Liechtenstein

Liechtenstein A tiny duchy between Austria and Switzerland founded in 1719, it achieved independence on 6 August 1806. In the nineteenth century, its economy was integrated into that of Austria-Hungary. When that state collapsed in 1918, it began a process of reorientation towards Switzerland. A new Constitution was passed in 1921, and it entered a customs, economic, and currency union with Switzerland in 1923. Ruled by Duke Francis Joseph II (r.1938–89), after World War II it developed into one of the world's most prosperous countries, becoming a low-tax zone for international corporations and banks; in the early 1990s, with around 30,000 inhabitants, it was home to around 40,000 holdings and corporations. Under the progressive Duke Hans-Adam II (r. 1989– ), the population voted, in marked contrast to Switzerland, for an end to the country's economic isolation and entry into the European Economic Area, which came into effect on 1 May 1995. From 1995, Hans-Adam became involved in a bitter controversy with parliament and the judiciary. At issue was a proposed constitutional reform, and the future political role of the Duke. In 2001, a compromise was finally being worked out. From an international point of view, the country's lax banking laws were much more serious, as evidence mounted from 2000 that it had become a safe haven for money laundering and tax evasion.