Prince Albert II of Monaco – Dennis Van Tine / STAR MAX / IPx / AP /
“The gravity of the situation requires rigorous financial management for the purpose of reducing overall government spending.” Prince Albert II of Monaco decided to cut the operating budget of the Prince’s Palace by 40% in the face of the “unprecedented economic consequences” of
the new coronavirus epidemic.
The allocation “goes from 13.2 million euros to 8 million euros,” said the Principality in a press release this Wednesday. On Tuesday, the National Council voted an amending budget for the state in deficit for the 2020 financial year of some 477 million euros.
The cause was an anticipated drop in revenue of around 175 million euros, mainly linked to a fall in VAT, and exceptional expenditure of around 300 million euros. The original budget, at breakeven, was 1.5 billion euros.
A five billion euro reserve fund
The extraordinary expenditure was incurred to finance partial unemployment measures, assistance for low wages and the allocation of an extraordinary minimum income of 1,800 euros to all self-employed workers who request it.
In the Principality there is no direct taxation or possibility of recourse to debt, but the State has set up a reserve fund in the amount of five billion euros. The Prince claims to have “full confidence in the solidity of the Principality’s economic and social model to overcome this health crisis with unprecedented economic consequences”. Monaco has declared containment until May 3.
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