Hereditary Prince Alois of Liechtenstein paid his first working visit to Switzerland as Representative of the Head of State. In Berne, the Hereditary Prince met with Swiss Federal President Samuel Schmid to discuss bilateral and multilateral questions. Hereditary Prince Alois and Federal President Schmid reiterated their commitment to the friendly relations between the two countries and expressed their intent to continue their excellent cooperation.

A dense web of treaty relations links Liechtenstein and Switzerland. Hereditary Prince Alois and Federal President Schmid cite the most recent agreement on mutual assistance in the event of disasters and serious accidents as a good example of the ongoing intensification of mutual cooperation between the two neighboring States. The two countries also endeavor to cooperate in the area of European policy, where Liechtenstein’s membership in the European Economic Area and Switzerland’s bilateral treaties have given rise to differing treaty relationships. Now that the Swiss people have approved accession to the Schengen Agreement, Liechtenstein will negotiate its association to Schengen/Dublin with the EU.

Liechtenstein and Switzerland have enjoyed excellent cooperation for many decades. By concluding a customs treaty in 1852, the Principality of Liechtenstein had closely affiliated itself with the Austrian Empire. After the collapse of Austria-Hungary as a consequence of the First World War, Liechtenstein cancelled this treaty and approached Switzerland to conclude several economic agreements. Already in 1919, the Swiss Confederation began representing the interests of Liechtenstein citizens abroad through its embassies and consulates. Liechtenstein established an embassy in Berne, which was temporarily closed after a few years, but has now for decades again constituted the diplomatic link between the two countries. A few years ago, Switzerland also established a separate embassy for Liechtenstein, which is run by a member of the Swiss Department of Foreign Affairs.

Liechtenstein’s efforts to conclude an economic treaty with Switzerland were successful in 1923, when the “Treaty between Switzerland and Liechtenstein on the Association of the Principality of Liechtenstein with the Swiss Customs Area” was signed on 29 March 1923. The Customs Treaty laid an essential milestone for Liechtenstein’s economic development, which especially after the Second World War led to an industrial boom and expansion of the financial services sector. Originally, all customs and trade agreements the Swiss Confederation concluded with other States automatically applied to Liechtenstein. In 1995, the Customs Treaty was adjusted to accommodate Liechtenstein’s changed needs, so that Liechtenstein has since been able to join relevant international organizations and agreements even when Switzerland is not a member. This treaty amendment paved the way to Liechtenstein’s EEA membership, even though the Swiss people had already rejected Swiss accession to the European Economic Area in a referendum.

Because of the Customs Treaty with Switzerland, Liechtenstein introduced the Swiss franc as legal tender. On 26 May 1924, Liechtenstein established the principle by law that: “The Swiss franc as the Liechtenstein franc shall be the exclusive legal currency.” After intensive consultations between the Liechtenstein Government and the Swiss Federal Council, a pragmatic solution had been found to use the Swiss currency in Liechtenstein without an international treaty. Only in 1980 did Liechtenstein and Switzerland conclude a currency treaty. The impetus was the turbulences in the international currency sector: In the course of its measures to protect its currency, Switzerland repeatedly had to declare Liechtenstein to be a “foreign currency area” until Liechtenstein, after a delay, autonomously implemented the measures in order to regain its status as a “domestic currency area”. In addition to the currency turbulences, Liechtenstein company law was also a reason for Switzerland to conclude a currency treaty. As a precondition for the treaty, Liechtenstein reformed its company law to reduce the regulatory differential between Switzerland and Liechtenstein.

The differing views in connection with the Currency Treaty and company law reform did not cloud the friendly relations between Liechtenstein and Switzerland. During the official working visit in Berne, Federal President Samuel Schmid emphasized the good understanding between Vaduz and Berne, which allows plenty of room for differing opinions and approaches. With his first working visit to Switzerland, Hereditary Prince Alois underscored Liechtenstein’s special relations with its Customs Treaty partner. By visiting Switzerland, the Hereditary Prince followed in the footsteps of his father, Reigning Prince Hans-Adam II, and his grandfather, Reigning Prince Franz Josef II, both of whom also paid their first official visits to Switzerland.