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Prince Louis II was in a difficult position and was sympathtic to his old war time commander Marshal Philippe Petain, leader of the French Vichy regime. The population was also torn with some favoring the French but with many, seeing themselves as more Italian than French, also favoring Mussolini's government in the Kingdom of Italy. In 1943 Italian fascist troops marched in and occupied Monaco setting up their own local government. When Mussolini's regime fell the situation became worse as this meant occupation by German troops who immediately began targeting the Jewish population in Monaco. Prince Louis II did what he could, working behind the scenes, to save Jewish lives. He had access to the police files which showed who would be targeted and he was able to warn Jews ahead of time that they were scheduled to be arrested by the Gestapo, allowing them time to escape the Nazis. Rene Blum, founder of the opera in Monaco, was one of those arrested and he would later die in a Nazi concentration camp. However, many were able to escape thanks to the assistance of Louis II and the Monegasque police who acted at great risk to their own lives by interfering to thwart the Nazi effort.
On September 3, with the Allied advance, the German forces retreated from Monaco and the country was liberated though the pre-war economy was in shambles. Nonetheless, it was a time for celebration, particularly for Prince Rainier whose sympathies had always been with the Free French, and it was this occasion that was recently celebrated in Monaco with parade and military march past.
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