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Liechtenstein

History Book Review: Liechtenstein: A Modern History by David Beattie

This is the summary of Liechtenstein: A Modern History by David Beattie.

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Liechtenstein, officially the Principality of Liechtenstein (Listeni/ˈlɪktənstn/ lik-tən-stynGermanFürstentum LiechtensteinGerman pronunciation: [ˈfʏʁstn̩tuːm ˈlɪçtn̩ʃtaɪn), is a doubly landlocked alpine country in Central Europe, bordered by Switzerland to the west and south and by Austria to the east and north. Its area is just over 160 square kilometres (62 square miles), and it has an estimated population of 35,000. Its capital is Vaduz. The biggest town is Schaan. Liechtenstein has the highest gross domestic product per person in the world when adjusted by purchasing power parity, and has the world’s lowest external debt. Liechtenstein also has one of the lowest unemployment rates in the world at 1.5%.

Liechtenstein is the smallest yet the richest (by measure of GDP per capita)German-speaking country and the only country to lie entirely within the Alps. It is known as a principality as it is a constitutional monarchy headed by a prince. Liechtenstein is divided into 11 municipalities. Much of its terrain is mountainous, making it a winter sports destination. Many cultivated fields and small farms characterize its landscape both in the south (Oberland, upper land) and in the north (Unterland, lower land). The country has a strong financial sector located in the capital, Vaduz, and has been identified as a tax haven. It is a member of the European Free Trade Association and part of the European Economic Area and the Schengen Area, but not of the European Union.

History of Liechtenstein

Vaduz Castle, overlooking the capital, is home to the Prince of Liechtenstein

At one time, the territory was part of the ancient Roman province of Raetia. For centuries this territory, geographically removed from European strategic interests, had little impact on European history. Prior to the reign of its current dynasty, the region was enfeoffed to a line of the counts of Hohenems.

The Liechtenstein dynasty, from which the principality takes its name, comes from Castle Liechtenstein in Lower Austria, which the family possessed from at least 1140 until the 13th century, and from 1807 onward. Through the centuries, the dynasty acquired vast tracts of land, predominantly in Moravia,Lower AustriaSilesia, and Styria, though these territories were all held infief under other more senior feudal lords, particularly under various lines of the Habsburg family, whom several Liechtenstein princes served as close advisers. Thus, without any territory held directly under the Imperial throne, the Liechtenstein dynasty was unable to meet a primary requirement to qualify for a seat in the Imperial diet (parliament), the Reichstag.

The family yearned for the added power a seat in the Imperial government would bring and therefore sought to acquire lands that would be unmittelbar, or held without any feudal personage other than the Holy Roman Emperor having rights on the land. After some time, the family was able to arrange the purchase of the minuscule Herrschaft (“Lordship”) of Schellenberg and county of Vaduz (in 1699 and 1712 respectively) from the Hohenems. Tiny Schellenberg and Vaduz had exactly the political status required: no feudal lord other than their comital sovereign and the suzerain Emperor.

On 23 January 1719, after the lands had been purchased, Charles VI, Holy Roman Emperor, decreed that Vaduz and Schellenberg were united and elevated the newly formed territory to the dignity of Fürstentum (principality) with the name “Liechtenstein” in honour of “[his] true servant, Anton Florian of Liechtenstein.”  It was on this date that Liechtenstein became a sovereign member state of the Holy Roman Empire. It is a testament to the pure political expediency of the purchases that the Princes of Liechtenstein did not set foot in their new principality for over 120 years.

As a result of the Napoleonic Wars, by 1806 much of the Holy Roman Empire was under the effective control of French emperor Napoleon I. When the empire was dissolved, this had broad consequences for Liechtenstein: imperial, legal and political mechanisms broke down. The state ceased to owe obligations to any feudal lord beyond its borders.

Modern publications generally attribute Liechtenstein’s sovereignty to these events. Its prince ceased to owe obligations to any suzerain. From 25 July 1806 when the Confederation of the Rhine was founded, the Prince of Liechtenstein was a member, in fact a vassal of its hegemon, styled protector, the French Emperor Napoleon I, until the dissolution of the confederation on 19 October 1813.

Soon afterward, Liechtenstein joined the German Confederation (20 June 1815 – 24 August 1866) which was presided over by the Emperor of Austria.

Then, in 1818, Johann I granted the territory a limited constitution. 1818 also saw the first visit of a member of the house of Liechtenstein, Prince Alois; however, the first visit by a sovereign prince would not occur until 1842.

Developments during the 19th century included:

  • In 1836, the first factory was opened, making ceramics.
  • In 1861, the Savings and Loans Bank was founded, as was the first cotton-weaving mill.
  • Two bridges over the Rhine were built in 1868, and in 1872 a railway line across Liechtenstein was constructed.

20th and 21st Century

Until the end of World War I, Liechtenstein was closely tied first to the Austrian Empire and later to Austria-Hungary; the ruling princes continued to derive much of their wealth from estates in the Habsburg territories, and they spent much of their time at their two palaces in Vienna. The economic devastation caused by this war forced the country to conclude a customs and monetary union with its other neighbour, Switzerland. Liechtenstein’s army was disbanded in 1868 for financial reasons.

At the time of the dissolution of the Austro-Hungarian Empire, it was argued that Liechtenstein, as a fief of the Holy Roman Empire, was no longer bound to the emerging independent state of Austria, since the latter did not consider itself as the legal successor to the empire. This is partly contradicted by the coeval Liechtenstein perception that the dethroned Austro-Hungarian Emperor still maintained an abstract heritage of the Holy Roman Empire.

