Liechtenstein

—Liechtensteiner, n.

/lik"teuhn stuyn'/; Ger. /likh"teuhn shtuyn'/, n.

a small principality in central Europe between Austria and Switzerland: economically linked with Switzerland. 31,461; 65 sq. mi. (168 sq. km). Cap.: Vaduz.

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Liechtenstein

Introduction Liechtenstein
Background: The Principality of Liechtenstein was established within the Holy Roman Empire in 1719; it became a sovereign state in 1806. Until the end of World War I, it was closely tied to Austria, but the economic devastation caused by that conflict forced Liechtenstein to conclude a customs and monetary union with Switzerland. Since World War II (in which Liechtenstein remained neutral) the country's low taxes have spurred outstanding economic growth. However, shortcomings in banking regulatory oversight have resulted in concerns about the use of the financial institutions for money laundering. Geography Liechtenstein -
Location: Central Europe, between Austria and Switzerland
Geographic coordinates: 47 10 N, 9 32 E
Map references: Europe
Area: total: 160 sq km water: 0 sq km land: 160 sq km
Area - comparative: about 0.9 times the size of Washington, DC
Land boundaries: total: 76 km border countries: Austria 35 km, Switzerland 41 km
Coastline: 0 km (doubly landlocked)
Maritime claims: none (landlocked)
Climate: continental; cold, cloudy winters with frequent snow or rain; cool to moderately warm, cloudy, humid summers
Terrain: mostly mountainous (Alps) with Rhine Valley in western third
Elevation extremes: lowest point: Ruggeller Riet 430 m highest point: Grauspitz 2,599 m
Natural resources: hydroelectric potential, arable land
Land use: arable land: 25% permanent crops: 0% other: 75% (1998 est.)
Irrigated land: NA sq km
Natural hazards: NA Environment - current issues: NA Environment - international party to: Air Pollution, Air
agreements: Pollution-Nitrogen Oxides, Air Pollution-Sulphur 85, Air Pollution- Sulphur 94, Air Pollution-Volatile Organic Compounds, Biodiversity, Climate Change, Desertification, Endangered Species, Hazardous Wastes, Ozone Layer Protection, Wetlands signed, but not ratified: Air Pollution-Persistent Organic Pollutants, Climate Change-Kyoto Protocol, Law of the Sea
Geography - note: along with Uzbekistan, one of only two doubly landlocked countries in the world; variety of microclimatic variations based on elevation People Liechtenstein
Population: 32,842 (July 2002 est.)
Age structure: 0-14 years: 18.3% (male 3,003; female 3,001) 15-64 years: 70.5% (male 11,530; female 11,639) 65 years and over: 11.2% (male 1,494; female 2,175) (2002 est.)
Population growth rate: 0.94% (2002 est.)
Birth rate: 11.24 births/1,000 population (2002 est.)
Death rate: 6.76 deaths/1,000 population (2002 est.)
Net migration rate: 4.93 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.01 male(s)/female under 15 years: 1 male(s)/female 15-64 years: 0.99 male(s)/female 65 years and over: 0.69 male(s)/ female total population: 0.95 male(s)/ female (2002 est.)
Infant mortality rate: 4.92 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 79.1 years female: 82.74 years (2002 est.) male: 75.47 years
Total fertility rate: 1.5 children born/woman (2002 est.) HIV/AIDS - adult prevalence rate: NA% HIV/AIDS - people living with HIV/ NA
AIDS:
HIV/AIDS - deaths: NA
Nationality: noun: Liechtensteiner(s) adjective: Liechtenstein
Ethnic groups: Alemannic 87.5%, Italian, Turkish, and other 12.5%
Religions: Roman Catholic 80%, Protestant 7.4%, unknown 7.7%, other 4.9% (1996)
Languages: German (official), Alemannic dialect
Literacy: definition: age 10 and over can read and write total population: 100% male: 100% female: 100% (1981 est.) Government Liechtenstein
Country name: conventional long form: Principality of Liechtenstein conventional short form: Liechtenstein local short form: Liechtenstein local long form: Fuerstentum Liechtenstein
Government type: hereditary constitutional monarchy
Capital: Vaduz Administrative divisions: 11 communes (Gemeinden, singular - Gemeinde); Balzers, Eschen, Gamprin, Mauren, Planken, Ruggell, Schaan, Schellenberg, Triesen, Triesenberg, Vaduz
Independence: 23 January 1719 Imperial Principality of Liechtenstein established; 12 July 1806 established independence from the Holy Roman Empire
National holiday: Assumption Day, 15 August
Constitution: 5 October 1921
Legal system: local civil and penal codes; accepts compulsory ICJ jurisdiction, with reservations
Suffrage: 20 years of age; universal
Executive branch: chief of state: Prince HANS ADAM II (since 13 November 1989, assumed executive powers 26 August 1984); Heir Apparent Prince ALOIS, son of the monarch (born 11 June 1968) elections: none; the monarch is hereditary; following legislative elections, the leader of the majority party in the Diet is usually appointed the head of government by the monarch and the leader of the largest minority party in the Diet is usually appointed the deputy head of government by the monarch cabinet: Cabinet elected by the Diet, confirmed by the monarch head of government: Head of Government Otmar HASLER (since 5 April 2001) and Deputy Head of Government Rita KIEBER-BECK (since 5 April 2001)
