Liechtenstein in Turmoil Over Vote to Revoke Ruler’s Veto

Liechtenstein Spring May Wither
The town center of Vaduz, Liechtenstein. Liechtenstein’s wealth management assets have dropped almost a fifth since Germany used data stolen from LGT in 2008 to prosecute tax evaders. Photographer: Adrian Moser/Bloomberg

Liechtenstein will decide over the next three days whether to strip its monarch of veto powers after he threatened to block moves to legalize abortion.

Prince Alois von und zu Liechtenstein has said he may quit his royal duties should a majority of the Manhattan-sized Alpine country wedged between Switzerland and Austria vote today and on July 1 to revoke his power to overturn referendums.

Sidelining 44-year-old Alois, whose family owns Liechtenstein’s biggest bank, would jeopardize the prosperity that gives the country’s 36,000 residents the world’s second-highest per capita income after Monaco, according to royalist lobby group Prince and People. When his father Hans-Adam II warned that he might leave Liechtenstein nine years ago, the electorate granted him more powers in what the Council of Europe said was “a serious backward step” for democracy.

“We are the last monarchy where the sovereign definitely has the last word, and this is not good because it’s undemocratic,” said Mario Frick, former head of government and chairman of the Liechtenstein private bank Frick & Co. AG. “It is a contradiction in terms that Liechtenstein calls itself a direct democracy when the people do not have the last word.”

Alois upset some residents when he threatened last August to use his veto should the electorate vote to legalize abortion in the mostly Catholic country, which is the only nation named after the family that bought it.

Unacceptable Solution

“Every human life, especially that of an unborn child, needs to be protected,” Alois said in a speech that month. “Abortion is not an acceptable solution for the problem of an unwanted pregnancy.”

In a referendum in September, 52.3 percent voted against granting impunity from punishment in the case of a first trimester abortion. Women in Liechtenstein who have an abortion can be imprisoned for as long as one year, according to the country’s criminal code.

The principality’s abortion laws are the most restrictive in Europe after Ireland and Poland, said Hilfe Statt Strafe, the group that garnered the 1,500 signatures necessary to trigger a referendum in a country better known for limited edition stamps and vineyards producing Riesling and Pinot Gris. Only Monaco, Andorra, San Marino, Malta and Ireland among European countries have stricter abortion laws, according to 2011 statistics published by the World Health Organization.

In 1984, Liechtenstein became the last nation in Europe to give women the right to vote, according to Kareen Jabre, manager of the gender partnership program at the Inter-Parliamentary Union, a Geneva-based organization that promotes democracy.

Democratic Farce

The prince’s intervention in the abortion debate prompted banker Jochen Hadermann, computer specialist Edith Hilbe, teacher Silvio Hoch and state historian Paul Vogt to marshal support for a referendum on his veto.

“The veto turns democratic decision making into a farce,” said Sigvard Wohlwend, a spokesman for the group. “Liechtenstein is only a democracy as long as the people want the same thing as the prince.”

Silvia Hassler-De Vos, a spokeswoman for Alois, said the vote this week could be vetoed by the prince. The royal family has only used the powers once, in 1961, over a proposal to transfer hunting rights in Europe’s fourth-smallest country.

Alois declined to be interviewed by Bloomberg News because he doesn’t comment to foreign media on internal political issues, Hassler-De Vos said. She declined to say whether the royal family will join its art collection in Vienna should voters abolish the veto.

Happy Childhood

“The royal family does not want to serve as a fig leaf that covers a politic it doesn’t share anymore,” the prince told parliament on March 1.

In 2003, Hans-Adam’s three other children, including Prince Maximilian, who heads the family’s bank LGT Group, wrote to the principality’s people, asking them to grant their father additional powers and prevent him from moving to neighboring Austria.

“We have had a happy childhood in Liechtenstein. Our friends and family tie us closely to the country and the people,” they wrote of the country acquired more than 300 years ago by their forefather Johan Adam Andreas of Vienna’s von Liechtenstein family. “We are convinced that the royal family can also in future make a positive contribution to Liechtenstein.”

While Monaco, Luxembourg and Andorra have curbed the powers of their royal families, more than 64 percent of voters in 2003 backed Hans-Adam, whose wealth is estimated at as much as 7 billion Swiss francs ($7.3 billion), according to the December issue of Swiss magazine Bilanz.

Dramatic Consequences

Christof Buri, a spokesman for LGT, declined to comment on whether the bank would remain in Liechtenstein should the family depart. Relocation is unlikely because it would cost too much, said two people with knowledge of the matter, who declined to be identified because they aren’t authorized to comment.

The departure of the royal family from the castle that looks down on the cobbled streets of the capital Vaduz would damage a financial center that has more than 500 funds and whose 17 banks manage assets of about 166 billion francs.

“It would have dramatic consequences for the future of our country,” said Alexander Batliner, head of the center-right Progressive Citizens’ Party, which forms a coalition government with the larger Patriotic Union. “With this dualism of the prince and the people, our sovereignty is better protected than if we were a republic.”

Spring Unlikely

Liechtenstein’s wealth management assets have dropped almost a fifth since Germany used data stolen from LGT in 2008 to prosecute tax evaders. The nation, which was accidentally invaded by the Swiss army on night maneuvers five years ago, agreed in March 2009 to meet international standards to avoid being blacklisted as a tax haven by the Organization for Economic Cooperation and Development.

A “Liechtenstein Spring” is unlikely, Prime Minister Klaus Tschuetscher said in February.

One of his predecessors, Frick, still hopes that this time it will be different.

“It’s tragic that a large part of the country’s elite, including famous managers of important companies, fear the prince’s exodus and with him the country’s success,” he said. “For Liechtenstein’s reputation, it would be good if the people get the last say, because under the current situation the country looks a bit backward.”

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