Cablegate: A New Era for Monaco?

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A

Summary: Shortly before his enthronement on November 17, Prince
Albert II of Monaco signed a new bilateral convention with
President Jacques Chirac. This new treaty will permit more
efficient legal, financial and administrative cooperation
between the two countries and will also clear up ambiguities
about the sovereignty of the Principality. One result will be
that Monaco will now accredit Ambassadors. Heir of one of
Europe's longest reigning royal families which traces its
origins back to the 12th century, Prince Albert intends to focus
his modernizing efforts on transforming Monaco into a major
banking center while combating money-laundering. End Summary.

1. Prince Albert II of Monaco was officially enthroned on
November 17 and the several days of festivities that followed
coincided with Monaco's National day. Prince Albert assumed
royal powers upon his father's death in April and was sworn in
as Monaco's head of state on July 12. The solemn investiture
ceremony of November 17 completed the formal process of
succession. Albert is a resolutely modern prince who is focused
on the future of his tiny principality (which is smaller than
New York's Central Park). If he shares his father's vision for
the future of Monaco, he plans on ruling his country more like a
manager and will be less conservative. Prince Albert wants to
give a modern image of Monaco as a "model country" involved in
environmental protection and sustainable development. Another
of his priorities will be to fight against Monaco's reputation
as a money-laundering country and non-cooperative tax haven.
Since his ascension to the throne in July, Prince Albert has
almost totally restructured his cabinet and gave key positions
to men of his age, some of whom are childhood friends. Jean-Luc
Allavena, a brilliant businessman, recently became his director
of cabinet, and Franck Biancheri, Finance Minister, became
ambassador plenipotentiary (i.e., the number two government
official) on November 10. Colonel Serge Lamblin, the
Chamberlain, is also being moved aside for newer blood.

2. The enthronement was preceded by the signature, on November
8, of a new convention between France and Monaco. For his first
official visit to France as Monaco's head of state, Prince
Albert met with President Jacques Chirac to sign a revised
version of the 1930 bilateral Franco-Monegasque convention.
After a private meeting during which the two men discussed
environmental issues and global warming, they ratified three
agreements which provide for greater cooperation on
administrative, judicial, and financial legislation. This
historic treaty will allow Monaco to recover full sovereignty
and will also call for more balanced bilateral relations between
the two countries.

3. These new agreements will deeply transform the Monegasque
administration as they will allow Monaco to reaffirm its
independence from France, particularly in the civil service.
Before the ratification of the new convention, important
government positions in Monaco could only be held by French
citizens. Now they will be held by Monegasques who will be
appointed by the Prince. The Prince will be able to choose his
own Minister of State--the de facto Prime Minister--instead of
approving a French government official. These agreements will
also permit the Monegasques to have access to any position in
the French civil service. Moreover, they will increase Monaco's
ability to conduct its own foreign relations, i.e., other
countries will be free to open embassies in the Principality, as
will soon be the case for France. Monaco will then accredit
ambassadors instead of consuls.

4. Judicial cooperation will be more in accordance with
European standards. Joint investigation teams, videoconference
hearings, transfers of prisoners and the speeding up of warrants
for arrests procedures will constitute the basis of new judicial
and penal cooperation.

5. As for financial cooperation, all Monegasque banking centers
will offer the same guarantees to their investors as in any
other European country. This means that these credit
institutions will follow the same European laws, which implies
the end of bank secrecy and greater financial openness.

6. Prince Rainier, known as "the builder Prince", was credited
with transforming Monaco into an international tourist, banking
and business services center during 56 years of rule. Under his
reign, the economy of the Principality greatly expanded. With
more than 60 banks and financial institutions that administer 65
billion euros in assets, Monaco is a financial center that
cannot be ignored. However, its reputation as a tax haven is a
serious obstacle for Prince Albert who has expressed a
commitment to financial ethics and openness as one of the themes
for his new reign. As his new Finance Minister Franck Biancheri
recently said, "We have done what was necessary to make Monaco
one of the most important international financial centers."

7. Comment: Prince Albert, who is half-American by his mother,
Princess Grace Kelly, seems to be putting the management
expertise he learned in the U.S. to use in a deliberate but
committed fashion as he completes the process of taking power.
Although until accredited CG Marseille can only observe events
from afar, it is clear that the Prince has a plan, and his early
steps have been sure-footed. Once accredited, CG Marseille will
seek further details on what the "manager Prince" has in store
for Monaco. End Comment.

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