it and cut off its water supply unless it adapted to French fiscal policy. Rainier refused to budge on the status of foreign and long-term French residents. He pointedly welcomed the US Navy to Monaco after it was blocked from French ports. Aristotle Onassis was another scalp. The Greek shipping magnate was the majority shareholder in the Sociètè des Bains de Mer (SBM), which controlled the casino and leading hotels. Onassis blocked Rainier's plans for developing the principality. Rainier brought in a law to create 600,000 shares in the SBM for the benefit of the Monaco state. The company was nationalised, and Onassis was left to lick his wounds.

The death of Grace in a car crash in 1982 left Rainier a grieving and rather isolated figure. But the drive for independence — and his sharp temper — remained constant. Later, President Mitterrand, on an official visit, was charmed by Princess Caroline into confirming his host's sovereignty over Monaco's territorial waters and airspace.

When a French parliamentary report accused Monaco of money-laundering, Rainier said it was motivated by "jealousy of the success of Monaco, of its standard of living, of its fiscal regime and its dynamism". He pointed out that the Bank of France has to agree to new banking operations in Monaco, and French officials fill the most sensitive civil-service posts, including that of chief minister. "It is time to dust off the treaties that link us with France," he thundered. "The prince must be able to nominate his choice of head of government. Monaco must be given back to the Monègasques. We're fed up being treated like drug dealers."

He took out global independence insurance by joining the United Nations in 1993. Membership of the Council of Europe followed last year. Rainier hailed this as "a new illustration of our international status". It is a principle of the council that all the public offices in a member state must be open to its citizens. Some powerful Monègasques were concerned that their privileges would be eroded by the human-rights legislation enshrined in the council.

Jean-Louis Campora, his one-time intimate, president of the local parliament and of A S Monaco, dragged his feet over the council. Rainier let his disfavour be known. Campora is no longer president of either.

That is how princes survive. As well as the stylishness and love of family, Albert has some canny but brutal behaviour to live down to.
Sunday Times Magazine