Liechtenstein part of European Economic Area
Foreign relations
In the absence of political or military power, Liechtenstein has sought to preserve its sovereignty over the past 200 years through membership in legal communities. International cooperation and European integration are therefore constants of Liechtenstein's foreign policy, aimed at continuing to safeguard the country's sovereignty as recognized under international law. Decisive for the domestic legitimacy and sustainability of this foreign policy were and are strong direct-democratic and citizen-oriented decision-making mechanisms, which are anchored in Liechtenstein in the Constitution of 1921.
Important historical stages in Liechtenstein's integration and cooperation policy were its accession to the Confederation of the Rhine in 1806, to the German Confederation in 1815, the conclusion of bilateral customs and currency agreements with the Habsburg monarchy in 1852, and finally the Customs Treaty with Switzerland in 1923, which was followed by a range of other important bilateral treaties.
Post-war economic reconstruction was followed by accession to the Statute of the International Court of Justice in 1950, Liechtenstein signed the CSCE Helsinki Final Act (today's OSCE) together with 34 other states in 1975, Liechtenstein joined the Council of Europe in 1978, and Liechtenstein was admitted to the United Nations (UN) on September 18, 1990. In 1991, Liechtenstein joined the European Free Trade Association (EFTA) as a full member, and since 1995 Liechtenstein has been a member of the European Economic Area (EEA) and the World Trade Organization (WTO). In 2008, Liechtenstein joined the Schengen/Dublin Agreement together with Switzerland. From an economic and integration policy perspective, relations within the framework of the EEA and the EU occupy a special position in Liechtenstein's foreign policy. The Hereditary Prince of Liechtenstein also participates in the annual meetings of the heads of state of the German-speaking countries (consisting of EU and non-EU members).Relations with Switzerland are particularly extensive because of the close cooperation in many areas; Switzerland performs tasks in some places that would be difficult for the Principality to handle on its own because of its small size. Since 2000, Switzerland has appointed an ambassador to Liechtenstein, but he resides in Bern. Liechtenstein's consular representation has been mostly handled by Switzerland since the Customs Treaty with Switzerland of 1923.
Liechtenstein maintains direct diplomatic missions in Vienna, Bern, Berlin, Brussels, Strasbourg, and Washington, D.C., as well as Permanent Missions in New York and Geneva to the United Nations. Currently, diplomatic missions from 78 countries are accredited to Liechtenstein, but mostly reside in Bern. The Embassy in Brussels coordinates contacts with the European Union, Belgium, and also the Holy See.
For a long time, diplomatic relations with Germany were maintained through a non-resident ambassador; that is, a contact person who was not permanently resident in Germany. Since 2002, however, Liechtenstein has had a permanent ambassador in Berlin, while the German embassy in Switzerland is also responsible for the Principality. Liechtenstein's Ministry of Foreign Affairs considers the contacts to be extremely fruitful and important for the country's development, especially on the economic level.
Conflicts over the handling of banking and tax data have repeatedly strained relations with Germany. On 2 September 2009, Liechtenstein and Germany signed an agreement on cooperation and the exchange of information in tax matters. The text of the agreement followed the OECD model agreement and provides for an exchange of information on tax matters upon request as of the 2010 tax year. In addition, Liechtenstein regards Germany as an important partner in safeguarding its interests in European integration. At the cultural level, project sponsorship plays a particularly important role. For example, the Hilti Foundation financed the exhibition "Egypt's Sunken Treasures" in Berlin, and the state donated 20,000 euros following the fire at the Duchess Anna Amalia Library in Weimar.Economy
Despite its limited natural resources, Liechtenstein is one of the few countries in the world with more registered companies than citizens; it has developed a prosperous, highly industrialized free-enterprise economy and boasts a financial service sector as well as a living standard that compares favourably with those of the urban areas of Liechtenstein's much larger European neighbours.
Liechtenstein participates in a customs union with Switzerland and employs the Swiss franc as the national currency. The country imports about 85% of its energy. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995.
The government is working to harmonize its economic policies with those of an integrated Europe. In 2008, the unemployment rate was 1.5%. Liechtenstein has only one hospital, the Liechtensteinisches Landesspital in Vaduz. As of 2014 the CIA World Factbook estimated the gross domestic product (GDP) on a purchasing power parity basis to be $4.978 billion. As of 2009 the estimate per capita was $139,100, the highest listed for the world.Industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor bolts, calculators, pharmaceuticals and food products. Its most recognizable international company and largest employer is Hilti, a manufacturer of direct fastening systems and other high-end power tools. Many cultivated fields and small farms are found both in the Oberland and Unterland. Liechtenstein produces wheat, barley, corn, potatoes, dairy products, livestock and wine.
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