Legislative branch: unicameral Diet or Landtag (25 seats; members are elected by direct, popular vote under proportional representation to serve four-year terms) election results: percent of vote by party - FBP 49.90%, VU 41.35%, FL 8.71%; seats by party - FBP 13, VU 11, FL 1 elections: last held 11 February 2001 (next to be held by NA 2005)
Judicial branch: Supreme Court or Oberster Gerichtshof; Superior Court or Obergericht Political parties and leaders: Fatherland Union or VU [Heinz FROMMELT]; Progressive Citizens' Party or FBP [Johannes MATT]; The Free List or FL [Dr. Pepo FRICK, Karin JENNY, Rene HASLER] Political pressure groups and NA
leaders: International organization CE, EBRD, ECE, EFTA, IAEA, ICRM,
participation: IFRCS, Interpol, IOC, ITU, OPCW, OSCE, PCA, UN, UNCTAD, UPU, WCL, WHO (observer), WIPO, WTrO Diplomatic representation in the US: chief of mission: Ambassador Claudia FRITSCHE chancery: 633 Third Avenue, 27th floor, New York, NY 10017 telephone: [1] [phone] FAX: [1] [phone] Diplomatic representation from the the US does not have an embassy in
US: Liechtenstein, but the US Ambassador to Switzerland is also accredited to Liechtenstein
Flag description: two equal horizontal bands of blue (top) and red with a gold crown on the hoist side of the blue band Economy Liechtenstein -
Economy - overview: Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and living standards on a par with the urban areas of its large European neighbors. Low business taxes - the maximum tax rate is 18% - and easy incorporation rules have induced 73,700 holding or so-called letter box companies to establish nominal offices in Liechtenstein, providing 30% of state revenues. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between European Free Trade Association (EFTA) and EU) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe.
GDP: purchasing power parity - $730 million (1998 est.)
GDP - real growth rate: NA%
GDP - per capita: purchasing power parity - $23,000 (1998 est.) GDP - composition by sector: agriculture: NA% industry: NA% services: NA% Population below poverty line: NA% Household income or consumption by lowest 10%: NA%
percentage share: highest 10%: NA% Inflation rate (consumer prices): 1% (2001)
Labor force: 22,891 of which 13,847 are foreigners; 8,231 commute from Austria and Switzerland to work each day Labor force - by occupation: industry, trade, and building 45%, services 53%, agriculture, fishing, forestry, and horticulture 2% (1997 est.)
Unemployment rate: 1.8% (February 1999)
Budget: revenues: $424.2 million expenditures: $414.1 million, including capital expenditures of $NA (1998 est.)
Industries: electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments, tourism Industrial production growth rate: NA% Electricity - production by source: fossil fuel: NA% other: NA% hydro: NA% nuclear: NA% Electricity - consumption: NA kWh
Electricity - exports: NA kWh
Electricity - imports: NA kWh
Agriculture - products: wheat, barley, corn, potatoes; livestock, dairy products
Exports: $2.47 billion (1996)
Exports - commodities: small specialty machinery, dental products, stamps, hardware, pottery
Exports - partners: EU and EFTA countries 60.57% (Switzerland 15.7%) (1995)
Imports: $917.3 million (1996)
Imports - commodities: machinery, metal goods, textiles, foodstuffs, motor vehicles
Imports - partners: EU countries, Switzerland (1996)
Debt - external: $0 (1996) Economic aid - recipient: none
Currency: Swiss franc (CHF)
Currency code: CHF
Exchange rates: Swiss francs per US dollar - 1.6668 (January 2002), 1.6876 (2001), 1.6888 (2000), 1.5022 (1999), 1.4498 (1998), 1.4513 (1997)
Fiscal year: calendar year Communications Liechtenstein Telephones - main lines in use: 20,000 (1997) Telephones - mobile cellular: NA
Telephone system: general assessment: automatic telephone system domestic: NA international: linked to Swiss networks by cable and microwave radio relay Radio broadcast stations: AM 0, FM 4, shortwave 0 (1998)
Radios: 21,000 (1997) Television broadcast stations: NA (linked to Swiss networks) (1997)
Televisions: 12,000 (1997)
Internet country code: .li Internet Service Providers (ISPs): 44 (Liechtenstein and Switzerland) (2000)
Internet users: NA Transportation Liechtenstein
Railways: total: 18.5 km standard gauge: 18.5 km 1.435- m gauge (electrified) note: owned, operated, and included in statistics of Austrian Federal Railways (2001)
Highways: total: 250 km paved: 250 km unpaved: 0 km
Waterways: none
Ports and harbors: none
Airports: none (2001) Military Liechtenstein
Military - note: defense is the responsibility of Switzerland Transnational Issues Liechtenstein Disputes - international: Liechtenstein's royal family claims restitution for 1,600 sq km of land in the Czech Republic confiscated in 1918
Illicit drugs: multilateral organizations engaged in issuing international guidelines for financial sector oversight found gaps in Liechtenstein's financial services controls that made it vulnerable to money laundering, but Liechtenstein has become less attractive as a haven for illicit funds, based on implementation in 2001 of new anti-money-laundering legislation and improved mutual legal assistance cooperation with other countries

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officially Principality of Liechtenstein

Principality, western Europe.

