Liechtenstein (lĬkh´tənshtīn´), officially Principality of Liechtenstein, principality (2005 est. pop. 33,700), 62 sq mi (160 sq km), W central Europe. It is situated in the Alps between Austria and Switzerland and is bounded in the west by the Rhine River. Vaduz is the capital.
Land, People, Economy, and Government
The country is mainly mountainous, with the Rhine valley in its western third. The population is largely Roman Catholic, with a Protestant minority. German is the national language; Alemannic, a High German dialect, is also spoken. There is a large component of foreign workers.
Historically agricultural, Liechtenstein has been increasingly industrialized, with industry and services now employing most of the workforce. Only a small fraction of the population still engages in agriculture, producing wheat, barley, corn, potatoes, livestock, and dairy products. The leading manufactures include electronics, metals, dental products, ceramics, pharmaceuticals, and precision and optical instruments. A large part of the production is exported. Tourism is an increasingly important industry. About a third of state revenues are derived from the many international corporations that are headquartered in Liechtenstein because of the low business taxes. The stable political environment and the secrecy of its financial institutions contributed to Liechtenstein's development as a banking center and tax haven, but that secrecy has been diminished in the 21st cent. under pressure from foreign governments. Agricultural products, raw materials, fuels, machinery, metal goods, foodstuffs, textiles, and motor vehicles are imported. The main trading partners are the European Union countries and Switzerland.
Liechtenstein is a constitutional monarchy governed under the constitution of 1921 as amended. The hereditary monarch is the head of state and has significant executive power. The head of government is appointed by the monarch, and the cabinet is elected by the legislature. Members of the 25-seat unicameral Parliament or Landtag are elected by popular vote for four-year terms. Liechtenstein uses Swiss currency and is represented abroad through Switzerland. Administratively, Liechtenstein is divided into 11 communes.
The Liechtenstein ruling house is an old Austrian family. The principality was created in 1719 by uniting the county of Vaduz with the barony of Schellenburg. The princes, vassals of the Holy Roman emperors, also owned huge estates (many times larger than their principality) in Austria and adjacent territories; they rarely visited their country but were active in the service of the Hapsburg monarchy. Liechtenstein became independent in 1866, after having been a member of the German Confederation from 1815 to 1866.
The principality escaped the major upheavals of the 19th and 20th cent. Prince Hans Adam II succeeded to the throne in 1989 after the death of his father, Francis Joseph II, and has had a number of conflicts with the parliament due to his attempts to have a significant role in running the government, particularly its economic policy. In 2003 voters approved a number of constitutional amendments that the prince had demanded, including giving him the right to dismiss the government and approve judicial nominees; his power to veto legislation and referendum results was preserved then and also by a 2012 referendum. In 2004 Prince Alois became regent for his father and assumed responsibility for the everyday affairs of state.
See P. Raton, Liechtenstein: History and Institutions of the Principality (1970); T. A. Larke, Index and Thesaurus of Liechtenstein (1984).