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LIECHTENSTEIN
The Principality of
Liechtenstein (pronounced LEEKH-ten-shtine) is a small landlocked country in
central Europe, bordered by Switzerland to its west and by Austria to its
east. Being mountainous, it is a winter sports resort. It is also known as a
tax haven.
History
The modern territory of Liechtenstein was at one time an (albeit diminutive)
part of the ancient Roman province of Raetia. For centuries this territory,
geographically removed from European strategic interests, made little impact
on the tide of European history. Prior to current dynasty, the region was
enfiefed to a junior line of the House of Hapsburg. The current ruling House
of Liechtenstein originates in faraway Silesia.
The Liechtenstein
dynasty, from which the Principality takes its name (rather than vice-versa)
was among the wealthiest of the late medieval German noble families. However,
and although they owned vast swathes of land in the German area, all these
expansive territories were held in fief under other more senior feudal lords,
particularly under various lines of the Hapsburg family. Thus, and 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, the Reichstag.
The family yearned for the added power which a seat in the Imperial
government would garner, and therefore it searched for a land acquisition
which would be "unmittelbar" or held without any feudal personage other than
the Emperor having rights on the land. After some time, the family was able
to arrange the purchase of the minuscule counties of Schellenberg and Vaduz
in 1699 and 1712 respectively from an agnatic line of the Hapsburg dynasty.
Tiny Schellenberg and Vaduz possesed exactly the political status required,
no feudal lord other than their comital sovereign and the suzerain Emperor.
Thereby, on January 23, 1719 after purchase had been duly made, Emperor
Charles VI decreed that the counties of Vaduz and Schellenberg be raised to
the dignity of principality with the name Liechtenstein in honor of his 'true
servant, Anton Florian of Liechtenstein'. It is on this date that
Liechtenstein became a sovereign state of the Holy Roman Empire. Ironically,
but as testament to the pure political-expediency of the purchases, the
Princes of Liechtenstein never set foot in their new principality for
several decades.
In 1806, the Holy Roman Empire was invaded by France. This event had broad
consequences for Liechtenstein. Imperial legal and political mechanisms
broke down, while the Holy Roman Emperor abdicated. The Empire itself
dissoved. As a result, Liechtenstein ceased having any obligations to any
feudal lord beyond its borders. Modern publications generally (although
incorrectly) attribute Liechtenstein's 'sovereignty' to these events. In
reality, its prince merely became suzerain as well as remaining sovereign
lord.
Until the end of World War I, Liechtenstein was closely tied to Austria, but
the economic devastation caused by that conflict forced the country to
conclude a customs and monetary union with Switzerland. During World War II,
Liechtenstein remained neutral, while family treasures within the war zone
were brought to Liechtenstein (and London) for safe keeping. At the close of
the conflict, Czechoslovakia and Poland, acting to seize "German"
possessions, expropriated the entirety of the Liechtenstein dynasty's
hereditary lands and possessions in Bohemia, Moravia and Silesia. The
exapropriations (subject to modern legal dispute at the World Court)
included over 1,600 km˛ of farm and forestland along with several family
castles and palaces. It is thus little wonder that during the decades of the
Cold War, citizens of Liechtenstein were forbidden by Czechoslovakia from
even entering that country.
In financial straits following the war, the Liechtenstein dynasty often
resorted to selling family artistic treasures, including for instance Da
Vinci's priceless portrait "Ginevra de Benci", which was purchased by the
United States government. However, the economic condition of Liechtenstein
rapidly improved. During the decades following, Liechtenstein prospered, its
economy quickly modernizing with the advantage of low corporate tax rates
which drew many companies to the country.
The Prince of Liechtenstein is among the world's wealthiest heads-of-state
with an estimated wealth of some 2 billion dollars. The country's population
enjoys one of the world's highest standards-of-living.
Politics
Liechtenstein is a parliamentary democracy, headed by the prince, or Fürst,
currently Hans-Adam II of Liechtenstein, who succeeded his father after his
death in 1989.
The parliament of Liechtenstein, the Landtag, consists of 25 representatives
chosen by the people. A cabinet of five men and women is responsible for
taking care of daily political matters.
In a referendum on July 1, 1984, male voters granted women the right to vote
in national (but not local) elections, a victory for Prince Hans-Adam who
had supported the legislation.
Unlike many other constitutional monarchies, the constitution of
Liechtenstein gives many important powers to the Prince, some of which have
caused controversy in recent years.
Critics were however largely discredited when a March 2003 popular
referendum bolstered the Liechtenstein dynasty's constitutional position.
Prior to the referendum, Prince Hans-Adam had announced that he and his
family would relocate to Vienna, Austria, leaving Liechtenstein to become a
republic if the House's constitutional rights were curbed. The referendum
confirmed the broad popularity of the Liechtenstein dynasty and the
populace's faith in the Prince Hans-Adam as leader.
Communities
Liechtenstein is divided into eleven communities (Gemeinden - singular
Gemeinde), most consisting of only a single town. These are:
Vaduz
Schaan
Balzers
Triesen
Eschen
Mauren
Triesenberg
Ruggell
Gamprin
Schellenberg
Planken
Geography
Liechtenstein is situated in the Rhine valley in the Alps. The entire
western border of Liechtenstein is formed by this river. The eastern part of
the country is located at higher altitude, the highest point being the
Grauspitz, at 2,599 m (8,527 ft.).
Despite its alpine location, prevailing southerly winds make the climate of
Liechtenstein rather mild. In winter, the mountain slopes are well suited to
winter sports.
Liechtenstein is one of only two double landlocked countries in the world,
i.e. a country that is surrounded by other landlocked countries. The other
example is Uzbekistan.
Economy
Despite its small size and limited natural resources, Liechtenstein has
developed into a prosperous, highly industrialised, free-enterprise economy
with a vital financial service sector and living standards on a par with
those of the urban areas of its large European neighbours. Low business
taxes – the maximum tax rate is 18% – and easy incorporation rules have
induced about 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 organisation serving as a bridge between the European Free Trade
Association (EFTA) and the European Union) since May 1995. The government is
working to harmonise its economic policies with those of an integrated
Europe.
Demographics
Liechtenstein is the fourth smallest country of Europe, after the Vatican
City, Monaco, and San Marino. Its resident population is approximately
one-third foreigners, mainly Germans, Austrians and Swiss.
The official language is German, though most speak an Alemannic dialect of
German. About 76% of the population is Roman Catholic, 7% is Protestant.
Apart from the prince, the most famous person from Liechtenstein is Hanni
Wenzel, of German origin, who won two Olympic titles in 1980 in alpine
skiing.
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