It is located between Switzerland and Austria. Area: 61.8 sq mi (160 sq km). Population (2002 est.): 33,300. Capital: Vaduz. The Liechtensteiners are descended from the Alemanni tribe that came into the region after AD 500. Languages: German (official), Alemanni dialect, Walser dialect. Religion: Roman Catholicism. Currency: Swiss franc. The eastern two-thirds of Liechtenstein's small territory is composed of the foothills of the Rhätikon Massif, part of the central Alps. The western section of the country is occupied by the Rhine River floodplain. Liechtenstein has no natural resources of commercial value, and virtually all raw materials, including wood, have to be imported. Manufacturing includes metalworking, pharmaceuticals, optical lenses, electronics, and food processing. Liechtenstein, a tourist centre, is also a centre of banking because of its stable political situation and its absolute bank secrecy. It is a constitutional monarchy with one legislative house; its chief of state is the prince, and the head of government is the prime minister. The Rhine plain was occupied for centuries by two independent lordships of the Holy Roman Empire, Vaduz and Schellenberg. The principality of Liechtenstein, consisting of these two lordships, was founded in 1719 and remained part of the Holy Roman Empire. It was included in the German Confederation (1815–66). In 1866 it became independent, recognizing the regions of Vaduz and Schellenberg as unique regions forming separate electoral districts. In 1921 it adopted Swiss currency, and in 1923 joined the Swiss customs union. An almost 60-year ruling coalition dissolved in 1997, and the prince urged adoption of constitutional reforms.

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▪ 2009

Area:

160 sq km (62 sq mi)

Population

(2008 est.): 35,500

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

      Even prior to the global banking crisis in 2008, Liechtenstein found itself in trouble with its own banking practices. In February German prosecutors investigating the giant Swiss bank UBS AG uncovered ties with LGT Group, the bank owned by the Liechtenstein royal family. The probe began when a former bank clerk at LGT, Heinrich Kieber, offered Germany's Federal Intelligence Service a CD-ROM with data on German clients who held secret accounts at the Liechtenstein bank as part of a cross-border tax-evasion scheme. Money smuggled out of Germany was used to set up Liechtenstein-based foundations, which were taxed very lightly and were allowed to disburse money to founders and their family members. The foundations could then open bank accounts outside Liechtenstein, where owners could gain access to the moneys without paying German taxes. Liechtenstein's banking-secrecy laws prevented tracing the owners of the foundations.

      Although Liechtenstein charged that Kieber had stolen the data while he was an LGT employee, German Finance Minister Peer Steinbrück paid some €5 million (about $7.3 million) for the disk. The scandal spread as Kieber was said to have sold three CDs containing names and account data to tax authorities in 12 countries, including the U.K., France, Italy, and the U.S. In July the U.S. Senate's Permanent Subcommittee on Investigations opened hearings on the probe of U.S. citizens holding these secret accounts. Liechtenstein claimed a violation of its sovereignty and argued that it was moving toward greater cooperation with investigators.

Anne Roby

▪ 2008

Area:

160 sq km (62 sq mi)

Population

(2007 est.): 35,300

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

      Liechtenstein enjoyed a high standard of living comparable to that of its larger neighbours in 2007. A large variety of small businesses contributed about 40% of GDP. The fast-growing services sector based on banking, financial services, and tourism contributed another 26%. Agriculture remained the smallest sector at about 5%, and agricultural products constituted the principality's largest percentage of imports.

      Liechtenstein in August began work on modernizing its justice system. The country until recently had only one judge and still had only one prison, which housed detainees pending trial and inmates with very short sentences. (Long sentences were served in Austrian prisons.) There was particular concern about the placement of detainees waiting to be deported. In order to comply with international standards, Liechtenstein had to tackle a total revision of the Enforcement of Sentences Act, new amendments to the Code of Criminal Procedure, a revision of the Court Organization Act, and the development of a Judicial Services Act. All of these changes were necessary to bring Liechtenstein into compliance with the European Convention on Human Rights. Although Liechtenstein had moved into closer alignment with European standards—for example, it was no longer legal to open a bank account anonymously—the country remained on the Organisation for Economic Co-operation and Development blacklist of uncooperative tax havens.

Anne Roby

▪ 2007

Area:

160 sq km (62 sq mi)

Population

(2006 est.): 35,100

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

 Liechtenstein continued to prosper in 2006—the principality's 200th anniversary year—under the leadership of Prince Alois. In 2004 he had taken over the day-to-day duties of his father, Prince Hans Adam II, who remained head of state. The country maintained one of the highest standards of living in the world, with much of its prosperity coming from the financial-services sector. A low business- tax rate (with a maximum of 20%) and easy incorporation rules had prompted about 75,000 companies to establish nominal offices in Liechtenstein, and this provided some 30% of state revenues.

