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European Union vs. Monaco

Economy

European UnionMonaco
Economy - overview

The 27 member states that make up the EU have adopted an internal single market with free movement of goods, services, capital, and labor. The EU, which is also a customs union, aims to bolster Europe's trade position and its political and economic weight in international affairs.

 

Despite great differences in per capita income among member states (from $28,000 to $109,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency - the euro - circulates among 19 of the member states that make up the European Economic and Monetary Union (EMU). Eleven member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Since 2004, 13 states acceded to the EU. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; seven other member states - excluding Denmark, which has a formal opt-out - are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.

 

The EU economy posted moderate GDP growth for 2014 through 2017, capping five years of sustained growth since the 2008-09 global economic crisis and the ensuing sovereign debt crisis in the euro zone in 2011. However, the bloc's recovery was uneven. Some EU member states (Czechia, Ireland, Malta, Romania, Sweden, and Spain) recorded strong growth, others (Italy) experienced modest expansion, and Greece finally ended its EU rescue program in August 2018. Overall, the EU's recovery was buoyed by lower commodities prices and accommodative monetary policy, which lowered interest rates and stimulated demand. The euro zone, which makes up about 70% of the total EU economy, performed well, achieving a growth rate not seen in a decade. In October 2017 the European Central Bank (ECB) announced it would extend its bond-buying program through September 2018, and possibly beyond that date, to keep the euro zone recovery on track. The ECB's efforts to spur more lending and investment through its asset-buying program, negative interest rates, and long-term loan refinancing programs have not yet raised inflation in line with the ECB's statutory target of just under 2%.

 

Despite its performance, high unemployment in some member states, high levels of public and private debt, muted productivity, an incomplete single market in services, and an aging population remain sources of potential drag on the EU's future growth. Moreover, the EU economy remains vulnerable to a slowdown of global trade and bouts of political and financial turmoil. In June 2016, the UK voted to withdraw from the EU, the first member country ever to attempt to secede. Continued uncertainty about the implications of the UK's exit from the EU (concluded January 2020) could hurt consumer and investor confidence and dampen EU growth, particularly if trade and cross-border investment significantly declines. Political disagreements between EU member states on reforms to fiscal and economic policy also may impair the EU's ability to bolster its crisis-prevention and resolution mechanisms. International investors' fears of a broad dissolution of the single currency area have largely dissipated, but these concerns could resurface if elected leaders implement policies that contravene euro-zone budget or banking rules. State interventions in ailing banks, including rescue of banks in Italy and resolution of banks in Spain, have eased financial vulnerabilities in the European banking sector even though some banks are struggling with low profitability and a large stock of bad loans, fragilities that could precipitate localized crises. Externally, the EU has continued to pursue comprehensive free trade agreements to expand EU external market share, particularly with Asian countries; EU and Japanese leaders reached a political-level agreement on a free trade agreement in July 2017, and agreement with Mexico in April 2018 on updates to an existing free trade agreement.

Monaco, bordering France on the Mediterranean coast, is a popular resort, attracting tourists to its casino and pleasant climate. The principality also is a banking center and has successfully sought to diversify into services and small, high-value-added, nonpolluting industries. The state retains monopolies in a number of sectors, including tobacco, the telephone network, and the postal service. Living standards are high, roughly comparable to those in prosperous French metropolitan areas.

The state has no income tax and low business taxes and thrives as a tax haven both for individuals who have established residence and for foreign companies that have set up businesses and offices. Monaco, however, is not a tax-free shelter; it charges nearly 20% value-added tax, collects stamp duties, and companies face a 33% tax on profits unless they can show that three-quarters of profits are generated within the principality. Monaco was formally removed from the OECD's "grey list" of uncooperative tax jurisdictions in late 2009, but continues to face international pressure to abandon its banking secrecy laws and help combat tax evasion. In October 2014, Monaco officially became the 84th jurisdiction participating in the OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters, an effort to combat offshore tax avoidance and evasion.

Monaco's reliance on tourism and banking for its economic growth has left it vulnerable to downturns in France and other European economies which are the principality's main trade partners. In 2009, Monaco's GDP fell by 11.5% as the euro-zone crisis precipitated a sharp drop in tourism and retail activity and home sales. A modest recovery ensued in 2010 and intensified in 2013, with GDP growth of more than 9%, but Monaco's economic prospects remain uncertain.

GDP (purchasing power parity)$19,885,625,000,000 (2019 est.)

$19,551,328,000,000 (2018 est.)

$19,115,988,000,000 (2017 est.)

note: data are in 2017 dollars
$7.672 billion (2015 est.)

$7.279 billion (2014 est.)

$6.79 billion (2013 est.)

note: data are in 2015 US dollars
GDP - real growth rate2.3% (2017 est.)

2% (2016 est.)

2.3% (2015 est.)
5.4% (2015 est.)

7.2% (2014 est.)

