Liechtenstein | Freedom House

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In February 2009 parliamentary elections, the Patriotic Union’s Klaus Tschuescher was elected prime minister and subsequently formed a coalition government with the Progressive Citizens’ Party. As the economic crisis continued to worsen, Liechtenstein agreed to ease bank secrecy laws, allowing for the country’s removal from the Organization for Economic Cooperation and Development’s list of uncooperative tax havens.

Liechtenstein was established as a principality in 1719 and gained its sovereignty in 1806. From 1938 to 1997, it was governed by a coalition of the Progressive Citizens’ Party (FBP) and the FatherlandUnion, now the Patriotic Union (VU). The latter party then ruled alone until the FBP won the 2001 elections.
In a 2003 referendum, voters approved a constitutional amendment that granted significantly more power to the monarch, Prince Hans-Adam II. The amendment gave the prince the authority to dismiss the government, veto legislation, and appoint judges, but removed his right to rule by emergency decree. In 2004, Hans-Adam handed his constitutional powers to his son, Hereditary Prince Alois, though the elder prince retained his title as head of state.
In two-stage elections in 2005, the VU and the FBP won 10 and 12 of Parliament’s 25 seats, respectively. However, a small third party, the Free List, captured three seats, forcing the two larger parties to form a grand coalition. FBP leader Otmar Hasler—the prime minister since 2001—retained his post.
In the February 2009 parliamentary elections, the VU won 13 seats, while the FBP took 11; the Free List captured just one seat. Prime Minister Hasler was replaced in March by Vice Prime Minister Klaus Tschuetscher of the VU, who subsequently formed a coalition government with the FBP.

Liechtenstein declared in 2006 that it would make no further changes to its banking-secrecy laws. However, its European neighbors renewed their tax-related complaints in 2008 as the economic crisis prompted new concerns about tax havens. In December 2008, Liechtenstein and the United States came to an information-sharing agreement on tax evasion investigations. Liechtenstein agreed in March 2009 to adopt Organization for Economic Cooperation and Development (OECD) transparency and information-sharing standards, including a commitment to exchange data on clients in both tax fraud and tax evasion investigations by foreign governments.

Political Rights and Civil Liberties: 

Liechtenstein is an electoral democracy. However, the unelected monarchy won greater authority in 2003, making it the most politically powerful in Europe. The unicameral Parliament (Landtag) consists of 25 deputies chosen by proportional representation every four years. These freely elected representatives determine the policies of the government, but the monarch has the power to veto legislation, dismiss the government, and appoint judges. Voting is compulsory.
Political parties are able to freely organize. Two parties—the VU and the FBP—have dominated politics over the last half-century.
Liechtenstein’s politics and society are largely free of corruption, and the country continues to work to build sufficient mechanisms to fight money laundering in its banking system. Due to recent commitments, the OECD removed Liechtenstein from its list of uncooperative tax havens in May 2009. Liechtenstein was not ranked by Transparency International in its 2009 Corruption Perceptions Index.
The constitution guarantees freedom of expression and of the press. There is one private television station, and the only radio station is privately held. The two daily newspapers are aligned roughly with the two major political parties. Broadcasts from Austria and Switzerland are available and popular in the country, as are foreign newspapers and magazines. Internet access is not restricted.
The constitution establishes Roman Catholicism as the state religion but protects freedom of belief. Catholic or Protestant religious education is mandatory, but exemptions are routinely granted. All religious groups are tax exempt. The government respects academic freedom.
Freedoms of assembly and association are protected, and the principality has one small trade union. A 2008 law provides civil servants with the right to strike.
Judges are appointed by the prince. Despite controversy over the monarch’s expanded powers, Liechtenstein has remained a law-based state with an independent judiciary. Due process is respected, and prison conditions meet international standards. Crime is rare in the country. Switzerland is responsible for its customs and defense.
A third of the population is foreign born. Some native citizens have expressed concern over the growing number of immigrants from non-German-speaking countries. The government has responded by seeking to teach newcomers the language and culture of Liechtenstein in formal integration programs. The country received 227 asylum applications in 2009, a significant increase over the 26 submitted in 2008.
Liechtenstein has been a member since 1995 of the European Economic Area, a free-trade area that links non–EU members Norway, Iceland, and Liechtenstein with the EU.
Under a 2005 reform, abortion is legal in the first 12 weeks of pregnancy. A 2003 court decision upheld the principle of equal pay for equal work for women, but Liechtenstein’s society remains conservative. While women celebrated the 25thanniversary of full voting rights in 2009, they are underrepresented in upper levels of business and government, with only 6 women serving in the 25-seat Parliament. Women enjoy equal rights in family law.