No Céline Dion concert in front of the Monte Carlo casino, no Formula One Grand Prix racing cars tearing through the streets, no boat show to display the latest superyachts to billionaire buyers, and no Masters tennis tournament — it would be reasonable to conclude that the coronavirus pandemic has crippled Monaco’s tourism-dependent economy in 2020.
Jean Castellini, finance minister of this 2 sq km principality on the French riviera, is certainly forecasting a recession and preparing to dip into a €5bn sovereign wealth fund carefully built up over the years. He said that 2020 “will be the first time we have a budget deficit” in his eight years in the job.
What is true of the local economy, however, is not necessarily true of the wealthy entrepreneurs and sports stars — among Britons they include the retail tycoon Philip Green, Jim Ratcliffe of chemicals group Ineos and racing driver Lewis Hamilton — who have made the tax haven of Monaco their home.
“When the world is so affected [by Covid-19] we have no right to rejoice,” said one private banker. “But we will have a very good year.” Sales of Monaco’s notoriously expensive apartments are also holding up.
The pandemic has plunged economies into recession but the strong performance of global financial markets has in many cases increased the wealth of the ultra-rich, and highlighted the attractions of bolt-holes such as Monaco that promise personal safety through strict policing and video-surveillance as well as financial protection and excellent healthcare.
Confined to their homes in a coronavirus lockdown in the spring, the wealthy foreigners among Monaco’s 37,000 people spent much of their time frantically trading their portfolios.
Hervé Ordioni, who heads a committee for the promotion of Monaco as a financial centre and is also chief executive of the local operation of Edmond de Rothschild, said his staff had to deal with six times as much trading as normal during the lockdown. “It was massive,” he said. “We had an unbelievable amount of activity.”
The superyacht sector on which Monaco partly depends is humming too. Down at the Yacht Club de Monaco, naval architect Espen Oino, who moved to the principality in 2006, shows off his design work on the newly built REV Ocean, a 183-metre vessel for Norwegian tycoon Kjell Inge Rokke that will be fitted out as the world’s biggest private superyacht and will double as an ocean laboratory and exploration ship.
Tied up on the jetty outside is another unusual exploration-type luxury superyacht — the high-bowed shape is based on vessels serving oil rigs in the roughest seas — the Oino-designed Olivia O built for the multibillionaire and Monaco resident Eyal Ofer, the Israeli shipping magnate.
Bernard d’Alessandri, secretary-general of the yacht club, says the pandemic has severely disrupted the Mediterranean charter business this season — superyachts can cost as much as $1m a week to rent — but sales are holding up because the very wealthy can still afford to buy and are increasingly searching for “a place of refuge” in uncertain times.
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“The crisis will change things. Yachts will be used differently,” he said, predicting they would become more practical and less of a “show-off” purchase. “You can use yachts as offices and the whole family can be there.”
Prince Albert II, the Monaco sovereign, this week launched the latest phase of a digitalisation programme that will add data security and high-tech services to the attractions of a place better known in the past for the casinos and hotels run by the Société des Bains de Mer.
“Monaco has always focused on security of assets and personal security, and in tomorrow’s world we need data security,” Mr Ordioni said.
Frédéric Genta, who has worked for Google and Amazon in the past and is in charge of the digital transition, said that with the help of Amazon Web Services Monaco “will become the first European country to have a sovereign cloud” and so add to its allure as a haven for the wealthy.
“If you’re a billionaire after Covid, you say, ‘I’m going to reshuffle my options. In which country do I want to live when it happens again?’ Most people’s net worth has not been affected, but their mindsets have been affected. They say, ‘If I’m sick can I still be treated? I want to make sure I can still run my business . . . I’m paying a price here, I want to make sure I’m risk-free’.”