PARIS, April 6 (UPI) -- Prince Rainier, Europe's longest-ruling monarch, died early Wednesday morning at a hospital in his principality of Monaco. He was 81 years old.
The prince had been ailing for months, and was most recently placed in intensive care at a Monegasque medical center for heart, cardiac and pulmonary complications.
Head of Europe's ancient Grimaldi royal family, Rainier was also considered one of Monaco's most powerful and effective rulers. During his 56-year reign, he transformed his 1.95-square-mile territory, tucked into the French Riviera, into one of the world's most glamorous and moneyed capitals.
And despite a much publicized economic standoff against France in 1962 -- when Rainier eventually ceded to the demands of President Charles de Gaulle -- the monarch slowly chipped away at France's most obvious holds on the principality.
A pair of agreements recently cinched with Paris granted Monaco greater independence, including the possibility of appointing native Monegasques to head the government for the first time instead of French officials.
"He's the prince who managed to restore sovereignty to this principality," said Rainier biographer Frederic Laurent. "When he mounted the throne, Monaco was a French protectorate. By his death, he restored sovereignty to the principality."
Under Rainier's sometimes iron hand, Monaco blossomed into a tax-free paradise for some of the world's richest and most famous people. The principality -- a concrete jungle soaring amid scattered palm trees and bougainvillea and abutting the Mediterranean Sea -- boasts a world-famous ballet, casino and car race rally.
Monaco's coveted real estate is rented and sold at staggering prices, and members of the Grimaldi family are regularly featured in popular magazines, albeit not always for the right reasons.
Life was not always so sweet in Monaco. The prince was born on May 31, 1923 as the only son of Princess Charlotte Louise Juliette, the illegitimate, Algerian-born daughter of Louis II of Monaco, who was later legitimated.
Rainier studied in British academies and attended university in France. He was awarded for his valor in fighting the Nazis during World War II, earning also the rank of Chevalier (Knight) in the French Legion of Honor.
When Louis II died in 1949, Rainier inherited an impoverished principality and a dilapidated royal palace.
"Prince Rainier brought considerable economic development to Monaco," Laurent said. "The principality managed to recover land from the sea. And it's become a small financial power. It's the first economic region in the Cote d'Azur."
Perhaps Rainier is best known for his marriage to American movie actress Grace Kelly, in 1956. The couple gave birth to three children, Caroline, Albert and Stephanie. Princess Grace died in a car accident in 1982.
More recently, Monaco's glamour has been dulled by the taint of scandal. The principality briefly ranked on a "gray list" of money laundering states compiled by the Paris-based Financial Action Task Force. And in 2000, French lawmakers criticized the French-dominated Monegasque government for tolerating financial improprieties -- a charge the principality and its prince angrily denied.
But today, Monaco has cleaned up its reputation and diversified its income away from gambling and real estate. While not a member of the European Union, it belongs to the Council of Europe and the United Nations. Few doubt its capacity to survive in the 21st century, even as it is increasingly pressed to comply with EU fiscal policies.
"People actually like to think there are these tiny places that still exist and are run in the same way they were run 700 or 1,000 years ago," said Marco Incerti, a research fellow at the Center for European Policy in Brussels. "It contributes to the European myth."
Indeed, as the power of monarchs from larger European states like Britain erodes, that of those ruling tiny principalities like Monaco and Liechtenstein has increased -- even though, in the case of Monaco, a constitution was adopted and the parliament given greater say during Rainier's rule.
But analysts believe 47-year-old Prince Albert, Rainier's heir, will have a different touch on the throne.
"The term 'despot' is a bit strong, but in the last 30 years Prince Rainier acted a bit like the head of a company," said Laurent, the author. "He even said it himself, and his subjects often called him 'the boss.'"
"I think it will be different with Prince Albert," Laurent added. "I think he'll delegate more power. I think he'll be more of a prince of consensus. And I think that Monaco, under Prince Albert, will be more democratic."
Besides Albert, Rainier is survived by his two daughters: Princess Caroline, 48, and Princess Stephanie, 40.
