monaco, officially the principality of monaco (french: principauté de monaco), is the second smallest country in the world after the vatican city; approximately 39,000 persons live there. it is near south-eastern france, on the mediterranean sea in western europe. french is the most common language spoken in monaco. the sovereign prince of monaco, who is the head of state, is prince albert ii, whose family has ruled since 1297. the government and the prince share power. tourism is the main industry. people in monaco pay no income tax. monaco is a city-state, because all its territory is urban and built-up. france, genoa and sardinia have ruled it at various times.