Thursday, April 23, 2009

Where the Prince is No Pauper

Why we visited Liechtenstein two weeks ago is somewhat mysterious. Perhaps we considered the tiny nation, one of the smallest independent States in the world, akin to the mountain that must be climbed “just because it’s there.”

Sandy, Lee, Karen, and I had no problem finding the place, although it does its best to hide by snuggling up between Switzerland and the western border of Austria. Even a country that is only about 15 miles long and seven miles wide cannot avoid detection by modern global positioning equipment. When we drove in, the day was sunny and mild and we knew the Prince was keeping an eye on things because the Liechtenstein flag was flying at the mountain-top castle above Vaduz, the capital city. That meant he was at home.

I didn’t take long to find out what makes the wheels go round in Liechtenstein—money, and lots of it.

Histories and even tourist brochures state that members of the House of Liechtenstein are “good at business” or “entrepreneurial.” Family leaders owned lots of land elsewhere when Germany was a series of small, frequently warring, States until the mid-1800s. Unfortunately for the ambitious Liechtensteiners, their lands did not qualify for designation as an imperial State. So they bought what is now Liechtenstein in two purchases in 1699 and 1712. Although they didn’t bother to live there, the area was designated as a principality in 1719 and allowed to join the German Confederation of States. It was the only small German State to maintain independence through numerous reorganizations and two world wars.

In 1938, the Prince moved to the country named for his family, occupying the medieval castle above Vaduz. You can go there to look, but you can’t enter or touch. It is a private castle.

With Hitler making serious noises about bringing all Germanic lands into the Third Reich (German is the official language in Liechtenstein), the Prince may have been feeling a bit of heat. He flew to Berlin in 1939 for a private meeting with Hitler. No one knows what deal was struck, but the Wehrmacht never marched into the principality. Opposition would have been light, anyway. The business-like princely family dissolved the Liechtenstein army in the 1860s, because it was too expensive to maintain.

The Prince established the first Liechtenstein bank in 1861. Today, a dozen or more modern financial buildings constitute the Vaduz skyline. Mirroring their Swiss brethren to the west, they long have featured accounts unavailable to the prying eyes of tax collectors. That probably soon will change. The Prince recently advised parliament that bank reform, including adoption of a Tax Information Exchange Agreement with the United States, was top priority if Liechtenstein was to continue as the ‘best-organized and best-regulated State in the world.”

In contrast to a lot of glitz and glamour at Rolex, Armani, Gucci and other shops and a flock of overpriced cafes in the car-free zone below the Castle of Vaduz bordered by the banks, much of Liechtenstein is alpine country where skiing is popular in winter and small pastures start where city streets end. The Porsches, Ferraris, and Mercedes traversing the only main route through Vaduz often are slowed by a farm tractor hauling a trailer full of manure.

The Prince lives well above any unpleasant odors and can look down from his castle with considerable financial satisfaction. Beyond other family properties, he can easily see the princely vineyard and winery and parts of the princely forest. If those and other views become boring, he can stroll through the hallways of his home to inspect one of the finest private art collections in Europe.

It’s good to be the Prince.

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