The Last of the German Monarchies: Liechtenstein

by Paul A. Schons

Originally published by the Germanic-American Institute in October, 2002

Nestled between Austria and Switzerland, the very existence of tiny Liechtenstein is overlooked by many who travel to Europe. In fact, unless one has a fairly detailed map of Europe, Liechtenstein may not even be shown on the map. The tiny German speaking nation occupies only 62 square miles and is home to only 32,000 people. Liechtenstein has no national currency of its own; it uses the Swiss Frank. It has no university. Young people seeking a university education travel to universities in Switzerland. Liechtenstein spends 0 % of its GNP on military costs, having no standing army. The national army was abolished in 1868. Liechtenstein has no national debt. The nation has one hospital and32 physicians.

Liechtenstein’s lowest geographical point lies on the banks of the Rhine River at about1,000 feet above sea level. From its source in Switzerland, the Rhine flows through the length of Liechtenstein before returning to Switzerland and then continuing on northwest to Germany. At its highest point Liechtenstein occupies the peak of an alpine mountain, reaching to an altitude of 8,600 feet. Two -thirds of the country is mountainside.

Liechtenstein is a constitutional monarchy. The chief of state is currently Prince Hans-Adam II, who has ruled since 1989 after the death of his father, Franz Josef II. The position of the prince is hereditary, being passed from father to first-born son. Through its constitution, Liechtenstein also has an elected legislature. The head of the civil government is the prime minister.

The name Liechtenstein predates the country by several hundred years. The first Liechtenstein was an Austrian nobleman who in 1136 took the name Liechtenstein from a castle which was located south of Vienna, Burg Liechtenstein. The title of prince was granted in 1623 as a reward to Karl von Liechtenstein for service to the Habsburg empire. For nearly 100 years, though, the family suffered the indignity of holding the title without having a proper territory within the empire. Finally in 1699 Prince Johann Adam I was able to purchase the territory of Schellenberg and in 1712 he was able to buy the adjacent territory of Vaduz. The two territories which now comprise the nation of Liechtenstein were elevated to the rank of a principality of the Holy Roman Empire by action of the Kaiser (emperor) on January 23, 1719. However, the princely family itself was little interested in living in their new domain. The attractions of Vienna were of much more interest to them than the tiny bit of land on the side of a mountain far off to the west. The family did not move the permanent residence to Liechtenstein until 1938. The reigning prince at the time of the move was Franz Josef II.

Since 1719 Liechtenstein had been a principality within the Holy Roman Empire. But in1799 the Empire was attacked and brought to an end by Napoleon. Liechtenstein was occupied by French troops in 1799. At the time of the final collapse of the Holy Roman Empire in 1806 Liechtenstein became an independent state and joined the Confederation of the Rhine. In 1815 through the action of the Congress of Vienna, Liechtenstein became a part of the German Confederation.

In 1852 Liechtenstein entered into an economic union with Austria. The first significant industry, a textile mill, was opened shortly thereafter and in 1861 the first bank was established. In 1862 a constitution was adopted and the first legislature was convened. Liechtenstein remained neutral during World War I, but due to economic ties with Austria suffered a great deal of hardship during that period. At the end of the war the ties to Austria were severed and a new economic partnership with Switzerland was established. In the years leading up to World War II there was an active group which was sympathetic to the Nazi party, the “Volksdeutsche Bewegung in Liechtenstein”, but the group was unable to gain significant influence and the country remained neutral and in partnership with Switzerland during the war.

In the postwar period Liechtenstein developed rapidly from an agrarian economy to a modern service economy. Banking became a mainstay of the economy. The very secretive numbered bank accounts of Liechtenstein have led to massive international investment in the banks of the tiny alpine principality.

Liechtenstein is predominately Catholic today. The population has been Christian since the 4th century. During the times of the Reformation and the 30 Years War Liechtenstein, as an area south and east of the lines of conflict, remained within the influence of the Roman Church.

The capital city of Vaduz, with a population of 4,927, is situated in the Rhine valley. The family castle of the prince is located on a hill overlooking the capital city. Vaduz is a favorite with tourists who can reach the main post office easily by train, bus or automobile and thus quickly buy the Liechtenstein postage stamps which are a treat for stamp collectors. Tourists would do well, however, to spend a bit more time in Liechtenstein and travel up to some of the charming villages higher up on the mountainsides. The 8,000 foot vertical rise of the country offers, from the higher elevations, some spectacular panoramic views down to the Rhine river, and across to the countrysides of Switzerland and Austria. On the mountainsides there is the opportunity for excellent mountain hiking in the summer and fine skiing in the winter.