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Monaco, small independent principality of Europe, forming an enclave in southeastern France, bordered on the south by the Mediterranean Sea and surrounded on the north, east, and west by the French department of Alpes-Maritimes. The principality, which lies east of Nice, is a famous resort. The country is 1.95 sq km (0.75 sq mi) in area. The population in the 1982 census was 29,876, and the 2001 estimate was 31,842. Monaco has one of the highest population densities of any country in the world, 16,329 persons per sq km (42,293 per sq mi). The principality is composed of four districts: Monaco, the capital; La Condamine; Monte Carlo; and Fontvieille. The official language of the country is French, although a number of people speak Monégasque, a mixture of French and Italian. Italian and English are also spoken. The commune of Monaco, located on a rocky promontory, is an ancient fortified town. Among its points of interest are a cathedral, a palace in the medieval and Renaissance styles, and an oceanographical museum, established in 1910 by Prince Albert I. The Monte Carlo Opera and Monte Carlo Philharmonic Orchestra are here; the Monaco Grand Prix and Monte Carlo Rally are popular annual automobile-racing events.

The principal occupations in Monaco are connected with the tourist trade, the economic foundation of the state. The sale of postage stamps and tobacco, banking and insurance, and the manufacture of pharmaceuticals and chemicals, electronic equipment, cosmetics, paper and cards, clothing and textiles, and plastic goods are also of economic importance. In 1993 the gross domestic product, which measures the total value of goods and services produced in the country, was $558 million. A major source of revenue is the great gambling casino at Monte Carlo. The economy of Monaco relies heavily on migrant labor, mainly from France and Italy. Monaco�s principal unit of currency is the French franc, consisting of 100 centimes (6.16 francs equal U.S.$1; 1999 average).

A new constitution greatly reducing the power of the sovereign was granted to the principality of Monaco by Prince Rainier III in 1962. Legislative authority is shared by the prince and the National Council of 18 members, elected by universal suffrage for 5-year terms. The executive branch consists of the prince and a small Council of Government headed by a minister of state who is traditionally French. The leading political party is the National and Democratic Union.