Relations between the Principality of Liechtenstein () and the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

(EU) are shaped heavily by Liechtenstein's participation in the

European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade Asso ...

(EEA).

Comparison

Market access

Liechtenstein is the only

microstate A microstate or ministate is a sovereign state having a very small population or land area, usually both. However, the meanings of "state" and "very small" are not well-defined in international law. Some recent attempts to define microstates ...

(not counting

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by population) that is part of the EEA. Liechtenstein joined the EEA on 1 May 1995 after becoming a full member of the

European Free Trade Association The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four List of sovereign states and dependent territories in Europe, European states: Iceland, Liechtenstein, Norway and Switzerland. ...

(EFTA) in 1991 (previously, it had participated in EFTA through Switzerland's membership). All EFTA states bar

Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland ...

are in the EEA, which gives them access to the EU single market. It also obliges Liechtenstein to apply

European Union law European Union law is a system of Supranational union, supranational Law, laws operating within the 27 member states of the European Union (EU). It has grown over time since the 1952 founding of the European Coal and Steel Community, to promote ...

s considered EEA-relevant. As of June 2016, around 5,000 of 23,000 EU legal acts in total were in force in the EEA. There is some further cooperation with the EU via Switzerland as Liechtenstein is highly integrated with the Swiss economy (including using the

Swiss franc The Swiss franc, or simply the franc, is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia which is surrounded by Swiss territory. The Swiss National Bank (SNB) iss ...

).Principality of Liechtenstein
European External Action Service

Schengen

European Union future possible members 2

On 28 February 2008, Liechtenstein signed the

Schengen Agreement The Schengen Agreement ( , ) is a treaty which led to the creation of Europe's Schengen Area, in which internal border checks have largely been abolished. It was signed on 14 June 1985, near the town of Schengen, Luxembourg, by five of the t ...

and became part of the

Schengen Area The Schengen Area ( , ) encompasses European countries that have officially abolished border controls at their common borders. As an element within the wider area of freedom, security and justice (AFSJ) policy of the European Union (EU), it ...

on 19 December 2011. Before this,

shared an open border with Liechtenstein and was already a full Schengen Area member. This open border was not considered a threat to European security because it would be highly difficult to enter Liechtenstein without first landing in or entering a Schengen state. The border with Austria was not open, and it was treated as an external border post by Austria and Liechtenstein, making it necessary to pass through customs and passport control before crossing. Liechtenstein signed a Schengen association agreement with the European Union on 28 February 2008, and originally planned to join the Schengen Area on 1 November 2009. However, ratification was initially delayed at the behest of Sweden and Germany who felt that Liechtenstein had not done enough to fight tax evasion; the Council of Ministers eventually consented to the ratification of the protocol on 7 March 2011, with the protocol entering into force a month later. Liechtenstein was due to join the Schengen Area by the end of 2011 and did so on 19 December.

Free Movement of Labour

Although a member of the

Liechtenstein does not adhere to the free movement of labour unlike every other member of the European Union and EFTA because its small size and relative prosperity mean that it is vulnerable to high immigration.

Other agreements

There are further bilateral agreements between the two parties on matters such as taxation of savings. There are also ongoing talks on combating fraud and exchanging information on tax matters.

Diplomatic relations between Liechtenstein and EU member states

References

{{DEFAULTSORT:Liechtenstein-European Union relations Third-country relations of the European Union