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Despite recessions hitting countries around the world, with economic fallout reaching peak levels as a result of the coronavirus pandemic and subsequent lockdown, Monaco’s residents have largely avoided the COVID-19 storm. Forecasters initially expected the state itself to face an economic disaster. Its economy largely revolves around tourism, but with social distancing in place, events such as the Grand Prix and Céline Dion’s Monte Carlo performance have been cancelled.
Yet, the strong performance of global financial markets has in many cases increased the wealth of Monaco’s ultra-wealthy.
Its protected and unique economy – residents do not pay income tax and have wide-ranging surveillance protection – has translated to some 37,000 residents trading their portfolios; it is capitalism being practiced at its best.
Interesting, however, is how the principality cradles its people in a system more similar to a communist state.
The details of Prince Albert of Monaco’s nannying were revealed during the BBC’s documentary ‘Inside Monaco: Playground of the Rich’.
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State aid is reserved for the 8,000 Monegasque – those who have Monaco citizenship.
Albert has stepped in to provide Monegasque with subsidised rent and free healthcare, and, as he explained: “It’s always been a feature of the principality of Monaco to have a small national population, but it’s really part of our make-up and part of what we are.
“Monegasques are a minority in their own country, but we live in perfect harmony with all the other nationalities that call Monaco their home.”
Monegasque are also rewarded priority over the 120 nationalities jostling for space which, in a principality only slightly bigger than London’s Hyde Park, comes at a premium.
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The average property in Monaco costs around £45,000 per square metre.
This is twice the amount you’d pay for a flat in Mayfair – one of London’s most expensive locations.
Citizens of Monaco pay less than a third of the market value to live in the principality – while the state pays the rest.
The state owns various properties throughout the country, with controlled rents for Monegasques.
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This is similar to the way the Soviet Union operated, as the state provided citizens with permanent housing at more or less the same subsidised cost regardless of where they lived.
The difference in Monaco, however, is the private sector.
Should citizens wish to rent in the private sector, Albert’s government provides rental subsidies based on income, making sure the rent is not more than a third of our income.
The status is only afforded to a select few, with the easiest ways of becoming Monegasque through birth or marriage.
Previously, you had to be married to a Monegasque for ten years before meeting the eligibility criteria.
However, citizenship through marriage in November last year was extended from ten years to 20 as Albert grapples with the task of reversing Monaco’s “unsustainable” future.
Population increase and lack of land is the main driver for the policy amendment.
Although the state is embarking on several land grab projects, including taking up 15 acres of the Mediterranean sea in order to build an artificial land development that will increase the country’s size by three percent.
While Monegasque are largely free to choose where they live in Monaco and still receive the rental subsidies, those living in the Soviet Union were far more restricted in their choices.
Housing in cities belonged to the government, with properties disttributed by the municipal authorities or by government departments based on an established number of square meters per person.
As a rule, tenants had no choice in the housing they were offered
However, utilities like water and electricity did not form a significant part of a family’s budget as they were subsidised by the government.
People’s access to housing largely resided on their position in society and their place of work.
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