History

At one time, the territory of Liechtenstein formed a part (albeit a diminutive one) of the ancient Roman province of Raetia. For centuries this territory, geographically removed from European strategic interests, had little impact on the tide of European history. Prior to the reign of its current dynasty, the region was enfeoffed (i.e. given in exchange for a pledge of service) to a line of the counts of Hohenems.

The Liechtenstein dynasty, from which the Principality takes its name (rather than vice-versa), comes from Castle Liechtenstein in faraway Lower Austria, which the family possessed from at least 1140 to the 13th century, and from 1807 onwards. Through the centuries, the dynasty acquired vast swathes of land, predominantly in Moravia, Lower Austria, Silesia and Styria, though in all cases, these territories were held in fief under other more senior feudal lords, particularly under various lines of the Habsburg family, to whom several Liechtenstein princes served as close advisors. 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 greatly for the added power which a seat in the Imperial government would garner, and therefore searched for lands to acquire which would be held without any feudal personage other than the Holy Roman Emperor himself having rights on the land. After some time, the family was able to arrange the purchase of the minuscule Herrschaft ("Lordship") of Schellenberg and countship of Vaduz (in 1699 and 1712 respectively) from the Hohenems. Tiny Schellenberg and Vaduz possessed 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, Charles VI, Holy Roman Emperor decreed Vaduz and Schellenberg were united, and raised to the dignity of Fürstentum (principality) with the name "Liechtenstein" in honour of "[his] true servant, Anton Florian of Liechtenstein". It is on this date that Liechtenstein became a sovereign member state of the Holy Roman Empire. Ironically, but as testament to the pure political expediency of the purchases, the Princes of Liechtenstein did not set foot in their new principality for over 120 years.

Liechtenstein in the 19th Century

In 1806, most of the Holy Roman Empire was invaded by Napoleon I of the First French Empire. This event had broad consequences for Liechtenstein: imperial legal and political mechanisms broke down, while Francis II, Holy Roman Emperor abdicated the imperial throne and the Empire itself dissolved. As a result, Liechtenstein ceased to have 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. From 25 July 1806 when the Confederation of the Rhine was founded, the prince of Liechtenstein was a member, in fact a vassal of its hegemon, styled protector, French Emperor Napoleon I Bonaparte, until the dissolution of the Confederation on 19 October 1813.

Then, in 1818, Johann I granted a constitution, although it was limited in its nature. 1818 also saw the first visit of a Member of the House of Liechtenstein (Prince Alois). However, the first visit by a sovereign prince would not occur till 1842.

Soon after, Liechtenstein joined the German Confederation (20 June 1815 - 24 August 1866, presided over by the Emperor of Austria).

Liechtenstein also had many advances in the 19th century; in 1836 the first factory was opened, which made ceramics. In 1861, the Savings and Loans Bank was founded, and the first cotton-weaving mill was also opened. Two bridges over the Rhine were built in 1868, and then in 1872 a railway line across Liechtenstein was constructed.

Liechtenstein in the 20th Century

Until the end of World War I, Liechtenstein was closely tied first to the Austrian Empire and then to Austria-Hungary. However, the economic devastation caused by WWI forced the country to conclude a customs and monetary union with its other neighbour, Switzerland. The Army had already been disbanded in 1868, out of financial considerations. At the time of the dissolution of the Austro-Hungarian Empire, it was argued that Liechtenstein as a fief of the Holy Roman Empire (supposedly still incarnated in Liechtensteiner eyes at an abstract level in the person of the then-dethroned Austro-Hungarian Emperor, despite its formal dissolution in 1806) was no longer bound to Austria, then emerging as an independent state which did not consider itself as the legal successor to the Empire. Liechtenstein is thus the last independent state in Europe that can claim an element of continuity from the Holy Roman Empire.

In the spring of 1938, just after the annexation of Austria into Greater Germany, 84 year-old Prince Franz I abdicated, naming his 31 year-old third cousin, Prince Franz Joseph, as his successor. While Prince Franz I claimed that old age was his reason for abdicating, he had no desire to be on the throne if Germany gobbled up its new neighbour, Liechtenstein. His wife, whom he married in 1929, was a wealthy Viennese Jew and local Liechtenstein Nazis had already singled her out as their anti-Semitic "problem". Although Liechtenstein had no official Nazi party, a Nazi sympathy movement had been simmering for years within its National Union party.

During World War II, Liechtenstein remained neutral, while family treasures within the war zone were brought to Liechtenstein (and London) for safekeeping. At the close of the conflict, Czechoslovakia and Poland, acting to seize what they considered to be German possessions, expropriated the entirety of the Liechtenstein dynasty's hereditary lands and possessions in Bohemia, Moravia and Silesia - the Princes of Liechtenstein lived in Vienna until the Anschluss of 1938. The expropriations (subject to modern legal dispute at the World Court) included over 1,600 square kilometres (600 sq mi) of agricultural and forest land, including also several family castles and palaces. It is thus little wonder that during the decades of the Cold War, citizens of Liechtenstein were forbidden from entering Czechoslovakia.

Liechtenstein gave asylum to approximately five hundred soldiers of the First Russian National Army (a collaborationist Russian force within the German Wehrmacht) at the close of World War II; this is commemorated in a monument at the border town of Hinterschellenberg, and is marked on the country's tourist map. The act of granting asylum was no small matter as the country was poor and had difficulty feeding and caring for such a large group of refugees. Eventually, Argentina agreed to permanently resettle the asylum seekers. In contrast, the British repatriated similar groups of Russian soldiers back to Soviet forces.

In dire financial straits following the war, the Liechtenstein dynasty often resorted to selling family artistic treasures, including for instance the priceless portrait "Ginevra de' Benci" by Leonardo da Vinci, which was purchased by the National Gallery of Art of the United States in 1967. However, the economic condition of Liechtenstein improved rapidly. During the decades following, Liechtenstein prospered, its economy modernising with the advantage of low corporate tax rates which drew many companies to the country.

Liechtenstein in the 21st Century

The Prince of Liechtenstein is the world's fifth wealthiest head of state, with an estimated wealth of $4 billion. The country's population enjoys one of the world's highest standards of living.