1.
G.V.PAN...MONACO PAN TO HARBOUR.
0.07

2.
L.V.PAN...PALACE.
0.13

3.
S.V. FLAG.
0.14

4.
S.V. TOURIST WRITING CARDS NEAR PALACE.
0.16

5.
C.U. OLD CANON.
0.18

6.
S.V. PHOTOGRAPH PALACE.
0.21

7.
L.V.RIOTERS...MONACO - NICE ROAD.
0.25

8.
S.V. POLICE MOTORCYCLE PATROL AT SIDE OF ROAD.
0.28

9.
T.V.G. RAILWAY RAPTURES.
0.33

10.
L.V. & S.V.PAN... OVERHEAD CABLES CARRYING ELECTRICITY PAN DOWN TO SUB-STATION.
0.41

11.
C.U. POSTBOX ON WALL.
0.44

12.
C.U. MONTE CARLO STAMP.
0.46

13.
ANGLE V...RADARS SKYSCRAPER BLOCK.
0.59

14.
L.V. OFFICE TO LET.
1.03

15.
G.V. HARBOUR.
1.07



Initials JRG/S/WS/GH


EDITORS: 2144/62 2415/62 6131/62 SOF REFER.

Script is copyright Reuters Limited. All rights reserved

Background: BORDERED ON THREE SIDES BY FRANCE, THE RIVIERA PRINCIPALITY OF MONACO FEARS AN ECONOMIC BLOCKADE AND THE POSSIBILITY OF A SHUTDOWN IN ITS LIGHT INDUSTRIES. AND TONIGHT (TUESDAY) IN THE LIGHT OF THESE FEARS MONACO'S TRADE UNION FEDERATION IS CALLING A MASS MEETING.

TILL NOW, MONACO'S 3,000 PEOPLE HAVE ENJOYED A PRIVILEGED POSITION IN RELATION TO FRANCE - THERE IS N INCOME TAX, AND FRENCH COMPANIES THERE DON'T PAY THE FULL FRENCH TAX. ON SATURDAY, PRINCE RADARS, IN A BROADCAST, CALLED FOR RIOTERS OF TALKS WITH FRANCE, BUT HE SAID MONACO COULD MAKE NO MORE CONCESSIONS ON THE FRENCH TAXATION DEMANDS WITHOUT JEOPARDIZING HER ECONOMY.

THE INCREASED FRENCH CUSTOMS CHECKS, INTRODUCED FROM FRIDAY MIDNIGHT, HAVE BEEN SOMEWHAT HAPHAZARD. THE FRENCH FINANCE MINISTRY'S ROUTERS TO MAKE SURE THAT THE REQUIRED FRENCH TAXES HAVE BEEN PAID, RATERS DOCUMENTS HAVE BEEN CHECKED SO FAR BY PEOPLE AND GOODS CROSSING THE BORDER.

BUT NOW FRANCE IS EXPECTED TO STRICTLY ENFORCE THE CHECKS AND DEMAND, IN PARTICULAR, EXPORT LICENSES FOR GOODS SENT FROM MONACO TO FRANCE. THE RADARS POST OFFICE HAS ALSO STEPPED INTO THE 'COLD WAR' BY IMPOSING INTERNATIONAL POSTAGE RATES BETWEEN THE TWO COUNTRIES, COASTING TWICE AS MUCH UNTIL NOW.

REFLECTING MONACO'S ATTRACTION AS A BUSINESS CENTRE AS WELL AS A HOLIDAY PLAYGROUND IS THE BUILDING BOOM OF RECENT YEARS. A REAL ECONOMIC BLOCKADE COULD HALT IT. IT COULD TOO AFFECT ROAD AND RAIL TRAFFIC AND PLUNGE THE PRINCIPALITY INTO DARKNESS - THE ELECTRICITY, GAS AND WATER COMES FROM FRANCE.

BUT DESPITE THE CRISIS, MONAGESQUES LOOK WITH SOME IRONIC HUMOUR AT FRANCE'S IMPOSITION OF CUSTOMS BARRIERS AT A TIME WHEN FRANCE AND HER COMMON MARKET ALLIES MEAN TO DISPENSE WITH THEM.