9.6% (2013 est.)
GDP - per capita (PPP)$44,436 (2019 est.)

$43,761 (2018 est.)

$42,848 (2017 est.)

note: data are in 2017 dollars
$115,700 (2015 est.)

$109,200 (2014 est.)

$101,900 (2013 est.)
GDP - composition by sectoragriculture: 1.6% (2017 est.)

industry: 25.1% (2017 est.)

services: 70.9% (2017 est.)
agriculture: 0% (2013)

industry: 14% (2013)

services: 86% (2013)
Population below poverty line9.8% (2013 est.)

note: see individual country entries of member states
NA
Household income or consumption by percentage sharelowest 10%: 2.8%

highest 10%: 23.8% (2016 est.)
lowest 10%: NA

highest 10%: NA
Inflation rate (consumer prices)1.1% (2019 est.)

1.7% (2018 est.)

1.5% (2017 est.)
1.5% (2010)
Labor force238.9 million (2016 est.)52,000 (2014 est.)

note: includes all foreign workers
Labor force - by occupationagriculture: 5%

industry: 21.9%

services: 73.1% (2014 est.)
agriculture: 0%

industry: 16.1%

services: 83.9% (2012 est.)
Unemployment rate8.6% (2016 est.)

9.4% (2015 est.)
2% (2012)
Industriesamong the world's largest and most technologically advanced regions, the EU industrial base includes: ferrous and non-ferrous metal production and processing, metal products, petroleum, coal, cement, chemicals, pharmaceuticals, aerospace, rail transportation equipment, passenger and commercial vehicles, construction equipment, industrial equipment, shipbuilding, electrical power equipment, machine tools and automated manufacturing systems, electronics and telecommunications equipment, fishing, food and beverages, furniture, paper, textilesbanking, insurance, tourism, construction, small-scale industrial and consumer products
Industrial production growth rate3.5% (2017 est.)6.8% (2015)
Agriculture - productswheat, barley, oilseeds, sugar beets, wine, grapes; dairy products, cattle, sheep, pigs, poultry; fishnone
Exports$7,102,345,000,000 (2019 est.)

$6,929,845,000,000 (2018 est.)

$6,690,764,000,000 (2017 est.)

note: external exports, excluding intra-EU trade
$964.6 million (2017 est.)

$1.115 billion (2011)

note: full customs integration with France, which collects and rebates Monegasque trade duties; also participates in EU market system through customs union with France
Exports - commoditiesmachinery, motor vehicles, pharmaceuticals and other chemicals, fuels, aircraft, plastics, iron and steel, wood pulp and paper products, alcoholic beverages, furniturejewelry, perfumes, watches, packaged medicines, plastic products (2019)
Exports - partnersUnited States 20.7%, China 9.6%, Switzerland 8.1%, Turkey 4.4%, Russia 4.1% (2016 est.)

Italy 19%, Germany 14%, United Kingdom 9%, Switzerland 9%, Spain 8%, United States 6%, Belgium 5%

(2019)

Imports$6,649,513,000,000 (2019 est.)

$6,400,412,000,000 (2018 est.)

$6,177,446,000,000 (2017 est.)

note: external imports, excluding intra-EU trade
$1.371 billion (2017 est.)

$1.162 billion (2011 est.)

note: full customs integration with France, which collects and rebates Monegasque trade duties; also participates in EU market system through customs union with France
Imports - commoditiesfuels and crude oil, machinery, vehicles, pharmaceuticals and other chemicals, precious gemstones, textiles, aircraft, plastics, metals, shipsjewelry, recreational boats, cars and vehicle parts, watches, general wares (2019)
Imports - partnersChina 20.1%, United States 14.5%, Switzerland 7.1%, Russia 6.3% (2016 est.)Italy 34%, Switzerland 16%, Germany 9%, United Kingdom 7% (2019)
Debt - external$29.27 trillion (31 December 2016 est.)

$28.68 trillion (31 December 2015 est.)

 NA

Exchange rateseuros per US dollar -

0.885 (2017 est.)

0.903 (2016 est.)

0.9214 (2015 est.)

0.885 (2014 est.)

0.7634 (2013 est.)
euros (EUR) per US dollar -

0.885 (2017 est.)

0.903 (2016 est.)

0.9214 (2015 est.)

0.885 (2014 est.)

0.7634 (2013 est.)
Fiscal yearNAcalendar year
GDP (official exchange rate)$17.11 trillion (2017 est.)$6.006 billion (2015 est.)
Taxes and other revenues45.2% (of GDP) (2014)14.9% (of GDP) (2011 est.)
Budget surplus (+) or deficit (-)-3% (of GDP) (2014)-1% (of GDP) (2011 est.)
Unemployment, youth ages 15-24total: 16.8%

male: 16.8%

female: 16.9% (2019 est.)
total: 26.6%

male: 25.7%

female: 27.9% (2016 est.)

Source: CIA Factbook