5 Smallest Countries of World - 2. Monaco



Size: 0.8 sq. mi. (1.96 km²)
Population: 35,657 (2006 estimate)
Location: French Riviera on the Mediterranean


Monaco is the second smallest country on Earth (it's roughly the size of New York's Central Park), yet it's the most densely populated (23,660 people per km²). Actually, Monaco used to be much smaller than it is now - about 100 acres were reclaimed from the sea and added to its land size. At the narrowest, Monaco is only 382 yards wide!
The Principality of Monaco, its formal name, means that the territory is ruled by a prince. For the last seven centuries, Monaco was ruled by princes of the Grimaldi family from Genoa. (The whole thing started one night in 1297 when François Grimaldi disguised himself as a monk and led a small army to conquer the fortress guarding the Rock of Monaco. The coat of arms of the Grimaldi bears the image of monks with swords!) Now, the Prince shares legislative authority with a National Council. In 1861, Monaco relinquished half of its territory to France in exchange for cash and independence. When the reigning prince realized that most of Monaco's natural resources were on the land that got bartered away, he decided to bet the whole economy on … what else, gambling (see, casinos aren't only for American Indians, it's a time-tested, universal solution!) And so began Monte Carlo, a region of Monaco well known for its glamorous casinos (a setting for Ian Fleming's first James Bond Novel Casino Royale) and its Formula One Grand Prix.

In 1918, Monaco entered a treaty with France for military protection - the treaty, however, also stipulated that Monaco would lose its independence (and become French) should the reigning Grimaldi prince died without leaving a male heir! When Prince Rainier III took over, he was a bachelor and most Monegasques (that means people of Monaco) were gloomy about the country's future. However, he ended up marrying Hollywood actress Grace Kelly - the marriage not only produced a male heir, it also helped burnish Monaco's image as a glamorous place to be for the wealthy. (Monaco can rest easy now, a new treaty with France stated that the Principality will remain independent even without a male heir). For a long time, Monaco had no income taxes and was a tax haven for wealthy foreigners and international corporations. This caused a unique thing about Monaco's population: most of its residents are not native - in fact, only about 1 in 5 people are native Monegasques. After a long dispute with France, Monaco started to impose income taxes on all of its residents who are not born there. Its natural citizens are forbidden from entering casinos, but to make up for it, they do not have to pay any income taxes.

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