Liechtenstein

When the Habsburg monarchy was abolished after World War I (1914-1918), Liechtenstein developed close connections with neutral Switzerland. In 1919, Liechtenstein gave Switzerland authority over its diplomatic relations. It adopted the Swiss currency in 1921 and in 1924 joined with Switzerland in a customs union.

Prince Franz Joseph II, who became Liechtenstein’s monarch in 1938, yielded executive authority in 1984 to his son and heir, Crown Prince Hans Adam II. Hans Adam succeeded his father in 1989. Also in 1984, a referendum granted women the right to vote in national elections for the first time. However, women were still excluded from voting in three of Liechtenstein’s 11 communes until 1986, when women finally gained full voting rights throughout the principality.

Liechtenstein joined the United Nations in 1990 and the European Free Trade Association (EFTA) as a full member in 1991. In 1995 Liechtenstein became a member of the European Economic Area (EEA), a free trade zone, and the World Trade Organization (WTO). By joining the EEA, Liechtenstein gained access to the internal market of the European Union (EU).

In February 1993 Markus Buechel of the Progressive Citizens’ Party was elected prime minister. Buechel inherited a coalition government—made up of his own party and the Fatherland Union—that had ruled the country since 1938. In September, the parliament passed a no-confidence vote against Buechel, accusing him of refusing to work with other members of the government. Prince Hans Adam dissolved parliament and called new elections the following month. Mario Frick of the Fatherland Union was elected prime minister.

Frick was returned to office in April 1997. Shortly after the elections the Progressive Citizens’ Party announced it would leave the coalition with Frick’s Fatherland Union to become an official opposition party. For the first time in nearly 60 years, the two parties declined to govern together in a coalition. The Progressive Citizens’ Party defeated the Fatherland Union in parliamentary elections in 2001, and the party’s leader, Otmar Hasler, succeeded Frick as prime minister.

In March 2003 voters overwhelmingly approved a referendum that amended Liechtenstein’s constitution and dramatically expanded the ruling prince’s powers. Prince Hans Adam, who had long complained of being a ceremonial prince, had sought the constitutional revisions since the early 1990s. Hans Adam threatened to leave the principality for Vienna, Austria, if the referendum failed to pass. Opponents of the revisions, including Frick, called the measures undemocratic and argued that the prince’s great wealth and extensive business interests would lead to conflicts of interest. An expert commission established by the Council of Europe concluded that the amendments would be a “serious step backward” for Liechtenstein and could lead to the principality’s isolation within Europe.

After the referendum passed, Prince Hans Adam announced that he would begin handing over his royal duties to his son, Prince Alois, the heir to the monarchy. In August 2004 Prince Alois assumed control over day-to-day governing powers in Liechtenstein. Hans Adam remained head of state.