Principality of Liechtenstein

Type of Government

The Principality of Liechtenstein is a constitutional monarchy with powers divided between monarchic, executive, legislative, and judicial branches of government. The monarch serves as head of state while an appointed prime minister serves as head of government. The legislative branch is unicameral (has one house) and is elected by popular vote. The judiciary is independent of the legislative and executive branches, with justices elected by the legislature and approved by the monarch and prime minister.

Background

Liechtenstein is a small, inland nation located on the eastern bank of the Rhine River between Austria and Switzerland. Most Liechtensteiners are descended from the Allemanni, a confederation of Germanic tribes that occupied the Rhine River region in the sixth century.

The royal House of Liechtenstein was established in the thirteenth century and was closely associated with the Habsburg Kingdom of Austria. The Liechtenstein family aided the Hapsburgs in defending their kingdom against the invading armies of King Otakar II (1230–1278) of Bohemia. As subjects of the Holy Roman Empire, which controlled portions of Europe from the ninth to the nineteenth centuries, the Liechtenstein family expanded their territory by purchasing the districts of Schellenberg in 1699 and Vaduz in 1712. In 1719 Emperor Leopold II (1747–1792) made Liechtenstein an independent principality of the empire.

Government Structure

Liechtenstein is a constitutional monarchy with a parliamentary government. All citizens over eighteen years of age are allowed to vote. The nation is divided into two broad electoral districts, the Oberland (Upper Country) and Unterland (Lower Country), which are further divided into eleven communes, each with a locally elected government.

The reigning monarch (the Prince of Liechtenstein) is constitutionally designated as the head of state. The prince appoints a prime minister from among the members of parliament to serve as the head of government. With the approval of the prime minister and parliament, the prince has the power to appoint members to the judiciary, negotiate treaties and international agreements, declare emergency orders, and institute legislation through decree. Constitutional amendments adopted in 2003 give the prince the power to dissolve parliament in cases of deadlock.

The prime minister serves as head of government and is generally the leader of the majority party in parliament. The prince additionally appoints four government councillors (two from each electoral district) to assist the prime minister in leading the executive office. The executive government is known as the “collegial body.”

The legislative branch of the government consists of the Landtag (parliament), with twenty-five members elected by popular vote to serve renewable, four-year terms. Within the two districts, each political party is awarded parliamentary seats in proportion to the total number of votes received in the elections. Only parties receiving more than 8 percent of the popular vote are permitted to serve in parliament.

The parliament has the power to nominate members for the executive and judicial branches and to originate and amend legislation. All legislation must be approved by both the prince and the prime minister before becoming law. Parliament also has the power to approve and amend budgetary proposals, international agreements, constitutional amendments, and executive orders.

The judicial branch consists of the Constitutional Court, Supreme Court, and the Court of Appeal. All justices are elected by the parliament and appointed by the reigning monarch. The Constitutional Court consists of five justices elected for five-year, renewable terms and has jurisdiction over all cases involving constitutional law, treaties, and international agreements. The Supreme Court consists of two justices and three assessors who exercise final appellate jurisdiction over all civil and criminal proceedings.

Political Parties and Factions

Leichtenstein’s two most important political parties are the Patriotic Union (Vaterländische Union and the Progressive Citizens Party (Fortschrittliche Bürgerpartei; FBP). From 1939 to 1997 the VU joined with the FBP to create a coalition government. The VU is regarded as the more liberal of the two parties, while the FBP is more conservative. The Free List Party (Freie Liste; FL) was formed in 1985 by a coalition of minor parties supporting environmentalism and other progressive causes. During the party’s first two elections, in 1986 and 1989, the FL was unable to meet the 8-percent requirement to serve in the legislature. Since 1993 the Free List Party has served continually in the parliament, and in the 2005 elections they earned three seats, preventing the major parties from obtaining an absolute majority.

Major Events

In 1806, during the Napoleonic Wars, Liechtenstein briefly became a territory of France but later regained its independence as a member of the German Confederation, a union of thirty-nine states that succeeded the Holy Roman Empire in 1815. In 1818 the monarchy established the nation’s first parliament, consisting of appointed leaders and state clerics. The parliament had no significant authority until constitutional revisions in 1862, provided for partial democratization and popular elections.

When the German Confederation disbanded in 1866, Liechtenstein chose to remain independent and abolished its military in favor of a neutral foreign policy. Liechtenstein’s neutrality allowed the nation to avoid devastation during World War II, after which the government signed treaties with Switzerland establishing a close economic relationship.

In 1921 Liechtenstein adopted a new constitution intended to balance the distribution of power between the parliamentary and monarchic branches. The 1921 constitution required that all parliamentary members be elected by popular vote and gave parliament approval over legislation, appointments, and budgetary proposals. Women were not granted the right to vote in Liechtenstein until 1984.

Twenty-First Century

The balance of power between the monarchy and the government has been a perennial issue in Liechtenstein. Reigning Prince Hans Adam II (1945–) has attempted to establish a more active role for the monarchy. In 2003 voters approved a controversial referendum that gave the prince the powers to dissolve the parliament and approve judicial appointments.

Liechtenstein’s economy grew rapidly after World War II to become one of the strongest in Europe. The nation’s economic policies, including a low tax rate and a strict secrecy policy, helped to establish Liechtenstein as one of the world’s foremost centers for international banking but also encouraged criminal exploitation. In 2000, 2001, and 2006, the nation revised its economic policies to combat money laundering.

Beattie, David. Liechtenstein: A Modern History. New York: I. B. Taurus, 2004.

Eccardt, Thomas M. “Secrets of the Seven Smallest States of Europe: Andorra, Liechtenstein, Luxemborg, Malta, Monaco, San Marino and Vatican City.” New York: Hippocrene Books, 2005.

Portal of the Principality of Liechtenstein, http://www.liechtenstein.li/en/ (accessed July 7, 2007).