      The Liechtenstein Institute—which conducted research on topics relating to the country, especially in the sciences, economics, and history—marked its 20th anniversary in September. Meanwhile, a national survey, released on September 24, showed that 90% of the respondents were satisfied with the medical services available to them, with two-thirds reporting that they were “very satisfied.”

      The U.S. Department of State's International Religious Freedom Report 2006 found that Liechtenstein provided for freedom of religion and respected this right in practice. More than 76% of the population was affiliated with the Roman Catholic Church, and about 7% of the populace attended Protestant churches. Both religious groups received government funding based on the number of members. In 2006 the government contributed 25,000 Swiss francs (about $20,000) to the Muslim community, which had become Liechtenstein's third largest religious group, with about 1,300 adherents.

Anne Roby

▪ 2006

Area:

160 sq km (62 sq mi)

Population

(2005 est.): 34,800

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

      In 2005 Liechtenstein lost its demand for millions of dollars in damages from Germany for land and property assets seized in 1945. The International Court of Justice in The Hague threw out Liechtenstein's claim on February 10, stating that the dispute was too old for it to rule on. The suit claimed that Germany had turned over artworks and other property of Liechtenstein citizens to Czechoslovakia as war reparations, while Germany contended that Czechoslovakia had seized the assets after the German defeat in 1945. The ICJ had had the case before it since 1980.

      Meanwhile, the Independent Commission of Historians Liechtenstein–Second World War found the principality not guilty of war crimes during the Nazi era. Accusations by the World Jewish Congress in 2000 had led to the four-year investigation. On April 13 the commission concluded that Liechtenstein had done little wrong.

      Legislative elections on March 11 and 13 for the 25-seat Landtag produced a turnout of 86.47%. The Progressive Citizens Party (FBP) captured 12 seats (with 48.74% of the vote), the Patriotic Union (VU) 10 seats (38.23%), and the green Free List 3 seats (13.03%), having picked up one from each of the larger parties. On April 21 Prime Minister Otmar Hasler (leader of the FBP), in coalition with the VU, formed a new government, the first to begin operations since the 2003 constitutional changes that gave Prince Hans Adam II the power to veto legislation and dismiss governments.

Anne Roby

▪ 2005

Area:

160 sq km (62 sq mi)

Population

(2004 est.): 34,500

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

      On Aug. 15, 2004, Prince Hans Adam II, age 59, formally transferred day-to-day governing power in Liechtenstein to his 36-year-old son, Crown Prince Alois, and invited the entire country to the garden-party celebration. Prince Hans Adam retained overall authority over the country, which his family had ruled for almost 300 years.

      The reopening of the Liechtenstein Museum in Vienna on March 28 was cause for celebration. The 1,600 paintings and many Italian bronzes and decorative objects constituted one of the largest and most valuable private collections in the world, assembled over four centuries by the Liechtenstein princely family, which fully financed the €23 million (about $27.8 million) renovations of the museum's Baroque Garden Palace. Foremost in the Princely Collections were important paintings by Peter Paul Rubens, including The Assumption of the Virgin, and works by Jan Brueghel the Elder, Raphael, and Rembrandt. The Austrian museum had been closed since 1938 after the Nazis had claimed the collection. Then museum director Gustav Wilhelm had switched labels on the most precious works and, renting trucks and buses from Switzerland, had transported the art under cover of darkness to the royal palace in Vaduz, where it remained safe. Although some of the works had been exhibited in Vaduz, most of the collection had been closed to public view for 66 years.

Anne Roby

▪ 2004

Area:

160 sq km (62 sq mi)

Population

(2003 est.): 34,100

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

      In 2003 Prince Hans Adam II won his long-standing battle for constitutional changes that would greatly increase his powers in Liechtenstein. A referendum held on March 16 granted the prince sweeping powers to veto parliamentary legislation, dismiss the entire government, and implement emergency powers. With a voter turnout of 87.7%, a huge majority of 64.3% voted for the prince's changes, while only 35.7% voted against. The 44-nation Council of Europe opposed the referendum and called the changes “a serious step backward” that might easily “lead to the isolation of Liechtenstein within the European community of states.” Opposition within the country had been led by former prime minister Mario Frick. In August Hans Adam announced that he would cede power to his son Alois in 2004.

      An initiative by the Organisation for Economic Co-operation and Development (OECD) in January introduced new rules to ensure that European Union citizens would be taxed on income from savings accounts they had established abroad. Liechtenstein, which was not an EU member and opposed the directives, had been cited by the OECD as one of the world's few remaining real tax havens. In July two former U.S. Pentagon officials were convicted of extortion, fraud, and money laundering in a scheme to profit from minority contracts; the money-laundering scheme had involved bank accounts in Liechtenstein.

Anne Roby

▪ 2003

Area:

160 sq km (62 sq mi)

Population

(2002 est.): 33,300

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Otmar Hasler

      Prince Hans Adam II's welcoming speech at the Aug. 15, 2002, celebration of Liechtenstein's national holiday again centred on the country's decades-long constitutional dispute. On August 2 the prince had proposed a petition allowing citizens to vote directly on changes that would increase his power and reiterated his threat to move to Vienna if the proposed changes were not made.