In 1929, 75-year-old Prince Franz I succeeded to the throne. Franz had just married Elisabeth von Gutmann, a wealthy Jewish woman from Vienna. Although Liechtenstein had no official Nazi party, a Nazi sympathy movement arose within its National Union party. Local Liechtenstein Nazis identified Elizabeth as their Jewish “problem.”

In March 1938, just after the annexation of Austria by Nazi Germany, Prince Franz named as regent his 31-year-old first cousin twice removed and heir-presumptive, Prince Franz Joseph. Franz died in July that year, and Franz Joseph succeeded to the throne.

During World War II, Liechtenstein remained officially neutral, looking to neighboring Switzerland for assistance and guidance, while family treasures within the war zone were taken to Liechtenstein for safekeeping. At the close of the conflict, Czechoslovakia and Poland, acting to seize what they considered to be German possessions, expropriated the entirety of the Liechtenstein dynasty’s hereditary lands and possessions in BohemiaMoravia, and Silesia. The expropriations (subject to modern legal dispute at the International Court of Justice) included over 1,600 km2 (618 sq mi) of agricultural and forest land, and several family castles and palaces.

Citizens of Liechtenstein were forbidden to enter Czechoslovakia during the Cold War. More recently the diplomatic conflict revolving around the controversial post-war Beneš decrees resulted in Liechtenstein not sharing international relations with the Czech Republic or Slovakia. Diplomatic relations were established between Liechtenstein and the Czech Republic on 13 July 2009, and with Slovakia on 9 December 2009.

Liechtenstein gave asylum to about 500 soldiers of the First Russian National Army (a collaborationist Russian force within the German Wehrmacht) at the close of World War II. About 200 of the group somewhat voluntarily agreed to return to the USSR. They departed in a train to Vienna and nothing was ever heard of them again. The remainder stayed in Liechtenstein for another year, resisting, with support from Liechtenstein, further pressure by the Soviet government to participate in the repatriation programme. (In contrast, due to agreements made during the Yalta Conference, the western Allies repatriated Soviet citizens.) Eventually the government of Argentina offered asylum and about a hundred people left. This is commemorated by a monument at the border town of Hinterschellenberg.

In dire financial straits following the war, the Liechtenstein dynasty often resorted to selling family artistic treasures, including the priceless portrait “Ginevra de’ Benci” by Leonardo da Vinci, which was purchased by the National Gallery of Art of the United Statesin 1967. Liechtenstein prospered, however, during the decades following, as it used its low corporate tax rates to draw many companies to the country.

The Prince of Liechtenstein is the world’s sixth wealthiest monarch with an estimated wealth of USD $5 billion.  The country’s population enjoys one of the world’s highest standards of living.

Government

The centre of government in VaduzPolitics of Liechtenstein

Liechtenstein has a constitutional monarch as Head of State, and an elected parliament which enacts law. It is also a direct democracy, where voters can propose and enact constitutional amendments and legislation independent of the legislature. The Constitution of Liechtenstein was adopted in March 2003, replacing the previous 1921 constitution which had established Liechtenstein as a constitutional monarchy headed by the reigning prince of the Princely House of Liechtenstein. A parliamentary system had been established, although the reigning Prince retained substantial political authority.

The reigning Prince is the head of state and represents Liechtenstein in its international relations (although Switzerland has taken responsibility for much of Liechtenstein’s diplomatic relations). The Prince may veto laws adopted by parliament. The Prince can call referenda, propose new legislation, and dissolve parliament, although dissolution of parliament may be subject to a referendum.

Executive authority is vested in a collegiate government comprising the head of government (prime minister) and four government councilors (ministers). The head of government and the other ministers are appointed by the Prince upon the proposal and concurrence of parliament, thus reflecting the partisan balance of parliament. The constitution stipulates that at least two members of the government be chosen from each of the two regions.  The members of the government are collectively and individually responsible to parliament; parliament may ask the Prince to remove an individual minister or the entire government.

Legislative authority is vested in the unicameral Landtag made up of 25 members elected for maximum four-year terms according to a proportional representation formula. Fifteen members are elected from the “Oberland” (Upper Country or region) and ten members are elected from the “Unterland” (Lower Country or region). Parties must receive at least 8% of the national vote to win seats in parliament, i.e. enough for 2 seats in the 25 seat legislature. Parliament proposes and approves a government, which is formally appointed by the Prince. Parliament may also pass votes of no confidence in the entire government or individual members.

Parliament elects from among its members a “Landesausschuss” (National Committee) made up of the president of the parliament and four additional members. The National Committee is charged with performing parliamentary oversight functions. Parliament can call for referenda on proposed legislation. Parliament shares the authority to propose new legislation with the Prince and with the number of citizens required for an initiative referendum.

Judicial authority is vested in the Regional Court at Vaduz, the Princely High Court of Appeal at Vaduz, the Princely Supreme Court, the Administrative Court, and the State Court. The State Court rules on the conformity of laws with the constitution and has five members elected by parliament.

On 1 July 1984, Liechtenstein became the last country in Europe to grant women the right to vote. The referendum on women’s suffrage, in which only men were allowed to participate, passed with 51.3% in favor.

New Constitution

In a national referendum in March 2003, nearly two-thirds of the electorate voted in support of Hans-Adam II’s proposed new constitution to replace the 1921 one. The proposed constitution was criticised by many, including the Council of Europe, as expanding the powers of the monarchy (continuing the power to veto any law, and allowing the Prince to dismiss the government or any minister). The Prince threatened that if the constitution failed, he would, among other things, convert some of the royal property for commercial use and move to Austria. The princely family and the Prince enjoy tremendous public support inside the nation, and the resolution passed with about 64% in favour.  A proposal to revoke the Prince’s veto powers was rejected by 76% of voters in a 2012 referendum.

http://en.wikipedia.org/wiki/Liechtenstein

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