An article from the Scotsman today:
Can medieval Monaco survive the 21st century?
MORT ROSENBLUM IN MONACO
IN A quirk of time and space, a motorist can leave France’s A8 motorway near Nice and, without seeing so much as a welcome sign, downshift into a jet-age version of the 12th century.
But the 900-year-old enclave of Monaco is an anachronism at risk as a different sort of Europe takes shape. Medieval Monaco, with its storybook palace looming on a rock above the high-roller casino of Monte Carlo, is in some danger of melting away into France.
Rainier III, the ramrod-straight prince who spent 50 years turning an oddment of history on a speck of barren Riviera coast into a sparkling hideout for the eccentric rich, is 81 and ailing.
For three weeks, he was treated in hospital for "general fatigue" and then spent 12 more days in the hospital for what the palace described as heart problems.
Rainier’s son, Albert, is heir apparent. Though shy and retiring at 46, he is nonetheless popular in the tiny principality.
Still, the world is changing quickly around Monaco. Its French neighbours now belong to a 25-nation European Union bent on eradicating old anomalies. To survive, it is likely to need a tough-minded ruler.
For many close to the inner circle, such as Nadia Lacoste, Albert is plainly up to the job. Lacoste was palace spokeswoman in the heady days of Princess Grace, the actress Grace Kelly, who died in 1982. "Albert will be a wonderful prince," she said. "On his own, he’ll show a dynamic personality and effective leadership."
Other insiders expect Albert to withdraw from public life, although none agree to be named, fearing regal wrath.
If the unmarried prince has no heir, or steps aside, his sister Princess Caroline of Hanover is next in line. Then comes Stephanie, a photographers’ favourite for her serial rebellious liaisons.
French authorities refuse comment on the status of Monaco, but a message was sent in 1962, when President Charles de Gaulle resolved an economic dispute with a bald show of force, and Rainier backed down in a face-saving compromise.
Monaco’s independence is in many ways a state of mind. It issues passports and postage stamps. An elected legislative council drafts bills for the prince to sign. The principality belongs to the United Nations.
But even before the EU abolished checks at French road borders, visitors breezed into Monaco without realising it. The currency is now the euro. And Monaco’s prince chooses his prime minister from among three Frenchmen picked in Paris.
Quietly but increasingly, people speculate that a future French government will be tempted to exert sovereignty in the absence of a strong leader.
Certainly, Rainier’s shoes will be hard to fill. The prince has spent most of his life remaking Monaco. In the 1950s, he wooed and wed Grace Kelly at the peak of her Hollywood fame, taking the little state into the realm of fairytale. When the princess died on a hairpin bend on the road from Nice, he channelled his grief into yet more public works.
Still tiny, with a population of 32,000 that includes only 7,000 citizens, Monaco grew by 20 per cent on reclaimed land.
After high-rise flats climbed up the mountainside, builders dug deep for underground office space and more parking for Ferraris and Lamborghinis.
Old Monaco, atop its rocky bluff, takes in the turreted stone palace, the cathedral where Grace’s remains are entombed, and a few narrow cobbled streets of ministries and tourist shops.
Monte Carlo lies below, spreading beyond a small port choked with the giant white yachts of European industry kings and Middle Eastern potentates.
Official estimates put the gross domestic product near 750 million (£500 million), making per capita income of more than 22,500 among the world’s highest.
France has urged Monaco to crack down on money laundering, and EU authorities have pressed for a loosening of bank secrecy. In December, the Organisation for Economic Co-operation and Development (OECD) named only five countries as unco-operative tax havens: Andorra, Liberia, Liechtenstein, the Marshall Islands and Monaco.
Monaco’s government clearly feels a need to adapt to this new European order.
Also, it needs a broader tax base. "Without doubt, we must diversify, bring in new industries and businesses that go beyond casinos and tourism," said Frank Biancheri, the economy minister.
The old attraction is waning. Perpetually jammed traffic dampens the Mediterranean mood. Prices are high.
After Italy allowed its countrymen to repatriate questionable fortunes, 5,000 people moved home to Italy.
Monaco’s character has changed dramatically. "Visitors came for an entire season," said Jacques Ferreyrolles, 83, whose family has run the Balmoral Hotel since 1896. "They had style, a sense of class. Now they just come and go in a few days ... The Americans now, they don’t even change for dinner."
For many Monegasques, the Royal mystique is also wearing thin. Caroline’s third husband, Prince Ernst August of Hanover, has been in trouble for punching a German photographer and a hotel owner. Stephanie, with two children born out of wedlock, periodically scandalises Monaco.
On the streets, opinions are mixed. Some are rude about their royalty. Others are enthusiastic.
But nearly everyone defines the principality by its prince, Lucie Rinaldi, a shipchandler at the old port for 40 years, shrugged when asked about a future after Rainier.
"We don’t know much about what happens up on the Rock. But we know what he has done for Monaco. We will miss him and, whatever does happen next, the place won’t be the same."