      In 2002 Liechtenstein pressed forward in its suit against Germany at the International Court of Justice in The Hague, seeking compensation for the property of Liechtenstein citizens seized by Czechoslovakia from Germany after World War II. A German court had earlier ruled that the artworks and other items had been taken legally by the Czechs and that Germany was not liable for their return.

      Although in June 2001 a task force of the Organisation for Economic Co-operation and Development (OECD) had removed Liechtenstein from its list of countries that were not doing enough to combat money laundering, in April 2002 the OECD added the country to its list of uncooperative tax havens. In July Liechtenstein signed a treaty with the U.S. that allowed U.S. prosecutors to obtain from Liechtenstein banks information for criminal investigations into money laundering, terrorist financing, and major fraud.

Anne Roby

▪ 2002

Area:

160 sq km (62 sq mi)

Population

(2001 est.): 33,000

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Mario Frick and, from April 5, Otmar Hasler

      In 2001, as Prince Hans Adam II reiterated his threat to “sell up” if constitutional changes vastly increasing his powers were not accepted, a survey found that 60% of the people favoured the status quo, only 20% wanted to give the prince more power, and 20% favoured less power. In parliamentary elections on February 9–11, the Progressive Citizens' Party (FBP), which had ignored the dispute during the campaign, won 13 of the 25 seats with 49.9% of the vote. The Fatherland Union (41.1%) won 11 seats, and the Free List party took the remaining seat. Otmar Hasler of the FBP was sworn in as the new head of government on April 5.

      After two years of diplomatic maneuvering, on June 1 Liechtenstein filed a complaint against Germany at the International Court of Justice in The Hague demanding reparations for alleged violation of its sovereignty and property rights of its citizens. At issue was the confiscation of land, artwork, and other property of the prince's family by Czechoslovakia at the end of World War II to pay war debts to Germany. The Czechs had refused to negotiate, while Germany, which considered the property German-owned, had used the assets to pay war reparations. (See International Law. (Law, Crime, and Law Enforcement ))

      Liechtenstein faced new indictments for money laundering in July. Two financial advisers were charged with conspiracy to hide millions of dollars for the drug cartel based in Cali, Colom.

Anne Roby

▪ 2001

Area:

160 sq km (62 sq mi)

Population

(2000 est.): 32,600

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Mario Frick

      “The principality of Liechtenstein faces the biggest domestic and foreign political crisis since World War II,” Prince Hans Adam II declared to his people during the country's National Day celebrations on Aug. 15, 2000. Allegations that the principality was a haven for money laundering by Latin American drug cartels, Russian gangsters, and the Italian Mafia first surfaced in November 1999 in the German magazine Der Spiegel and were based on a German intelligence service report. The government of Liechtenstein appointed a special prosecutor from Austria, Kurt Spitzer, to lead the investigation. By June eight people had been arrested, including a member of the parliament, a brother of the country's highest-ranking judge, and a brother of the deputy chief of government.

      In his report, issued on August 31, Spitzer found particular problems with Liechtenstein's judicial system, where criminal cases remained unprocessed for years, but the special prosecutor stated that the country itself was no more guilty of money laundering than the rest of Europe. Nevertheless, Liechtenstein remained the only European nation on an Organisation for Economic Co-operation and Development task force's blacklist of 15 countries accused of failure to cooperate in the international fight against money laundering.

Anne Roby

▪ 2000

Area:

160 sq km (62 sq mi)

Population

(1999 est.): 31,700

Capital:

Vaduz

Chief of state:

Prince Hans Adam II

Head of government:

Mario Frick

      Liechtenstein celebrated two royal weddings in 1999 as the two youngest children of Prince Hans Adam II wed. Princess Tatjana married Philipp von Lattorff on June 5 in the Cathedral of Vaduz, and Prince Constantin was joined in marriage to Grafin Marie Kalnoky on July 17.

      In late October the European Court of Human Rights in Strasbourg, France, ruled that Prince Hans Adam had violated the human rights of a nominee for a position in an administrative court when he rejected him for suggesting that the Supreme Court, not the prince, should have final constitutional authority. Hans Adam had been at odds with the democratically minded Liechtenstein legislature for some time.

      On October 14 Andorra's Prime Minister Marc Forné Molné visited Vaduz, where he and Mario Frick discussed the role of their two small states, especially in regard to the tax policies of the European Union. Unemployment figures in the principality fell even lower than they had been, to 1.5% in September, and the budget showed a healthy surplus.

Anne Roby

▪ 1999

      Area: 160 sq km (62 sq mi)

      Population (1998 est.): 31,400

      Capital: Vaduz

      Chief of state: Prince Hans Adam II

      Head of government: Mario Frick

      With the theme "Small Is Beautiful," Liechtenstein in 1998 began preparations to serve as host of the eighth Games of the Small States of Europe, scheduled for May 24-29, 1999, in Vaduz. A new stadium at Schaan opened in August for the track and field trials. Trials for judo took place in September and for squash and table tennis in October. Cycling, swimming, tennis, volleyball, and rifle competitions were also held in order to ensure that Olympic competition standards were satisfied. Some 700 athletes from Andorra, Iceland, Luxembourg, Malta, Monaco, San Marino, and Cyprus were expected to participate with Liechtenstein in these mini-Olympics.

