Europe's woes a world away as Monaco sparkles for Formula One

THE uber-rich have moored and are ready to party, as Europe's economic woes are forgotten.

Monaco Grand Prix

THE place glitters at Formula 1 time: the azure water, the polished cars, the diamond-studded elites who swoop on the prime grandstand spots. Apparently there is a recession in Europe, yet the only R-word here is rich, as in mega-rich.

The Monaco F1 grand prix has been for decades a magnet for corporate billionaires and this year it is business as usual, with oligarchs arriving by superyacht and betting jaw-dropping amounts of cash in the casino, draped in surgically enhanced women. The Indian party king Vijay Mallya - whose airline Kingfisher has gone under - still leases his boat, the 15th biggest in the world, to host go-go dancers and champagne-swillers aboard the freshly oiled decks as it ties to the Monaco marina.

The Monaco grand prix is the jewel in the crown of the F1 circuit. While neighbouring countries are battling double- and triple-dip recessions, life in Monaco continues on its lofty designer spending perch without a blip.

Lining the fully booked Monaco marina adjacent to the pontoons are triple-decked hospitality marquees. No Port-a-Loos, please - these are carbon-fibre super-structures with gold-leaf toilets and discreet door sensors. The Red Bull pontoon has a pool and nightclub, where visitors are sequestered according to the level of pass they hold. Only the very privileged get to dangle their pedicured toes in the chlorine.

If you have to pay, just over $6000 will get you a ticket to the sporting action, as Australia's Mark Webber tries tomorrow for his third victory in four years on the exhilarating 3.34km course. Hotel rooms are booked years in advance, at upwards of $10,000 for a package at the five-star establishments. Financial commentators say the Monaco race brings in $130 million over the four days, and as the only grand prix not to have to pay a licence fee, the profits are enormous.

The cachet associated with hosting the race is worth far more - but it's the decisions of the world's highest-paid sporting superstars to live in the principality that underscore its global status. Many of the F1 drivers (with the notable exceptions of Webber and fellow Australian Daniel Ricciardo, who live in Britain) and other international sports stars are domiciled in Monaco, paying next to no tax on their earnings and a corporations tax that is far less than that of neighbouring countries. The main fundraiser for the principality under Prince Albert II is the 19.6 per cent value-added tax, which raises nearly half of the principality's income.

Australian tennis player Bernard Tomic is the latest recruit to Monaco. He is not the first to have moved out of Australia for tax purposes. World No 1 tennis player Novak Djokovic is also a resident, and is often seen on the Monaco courts practising with the former No 1 female player Caroline Wozniacki.

British F1 star Lewis Hamilton is another recent settler, having relocated from Switzerland after changes in the tax laws there. He joins Jenson Button and Nico Rosberg. Ferrari's Fernando Alonso made the same decision, but his switch back to his native Spain "to be able to enjoy life with my family" cost him a cool $US50m in Swiss back-taxes.

The principality's tentacles have reached the ankles of footballers, much to the frustration of some of the biggest European teams. This week Atletico Madrid footballer Radamel Falcao was set to sign with Monaco's football team, despite hefty interest from Chelsea, Manchester City and Real Madrid. Monaco may have been newly promoted to the top French league, but for Falcao, like many others before him, the biggest lure was lucre.