8

Economically, Liechtenstein has one of the highest gross domestic products per person in the world when adjusted for purchasing power parity.[17] The country has a strong financial sector centred in Vaduz. It was once known as a billionaire tax haven, but is no longer on any official blacklists of uncooperative tax haven countries. An Alpine country, Liechtenstein is mountainous, making it a winter sport destination.

Liechtenstein is a member of the United Nations, the European Free Trade Association, and the Council of Europe. It is not a member of the European Union, but it participates in both the Schengen Area and the European Economic Area. It has a customs union and a monetary union with Switzerland.

https://en.wikipedia.org/wiki/Liechtenstein

https://en.wikipedia.org/wiki/European_Free_Trade_Association

It is a member of the European Free Trade Association, but for some reason it decided to not join the EU when it's neighbors are all pretty much EU members, I am thinking it's because it doesn't manufacture much good at all and it's just a place where rich people live, but I was wondering if someone had a more in-depth explanation mentioning what people think about joining the EU or what the government itself said about joining the EU.

Sayaman
  • 40,192
  • 9
  • 139
  • 290
  • There are also Monaco, Andorra, San Marino and the Vatican who are not part of the EU but have adopted the Euro. – xyldke Jan 12 '24 at 08:00
  • 2
    "when it's neighbors are all pretty much EU members", the neighbour they are closest with, Switzerland, is not. If you have a country that's as tightly coupled to Switzerland as Liechtenstein is and they join the EU, all kinds of procedural problems would follow. – xLeitix Jan 12 '24 at 14:11
  • I just noticed there is a WP article on Microstates and the European Union which gives a fairly current overview. – ccprog Jan 12 '24 at 14:16
  • There is a related question here: https://politics.stackexchange.com/questions/49159/why-are-some-microstates-not-members-of-the-european-union-eu/49174#49174 – Neil Tarrant Jan 14 '24 at 00:17

2 Answers2

21

You quoted the answer yourself:

It has a customs union and a monetary union with Switzerland.

Like the other European dwarf states, Liechtenstein is dependent on a large neighboring state for its economic viability. Before 1919 that was the Austro-Hungarian monarchy, after it was Switzerland. So, the customs and monetary union with Switzerland trumps EU membership any day.

To look from another perspective, accession to the EU comes with a huge number of obligations, administrative, regulatory and economic, that a country as small as Liechtenstein could never implement on its own. Most of these functions are currently handled by Switzerland, which would no longer be possible if Liechtenstein became a EU member, but Switzerland didn't.

ccprog
  • 8,154
  • 1
  • 17
  • 52
  • 3
    Why would the customs and monetary union with Switzerland impede Lichtensteins EU membership? After all, adopting the Euro is not a requirement to join the EU (Denmark, for instance, is a member of the EU that has no plans to adopt the Euro), and both Switzerland and Lichtenstein are already members of the Schengen Agreement, so its unclear what would change from a customs perspective? – meriton Jan 11 '24 at 20:22
  • 3
    Denmark was an exception, The EU has since made clear it would not accept accession requests without a commitment to introduce the Euro in the future. The customs union is not only a free trade agreement like the EWR, but Liechtenstein is a material part of the Swiss custom area, and Swiss customs officers have authority in Liechtenstein (see Schweizer Zollgebiet. – ccprog Jan 11 '24 at 20:33
  • Could I trouble you to give a reference that "the EU would not accept accession requests without a commitment to introduce the Euro"? It's the first time I am hearing that, and I am unable to find an official statement of the EU on the matter? For instance, the Wikipedia article Enlargement of the European Union doesn't mention such a requirement? – meriton Jan 11 '24 at 20:56
  • 2
    Economic and Monetary Union of the European Union, last paragraph of the intro section. – ccprog Jan 11 '24 at 21:08
  • 6
    One could also say that if Switzerland joined the European Union, then Liechtenstein would follow suit and it wouldn't really have any choice in the matter. – quarague Jan 12 '24 at 07:33
  • 1
    @quarague though, it would probably "join" the same way San Marino and Andorra "joined" - just by virtue of being attached to their larger neighbors' economic zone, not as an official member (as ccprog's answer states that they could not handle the duties of proper membership. The EU needs to be reformed at least a bit to make this feasible) – Chieron Jan 12 '24 at 08:38
  • 1
    @meriton https://economy-finance.ec.europa.eu/euro/enlargement-euro-area/who-can-join-and-when_en "All EU Member States, except Denmark, are required to adopt the euro and join the euro area" – AmiralPatate Jan 12 '24 at 11:17
  • @meriton: one can observe the hassle of EU (non)-membership vs. a customs-union with the example Republic of Ireland - Northern Ireland - mainland UK. An EU member Liechtenstein with a customs-union with Switzerland would face similar problems. – Dohn Joe Jan 12 '24 at 12:56
  • @meriton It is not just customs that changes. The customs part is fairly minor, but full membership of the EU involves so much more. Lichtenstein would probably have to make several big changes to its constitution to be inline with the EU. Major reorganizations to state institutions and their way of working. Having to implement 1000's of EU rules and regulations on just about any area of government. E.g. Revise (or at least verify) their tax system, pension systems, social security, food-safety and worker-safety regulations, and so on. Really problematic for a small nation. – Tonny Jan 12 '24 at 13:14
  • 1
    @meriton Schengen is about the movement of people, not goods. There are customs controls between Switzerland and the EU, while people are just waved through. If Liechtenstein was in the EU, there would have to be customs controls between it and Switzerland. – Mike Scott Jan 12 '24 at 20:27
13

From an Interview with the German newspaper Welt am Sonntag:

Der Regierungschef von Liechtenstein, Adrian Hasler, hält sein Land für zu klein, um Mitglied der Europäischen Union zu werden. „Ein EU-Beitritt wäre für uns eine Schuhnummer zu groß“, sagte Hasler WELT AM SONNTAG. „Wir wären zum Beispiel gar nicht in der Lage, den EU-Vorsitz zu übernehmen, dazu fehlen uns die Ressourcen in der Verwaltung.“ Es stelle sich auch die Frage, „wie viel zusätzlichen Einfluss wir als Kleinstaat in der EU hätten“.

English Translation by me:

The Prime Minister of Liechtenstein, Adrian Hasler, believes his country to be too small to become a member of the European Union. "Joining the EU would too big for us," Hasler told WELT AM SONNTAG. "For example, we would not be able to take over the EU presidency, as our administration lacks the resources to do so." There is also the question of "how much additional influence we would have as a small state in the EU".

It's worth noting that Liechtenstein, while not a member of the EU proper, is a member of various EU organizations. In particular, it is a member of the European Economic Area (and thereby part of the European Union's single market, automatically adopting all EU laws pertaining thereto), the Schengen Agreement (abolishment of border controls).

I am thinking it's because it doesn't manufacture much good at all and it's just a place where rich people live

Liechtenstein's annual exports are worth 3 billion, about 40% of the country's GDP. And 90% of those exports go to the European Union (trade with Switzerland is not included in these figures, because the flow of goods across the Swiss border is not tracked due to the customs union with Switzerland). Therefore, unrestricted trade with the European Union is very important to Liechtenstein, which is why they have been part of the European Economic Area, and thereby the EU single market, since its inception.

That is, Liechtenstein is part of the EU in most ways that matter, but does not aspire to full membership because the structures and processes of the EU don't fit a country of such a tiny size.

meriton
  • 4,155
  • 12
  • 21