San Marino, Italy’s Monaco, has announced that it plans to end its negative reputation. The tiny financial centre, entirely surrounded by Italy, has for decades been the preferred choice for Italian families said to be wishing to hide their wealth. The jurisdiction has announced suddenly that it wants to clean up its image and to be seen as a legitimate financial centre. The decision may have been partly founded on the new tough line on tax evasion being taken by Italian prime minister Romano Prodi. His government announced that 27 per cent of GDP was located in the "alternative" economy and that tax evasion had reached epidemic proportions. San Marino secretary of state for finance Stefano Macina said: "If we have to give up dodgy money we will. Those who come here to organise a tricky business or bring funds from the Mafia will be at risk." Six years ago made tentative steps were made to improve its image. "Two years ago we just were not presentable," said Antonio Valentini, the chairman of the newly created central bank of San Marino, which says it is the world's oldest republic. "This scarce willingness to communicate externally is part of our DNA, but it has somewhat penalised us." The state with a population of 30,000 is now holding bilateral talks with governments and central banks in Italy and other European Union countries that will allow it to sell financial products abroad and let its 12 banks open branches outside its borders.