Three months before the Liberation, Princess Charlotte made a crucial decision. On her son Rainier’s 21st birthday, on May 31, she announced that she would abdicate her position so that her father Louis II would be succeeded by her son. It was probably a relief for her, too. She had played a remarkable role during World War II as a tireless social worker for frontline soldiers. She miraculously survived an airstrike while sitting in an ambulance just behind the front. The vehicle was destroyed in one fell ‘swoop’ but the Princess suffered a few scratches.
Rainier, however, did not have a good relationship with his grandfather and even left the palace on August 30, four days before the Liberation by the Americans, out of dissatisfaction with the policy pursued by the government led by Emile Roblot, who had been appointed Minister of State by the Vichy government, and because Rainier clearly wanted to be on the side of the Allies. Two weeks later, the young Prince wrote a letter to his grandfather to explain the motive of his act: “I have left the Palace, respecting the authority of my grandfather, to protest against the internal and external policies of the current Minister of State. This decision is by no means intended as a rejection for Prince Louis, who, in my view, should remain the Head of State. I will not return to the Palace until the members of the current government have left.”

The future Sovereign, Prince Rainier, with his mother, Princess Charlotte

The young prince had been annoyed during World War II that Louis II and his staff listened too much to the Vichy government. After the Liberation, Rainier immediately joined the Allies. To justify this act, Rainier wrote a letter to the Monegasques: “The irresponsible politics of the people trusted by my grandfather have damaged the prestige of our country. Our neutrality and our independence were at stake. I had to watch helplessly because I did not agree with this policy, and I had no chance to intervene. (…)  From now on, our country must once again be regarded as a sovereign, independent and neutral country. In any case, that is my greatest wish. Because we have to give the Allies the guarantee that we are on their side, I decided to serve in an Allied army, the French army.”
It was clear that Rainier, although siding with the Allies, did not want to undermine Louis II’s authority. He wanted to manouver in the shadow of his predecessor for the time being. But his attitude did prompt a quick response by the palace. On September 11, Roblot offered the resignation of his government to Louis II, and on September 29, he was officially removed from office.

Louis II remained in power for the time being, partly because the Allies did not want to go along with the ambitions of the local Resistance to depose the Head of State to establish a Republic on a socialist basis.
The Communists from Monaco received permission for a party office on Rue Grimaldi and the Union des syndicates de Monaco (USM) was also allowed to operate officially in the liberated country. The damage of the war, both economic and material, was considerable in Monaco, also because the Germans had left many hidden bombs and that caused even more fatalities when the Germans had already left the Principality.
Louis II came out of the war as an old man but made a few remarkable decisions. Within a year of the Liberation, he agreed to women’s suffrage (for Monegasques) but above all wanted to give his country a few impulses to leave the crisis years behind. He also gave his own life a new impetus, as he had fallen in love with an actress, Ghislaine Dommanger, during the war, and he would eventually propose to her. On July 26, 1946, he married the then 40-year-old actress. It was a big party that the whole population could enjoy. A year later, the prince arranged an elaborate celebration of his 25 years as Prince. Both events were important to help end the gloom of the economic crisis and the world war in Monaco. Suddenly there was a lot to do in the dwarf state to get mundane life going again. Sports competitions, races and regattas were held. Louis II was completely revived, but tourism in Monaco was not because there was not really a ready audience to gamble at the Casino.
Not everything went gloriously, because there was also a lot of social tension. On October 10, 1945, the last French military detachment had left the Principality and after that the Monegasques felt a little freer again. A year later there was for the first time a mass strike in which even the Casino was occupied for ten days as a protest. In the end, the Princely government had to agree to a general wage increase. Louis II was not happy with this development because the state treasury remained fragile.
Rainier had remained in French service after the war and even fought with the liberators of Alsace. He then continued to serve as a soldier in the French part of Germany until January 1947 and went to Berlin as a liaison officer between the French troops and the Texas Rangers, as he was fluent in English. After his military service, he avoided the Palace because the arrival of Ghislaine made him feel even less welcome at court. He waited patiently for the moment when he himself would come to power and retired to a villa on Cap Ferrat, near Beaulieu. He relaxed there with his own hobbies, because he also knew that Louis II had no desire to train his grandson for his upcoming duties. In short, the mood at the palace was quite chilly when Louis II died on May 9, 1949. He was 78 and was buried with great honours eight days later, with many French soldiers coming to Monaco to give him a final salute.
After the funeral, a new era began in Monaco, with 26-year-old Rainier III as the new Head of State.