The history of Liechtenstein

Liechtenstein is a principality of about 41,000 people on the east bank of the upper Rhine, between Switzerland and Austria. Its land was Roman Raetia, then part of the medieval counties of the Alpine Rhine valley, until an Austrian noble family bought the two small territories of Schellenberg and Vaduz around 1700 to gain a seat among the princes of the Holy Roman Empire. Liechtenstein survived the end of that empire, Napoleon and the German Confederation as a sovereign state, and after the First World War it turned from Austria to Switzerland. Once a poor farming country, it has become one of the richest states in the world.

People were living on the valley's hills, above the marshy floor of the Rhine, by the fifth millennium BCE. Neolithic settlements have been found on the Lutzengüetle and Gutenberg hills near Eschen and Balzers, and Bronze and Iron Age sites show that the area was part of the Alpine cultures of the time. In the last centuries BCE it was inhabited by the Rhaetians, Alpine peoples whose language was probably related to Etruscan.

In 15 BCE Rome conquered the Alpine peoples, and the valley became part of the province of Raetia within the Roman Empire. A Roman road ran along the Rhine from northern Italy to Bregenz on Lake Constance, and remains of Roman villas have been found at Schaanwald and Nendeln. As Germanic raids grew in the late empire, the Romans built a fort at Schaan in the fourth century, where a Christian church followed.

After Roman rule ended in the fifth century, the Alemanni settled to the north while the valley remained part of Romance-speaking Raetia, centred on the bishopric of Chur. Under the Frankish Kingdom and Charlemagne's successors the region was organised as Lower Raetia, first recorded as a political unit in the early ninth century, and later became part of the duchy of Swabia within the Holy Roman Empire. German gradually replaced the local Romansh speech, and around 1300 Walser settlers from the Valais moved into the mountains above Triesenberg, where their dialect is still spoken.

The land passed among noble families of the region, among them the counts of Montfort and Werdenberg. In 1342 a division of the Werdenberg lands created the County of Vaduz, and by 1434 the lands of Vaduz and the Lordship of Schellenberg to the north had the borders that the principality has today. Later lords included the barons of Brandis and the counts of Sulz. During the Swabian War of 1499 Swiss Confederate troops burned Vaduz Castle. In the seventeenth century the lands suffered from the Thirty Years' War, plague and witch trials, in which more than 100 people were executed, and their indebted lords, the counts of Hohenems, were forced to sell.

The Liechtenstein family took its name from a castle south of Vienna and rose through service to the Habsburg Monarchy, acquiring vast estates in Bohemia, Moravia and Silesia and a princely title in 1608. To win a vote in the imperial assembly, however, a prince needed a territory held directly from the emperor. Prince Hans-Adam I bought Schellenberg in 1699 and Vaduz in 1712, and on 23 January 1719 Emperor Charles VI united them as the Principality of Liechtenstein. The princes continued to live in Vienna and governed through officials; no reigning prince visited until 1842.

In 1806 Napoleon made Liechtenstein a member of his Confederation of the Rhine, and with the dissolution of the Holy Roman Empire that year it became a sovereign state. It kept its independence at the Congress of Vienna and joined the German Confederation in 1815. A limited constitution was granted in 1818, and a fuller one in 1862 created an elected parliament, the Landtag. A customs treaty with Austria in 1852 tied the poor farming country to its larger neighbour. After the German Confederation dissolved following the war of 1866, Liechtenstein disbanded its small army in 1868 and has had none since.

Liechtenstein stayed neutral in the First World War, but its close ties with Austria brought an Allied embargo and severe food shortages. When Austria-Hungary collapsed, the country turned to Switzerland. The Swiss took over its diplomatic representation abroad in 1919, the Swiss franc replaced the Austrian currency in the early 1920s, and a customs union came into force in 1924 that remains the basis of relations between the two states. The constitution of 1921, still in force, balanced the powers of the prince with those of the people and the Landtag and introduced elements of direct democracy on the Swiss model.

The interwar years were difficult, with poverty, emigration and a banking scandal in 1928. In March 1938 Franz Joseph II became regent and, after succeeding his great-uncle that July, the first reigning prince to live permanently in Vaduz. Liechtenstein had a small pro-Nazi movement, and a coup attempt by local Nazis in March 1939 failed. The country stayed neutral throughout the Second World War and was never invaded by Nazi Germany. On 2 May 1945 the remnant of the 1st Russian National Army, about 500 people led by Boris Smyslovsky who had fought on the German side, crossed into Liechtenstein and was granted asylum. The principality did not hand them over to the Soviet Union; about 200 chose to return to the Soviet Union, and many of the rest later emigrated to Argentina.

After the war Czechoslovakia and Poland confiscated the princely family's large estates, treating the family as German. The dispute over these expropriations kept Liechtenstein from establishing diplomatic relations with the Czech Republic and Slovakia until 2009.

Low taxes, banking secrecy and a favourable company law brought rapid growth after the war. Liechtenstein became a financial centre and also built up a strong export industry in precision manufacturing, and it now has one of the highest incomes per person in the world, with many of its workers commuting from Switzerland and Austria. It joined the Council of Europe in 1978, the United Nations in 1990, the European Free Trade Association in 1991 and the European Economic Area in 1995, which gave it access to the EU's single market while keeping its customs union with Switzerland. Women won the vote in national elections only in 1984, after two earlier referendums had rejected it.

Prince Hans-Adam II succeeded his father in 1989. In a referendum in 2003 voters approved constitutional changes he had demanded, strengthening the prince's powers, including the right to dismiss the government. In 2004 he handed day-to-day government to his son, Hereditary Prince Alois, as his representative. A tax scandal in 2008, when data on clients of a Liechtenstein bank was passed to German investigators, led the principality to open up its banking secrecy and move away from its reputation as a tax haven. In 2012 voters rejected a proposal to curb the prince's veto.

In recent years Liechtenstein legalised same-sex marriage, approved by parliament in 2024, and in October 2024 it became the 191st member of the International Monetary Fund. After the election of 9 February 2025 the Patriotic Union and the Progressive Citizens' Party renewed their coalition, and in April 2025 Brigitte Haas became the country's first woman prime minister.