      The status and numbers of refugees in Liechtenstein posed problems during the year. In the case of 13 Tibetans who had lived in Liechtenstein for five years and been denied asylum, the administration and appellate court found that they could not be returned to their home country and had to be treated as refugees. By late in the year, the number of refugees from the Serbian province of Kosovo had overwhelmed the capacity of the receiving centre in Vaduz.

      The economy continued to grow. With low price increases, low interest rates, and little unemployment, there were no problem areas.

ANNE ROBY

▪ 1998

      Area: 160 sq km (62 sq mi)

      Population (1997 est.): 31,300

      Capital: Vaduz

      Chief of state: Prince Hans Adam II

      Head of government: Mario Frick

      The longest-serving ruling coalition in Europe dissolved after almost 60 years when the Progressive Citizens' Party (FBP) quit in March 1997 to form an opposition group in the parliament. The coalition of the FBP and the Fatherland Union (VU) party had been formed in 1938 during fears of invasion by Nazi Germany. The VU formed a new government in April. In elections on February 2, the FBP lost a seat to the Free List (FL) party, which left it 10 seats (instead of 11) in the 25-member parliament. The VU held on to its 13 seats, while the FL moved up from 1 to 2 seats.

      Prince Hans Adam II, meanwhile, urged the adoption of constitutional reforms that would reduce the role of the parliament and rely more on direct democracy, in which the people vote directly on specific issues. Opposition politicians charged that his call for change was only a ploy to gain more power for himself.

      Liechtenstein's royal family, unlike most in Europe, paid for its own upkeep—its castle and royal household—and was probably the country's largest taxpayer. Though a remark by the prince about selling Liechtenstein to Bill Gates and renaming it Microsoft was not meant seriously, in July, when faced by politicians opposing his effort to gain the power to appoint judges, he ended discussions by saying he would pack his bags and move Princess Maria, the children, and himself to Vienna.

ANNE ROBY

      This article updates Liechtenstein.

▪ 1997

      A landlocked constitutional monarchy of central Europe, Liechtenstein is united with Switzerland by a customs and monetary union. Area: 160 sq km (62 sq mi). Pop. (1996 est.): 31,400. Cap.: Vaduz. Monetary unit: Swiss franc, with (Oct. 11, 1996) a free rate of Sw F 1.25 to U.S. $1 (Sw F 1.97 = £ 1 sterling). Sovereign prince, Hans Adam II; head of government in 1996, Mario Frick.

      In 1996 a long-standing dispute between Liechtenstein and Russia was settled when Prince Hans Adam II negotiated the return of the royal family's archives from Russia, which had held the documents since they were seized by Soviet troops at the end of World War II. The matter was resolved when the prince, who had bought at auction the Sokolov Archive (which documents the executions of Russian Tsar Nicholas II and his family by Bolsheviks in 1918), offered an exchange. On September 4 Russian Foreign Minister Yevgeny Primakov agreed to the trade. A similar dispute with the Czech Republic over Czechoslovakia's 1945 confiscation of Prince Hans Adam's ancestral home and estates remained unresolved.

      (ANNE ROBY)

      This article updates Liechtenstein.

▪ 1996

      A landlocked constitutional monarchy of central Europe, Liechtenstein is united with Switzerland by a customs and monetary union. Area: 160 sq km (62 sq mi). Pop. (1995 est.): 30,900. Cap.: Vaduz. Monetary unit: Swiss franc, with (Oct. 6, 1995) a free rate of Sw F 1.15 to U.S. $1 (Sw F 1.82 = £ 1 sterling). Sovereign prince, Hans Adam II; head of government in 1995, Mario Frick.

      In a referendum held on April 9, 1995, Liechtenstein's voters approved the country's participation in the European Economic Area (EEA). The revised terms of the treaty had been negotiated over the previous two years and successfully concluded in October 1994. The renegotiation and a second referendum became necessary when Switzerland, with which Liechtenstein had customs and currency unions dating from 1923, voted against joining the EEA. Although opposition to the treaty was strong—with arguments that the country would be surrendering its sovereignty, opening its doors to a flood of immigrants, and risking its status as a tax haven—in a high turnout of 82% of the electorate, 6,411 votes (55.9%) were cast in favour of membership. The treaty did not cover banking and tax issues, and Liechtenstein won a special concession limiting immigration.

      An art collection from Liechtenstein was part of Luxembourg's festival of the arts during its reign as European City of Culture, 1995. The exhibition "Treasures from Collections of the Prince of Liechtenstein" was on display from July 8 to September 3. (ANNE ROBY)

      This updates the article Liechtenstein.

▪ 1995

      A landlocked constitutional monarchy of central Europe, Liechtenstein is united with Switzerland by a customs and monetary union. Area: 160 sq km (62 sq mi). Pop. (1994 est.): 30,500. Cap.: Vaduz. Monetary unit: Swiss franc, with (Oct. 7, 1994) a free rate of Sw F 1.28 to U.S. $1 (Sw F 2.03 = £ 1 sterling). Sovereign prince, Hans Adam II; head of government in 1994, Mario Frick.

