Overview
Liechtenstein is a doubly landlocked country located in the Central European Alps, positioned between Austria to the east and north-east and Switzerland to the north-west, west and south. As a microstate, it is Europe's fourth-smallest country, with an area of just over 160 square kilometres (62 square miles) and a population of 41,389. It holds the distinction of being the world's smallest country to border two countries.
Government and Politics
Liechtenstein is a monarchy headed by the Prince of Liechtenstein. Hans-Adam II has reigned over the country since 1989. Following a constitutional referendum in 2003, the monarch was granted greater powers, including the ability to dismiss the government, nominate judges, and veto legislation—a position that was reaffirmed in 2012. Unlike many constitutional monarchies, the Prince of Liechtenstein is not merely a figurehead.
The official language is German, and the country is divided into 11 municipalities. Vaduz serves as the capital, while Schaan is the largest municipality.
International Relations and Membership
Liechtenstein is a member of several international organizations, including:
- The United Nations
- The European Free Trade Association
- The Council of Europe
- The Schengen Area
- The European Economic Area
The country is not a member state of the European Union. However, Liechtenstein maintains a customs union and a monetary union with Switzerland, using the Swiss franc as its currency. Notably, Liechtenstein is one of the few countries with no national debt.
Economy
Liechtenstein has a strong financial sector centered in Vaduz. The principality was once known as a billionaire tax haven, reaching prominence in this regard until a tax affair in 2008. Since that time, Liechtenstein has made significant efforts to shed its reputation as a tax haven.
Geography and Tourism
As an Alpine country, Liechtenstein is predominantly mountainous, which has made it an attractive destination for winter sports enthusiasts.
History
Early Settlement and Antiquity
The oldest traces of human existence in the area date back to the Middle Paleolithic era, with Neolithic farming settlements appearing in the valleys around 5300 BC. During the late Iron Age, the Hallstatt and La Tène cultures flourished in the region from around 450 BC. The Vennones occupied the Alpine Rhine valley during the Iron Age and into the Roman era.
In 58 BC, Julius Caesar defeated the Alpine tribes at the Battle of Bibracte, bringing the region under Roman control. By 15 BC, the Roman generals Tiberius and Drusus conquered the entire Alpine area. The territory was then integrated into the Roman province of Raetia, with the Romans maintaining legionary camps at Brigantium (present-day Bregenz, Austria) and Magia (Maienfeld, Switzerland).
Around 260 AD, the Alemanni, a Germanic people, destroyed Brigantium and subsequently settled in the area around 450 AD.
Medieval Period
During the Early Middle Ages, the Alemanni settled the region, and by the 6th century, the area became part of the Frankish Empire following Clovis I's victory over the Alemanni at Tolbiac in 504. The territory remained under Frankish hegemony through the Merovingian and Carolingian dynasties until the Treaty of Verdun in 843 divided the Carolingian empire following Charlemagne's death.
The territory that would become Liechtenstein formed part of East Francia and was later reunified with Middle Francia under the Holy Roman Empire around 1000. Until approximately 1100, Romansch was the predominant language; German subsequently gained ground in the territory. In 1300, the Walsers, an Alemannic population from Valais, settled in the region, with their dialect still preserved in the mountain village of Triesenberg.
By 1200, dominions across the Alpine plateau were controlled by the Houses of Savoy, Zähringer, Habsburg, and Kyburg. When the Kyburg dynasty fell in 1264, the Habsburgs extended their territory eastward. In 1396, Vaduz gained imperial immediacy, becoming subject directly to the Holy Roman Emperor.
Formation of the Principality
The Liechtenstein family, from which the country takes its name, originally possessed Liechtenstein Castle south of Vienna in Lower Austria from at least 1140 onwards. The family acquired extensive lands in Moravia, Lower Austria, Silesia, and Styria, but these were held in feudal tenure from more senior feudal lords, limiting their political power in the Holy Roman Empire.
To gain the required political status, the family sought to acquire lands held directly from the Holy Roman Emperor without intermediate feudal tenure. During the early 17th century, Karl I of Liechtenstein was made a prince by Holy Roman Emperor Matthias. Hans-Adam I subsequently purchased the Herrschaft of Schellenberg in 1699 and the county of Vaduz in 1712 from the Hohenems family. These territories had the necessary political status of having no feudal superior other than the emperor.
On 23 January 1719, after these purchases, Holy Roman Emperor Charles VI decreed that Vaduz and Schellenberg were united and elevated to the dignity of an imperial principality with the name "Liechtenstein" in honour of Anton Florian of Liechtenstein. On this date, Liechtenstein became a mostly-sovereign immediate member state of the Holy Roman Empire.
Independence and Modern Era
By the early 19th century, the Holy Roman Empire came under French control following Napoleon's victory at Austerlitz in 1805. In 1806, Emperor Francis II abdicated and dissolved the Holy Roman Empire after more than 960 years of feudal government. Napoleon reorganized much of the territory into the Confederation of the Rhine, which fundamentally changed Liechtenstein's political status by dissolving historical imperial, legal, and political institutions.
From 25 July 1806, the Prince of Liechtenstein became a member of the Confederation of the Rhine until its dissolution on 19 October 1813. Subsequently, Liechtenstein joined the German Confederation (20 June 1815 – 23 August 1866), presided over by the Emperor of Austria.
In 1818, Prince Johann I granted the territory a limited constitution. Prince Aloys became the first member of the House of Liechtenstein to visit the principality in 1818, with the next visit not occurring until 1842. Upon the dissolution of the German Confederation in 1866, Liechtenstein became fully independent. The Liechtenstein Army was abolished for financial reasons in February 1868.
During the 19th century, key developments included the construction of a railway line between Switzerland and the Austro-Hungarian Empire through Liechtenstein in 1872, the appointment of Carl von In der Maur as Governor in 1884, and the construction of two bridges over the Rhine to Switzerland in 1886.
Until the end of World War I, Liechtenstein remained closely tied to the Austrian Empire and later Austria-Hungary, with the ruling princes deriving much of their wealth from estates in Habsburg territories. During World War I, the country officially remained neutral.