      The position of Liechtenstein within the framework of European integration dominated the country's foreign policy in 1994. The European Free Trade Association (EFTA), comprising Austria, Finland, Iceland, Liechtenstein, Norway, Sweden, and Switzerland, had negotiated a treaty with the European Community to create the European Economic Area (EEA). The voters of Liechtenstein ratified the treaty in mid-December 1993, but the citizens of Switzerland had already voted against it on December 6. Because of an existing customs treaty between Switzerland and Liechtenstein dating from 1923, the Swiss vote prevented the EEA treaty from automatically entering into force for Liechtenstein. Negotiations to adapt the EEA treaty and maintain the strong traditional links with Switzerland were successfully concluded in October. The fate of the revised treaty, which required the approval of the electorate, would be decided in the spring of 1995.

      Negotiations continued between the Czech Republic and Liechtenstein over compensation for Czechoslovakia's 1945 confiscation of land and property of Liechtenstein citizens, including the ancestral home and estates of Prince Hans Adam II. The issue was still pending at year's end.

      (ANNE ROBY)

      This updates the article Liechtenstein.

▪ 1994

      A landlocked constitutional monarchy of central Europe, Liechtenstein is united with Switzerland by a customs and monetary union. Area: 160 sq km (62 sq mi). Pop. (1993 est.): 30,100. Cap.: Vaduz. Monetary unit: Swiss franc, with (Oct. 4, 1993) a free rate of Sw F 1.42 to U.S. $1 (Sw F 2.15 = £ 1 sterling). Sovereign prince, Hans Adam II; head of government in 1993, Hans Brunhart and, from May 26, Markus Büchel.

      General elections were held in the principality on Feb. 7 and Oct. 24, 1993. In the February elections the right-wing Progressive Citizens' Party (FBP), which had governed in coalition since 1938 with the centrist Fatherland Union (VU), won a plurality of seats in the parliament. When the new government, headed by FBP leader Markus Büchel, was given a no-confidence vote in the parliament in September, Prince Hans Adam II, Liechtenstein's reigning monarch, dissolved the legislature and ordered October elections. In that election the VU regained a parliamentary plurality, leading the way for the VU's Mario Frick to take over as head of government. The transition to a new government, however, would not take place until Jan. 1, 1994.

      A dispute with former Czechoslovakia, begun in 1992, continued to brew in 1993. Prince Hans Adam II demanded compensation for Czechoslovakia's 1945 confiscation of his ancestral home and estates (some 1,600 sq km [617 sq mi]). The prince estimated the value of his property at some $1 billion, but he indicated that he would settle for Sw F 300 million before taking his case to the International Court of Justice in The Hague. (KAREN M. SPARKS)

      This updates the article Liechtenstein.

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Introduction

officially  Principality of Liechtenstein , German  Fürstentum Liechtenstein 

Liechtenstein, flag of   small western European principality located between Switzerland and Austria. Its capital is Vaduz.

Geography

      The eastern two-thirds of the country is composed of the rugged foothills of the Rhätikon Mountains, part of the central Alps. The highest peak is Grauspitz, which rises to 8,527 feet (2,599 metres), and much of the principality is at an elevation above 6,000 feet (1,800 metres). The lower slopes of the mountains are covered by evergreen forests and alpine flowers, while their bare peaks are blanketed by snow. The mountains contain three major valleys and are drained by the Samina River. The western section of the principality is occupied by the Rhine River floodplain, which, together with the valley of the Ill River, forms a triangular lowland widening northward. The river valley was once marshy, but a drainage channel built in the 1930s has made its rich soils highly suitable for agriculture.

      The climate of Liechtenstein is mild and is greatly affected by the warm southerly wind known as the foehn. Annual precipitation ranges, according to location, from about 35 to 47 inches (900 to 1,200 mm), though some areas in the mountains can receive as much as 75 inches (1,900 mm). In winter the temperature rarely falls below 5 °F (−15 °C), while in summer the average daily maximum temperature varies from 68 to 82 °F (20 to 28 °C). These conditions allow for the cultivation of grapes and corn (maize), which is unusual in a mountainous area.

      Liechtenstein has a remarkable variety of vegetation. Water milfoil and mare's-tail as well as reeds, bulrush, bird's eye primrose, and orchids can be found. The forests comprise a mixed woodland with copper beeches, common and Norway maple, sycamore, linden, elm, and ash. Liechtenstein is also rich in wildlife, including red deer, roe deer, chamois, hares, marmots, blackcocks, pheasants, hazel grouse, partridges, foxes, badgers, martens, polecats, stoats, and weasels.

      Liechtenstein is a constitutional monarchy. Its head of state is the prince, who succeeds to the throne by heredity through the male line as determined by the regulations of the princely house. The constitution of 1921 provides for a unicameral Landtag, or parliament, which consists of 25 members elected to four-year terms. The traditional regions of Vaduz and Schellenberg are still recognized as unique regions—the Upper Country and the Lower Country, respectively—and they form separate electoral districts. All citizens age 18 or older who live in the principality are eligible to vote in national elections.

      The government consists of a prime minister and four other cabinet officials (with at least two officials from each of the two electoral districts), who are appointed by the prince on the recommendation of the Landtag. The 11 Gemeinden (communes) are governed autonomously—but under government supervision—by mayors and city councils, elected every three years. To the south, the more industrial Upper Country contains the communes of Vaduz, Balzers, Triesen, Triesenberg, Schaan, and Planken. The Lower Country, to the north, is divided into the communes of Eschen, Mauren, Gamprin, Ruggell, and Schellenberg. The government maintains a nominal police force, but the standing army was abolished and neutrality proclaimed in 1868 (defense of the principality is the responsibility of Switzerland).

      Liechtenstein has no natural resources of commercial value, and virtually all raw materials, including wood, have to be imported. All of the principality's forested areas are protected in order to maintain the ecology of the mountain slopes and to guard against erosion. There is no heavy industry, but small manufacturing concerns are spread throughout the principality. Production includes metalworking, pharmaceuticals, precision instruments, electronic equipment, food processing, and the manufacture of consumer goods. In 1921 Liechtenstein adopted the Swiss franc as its currency, and in 1923 it joined a customs union with Switzerland.

      Few workers are employed in agriculture, but the average farming unit is fairly large, and the biggest concerns concentrate on livestock and dairying. Crops include corn, potatoes, and cereals. Vineyards are few and are split into small units. The Alpine slopes are used for grazing during the summer.

      Tourism is a leading sector of Liechtenstein's economy and is sponsored by the government. Most visitors come from the surrounding European countries and centre their activities on Vaduz. The registration of tens of thousands of foreign firms in Liechtenstein provides a source of tax income. The principality has also become a centre of banking because of its stable political situation and its laws providing absolute bank secrecy. In the late 20th century, however, Liechtenstein became a centre for money laundering, and its laws were subsequently altered to prohibit the opening of accounts anonymously.

      There is a network of excellent roads connecting Liechtenstein with its neighbours. The railway, part of the Paris-Vienna express route, passes through the northern sections of the country. There is no airport.

      Ethnic Liechtensteiners, who comprise about two-thirds of the population, are descended from the Alemanni tribe that came into the region after AD 500. Although the official language is German, most of the population still speaks an Alemanni dialect containing local variations in pronunciation and vocabulary. Walsers, descendants of immigrants from the Swiss canton of Valais, settled in Triesenberg at the end of the 13th century and continue to speak a particularly distinctive form of the language. About four-fifths of the population are Roman Catholic.

      Post-World War II industrialization resulted in a shift of people to the larger communes. The most populous communes are Vaduz, the administrative and commercial centre, and Schaan, the principal industrial community. Nevertheless, only about one-fifth of the population is classified as urban.

      Matters of public health are the responsibility of a committee of public health, which is headed by a state medical officer. Liechtenstein's small medical institutions are supplemented by the excellent neighbouring Swiss facilities, to which the principality contributes support. Social security is sustained by a variety of compulsory insurance schemes; the financing of these comprehensive plans is shared by employers, employees, and the government.

      Education is supervised by the National Board of Education and is compulsory beginning at age 7. The school system consists of primary schools, secondary schools, a vocational school, grammar school, commercial high school, music school, and a technical college. There is no university in the principality.

      The world-famous art collections of the princes of Liechtenstein, exhibited in the Engländerhaus in the centre of Vaduz, include outstanding works of many 17th-century Dutch and Flemish painters. There is also a State Art Collection (1969). The Liechtenstein Postal Museum (founded in 1930) exhibits a large stock of stamps, including national issues since 1912. The Liechtenstein National Museum in Vaduz houses primarily early and Roman artifacts. The Liechtenstein National Library was established in 1961 as a public foundation. A large personal art collection of the Liechtenstein family also is displayed at the Liechtenstein Museum in Vienna.

History

      The Rhine plain has always been the focus of settlement. For centuries the valley was occupied by two independent lordships of the Holy Roman Empire, Vaduz and Schellenberg. The principality of Liechtenstein, consisting of these two lordships, was founded in 1719 and remained part of the Holy Roman Empire. It was included in the Confederation of the Rhine (Rhine, Confederation of the) from 1806 to 1815 and in the German Confederation from 1815 to 1866. In 1866 Liechtenstein became independent. Throughout most of its history, Liechtenstein was a quiet, rural corner of the world that was largely unaffected by its European neighbours, maintaining its neutrality in both World Wars I and II. After World War II, however, the country underwent a remarkably rapid period of industrialization, led by Francis Joseph II (Francis Joseph II, prince of Liechtenstein), who served as prince from 1938 until his death in 1989.

      Francis Joseph II was succeeded by his son Hans Adam II (Hans Adam II, prince of Liechtenstein), under whom Liechtenstein joined the United Nations (1990), the European Free Trade Association (1991), the European Economic Area (1995), and the World Trade Organization (1995). Relations between the Landtag and the prince were often tense. The prince offered several constitutional amendments that would strengthen his role, and he frequently threatened to relocate to Austria if his wishes were not granted. In a constitutional referendum in 2003, voters endorsed wider powers for the prince, including the right to veto legislation and the ability to implement emergency powers and to dismiss the government (even if it retained majority support in the Landtag); the referendum also gave citizens the right to call a vote of confidence in the prince, which could result in his removal.

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