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Art Gallery Site Poses Problem for Tiny Nation

October 11, 1987|WILLIAM TUOHY | Times Staff Writer

VADUZ, Liechtenstein — Standing by a window in his castle, Prince Hans Adam von und zu Liechtenstein is master of nearly all he surveys.

The prince is the ruler of Liechtenstein, a tiny country wedged between Switzerland and Austria on the upper Rhine River that has kept out of Europe's wars and managed to transform itself into a modern financial mini-capital.

"We have no real political or economic problems," the prince, dressed in a dark business suit, said as he wandered around his study. "We have managed to avoid most of the recessions of the 1970s and 1980s. We haven't any unemployment, and the political situation is stable."

In fact, so few are the problems facing the principality, which has only 27,000 citizens and covers an area of only 61 square miles, that the prince's primary concern these days is where to build a new art gallery to house the family treasures.

1,400 Art Objects

The collection is spectacular: 1,400 paintings, sculptures and other objects built around the largest accumulation of Rubens masterpieces in private hands.

"Some of our citizens," the prince said, "would not like to see another large building in the center of Vaduz. . . . So we are considering tunneling into the cliff behind the present museum. Our problem now is that we can show only about 60 or 70 paintings of all those in the collection."

Guenter Meier, an editor of one of the principality's two papers, said: "It's not a matter of raising the money for the building. It's where to put it. Maybe putting it under the mountain is the best solution."

The country's only other pressing problem, as Prince Hans Adam sees it, is whether Liechtenstein should join the United Nations.

Referendum Possible

"We are currently a member of the Council of Europe," he said, "and we are thinking of applying for membership in the United Nations. But some of our people are not too enthusiastic about joining. They see it as a waste of money and suggest that if Switzerland is not a member, why should we be?"

The prince thinks there should be a referendum on the issue. This would force the government to make a solid case for joining the world body.

"We would have to campaign hard," he said, "to show the people that it is worth it."

The prince has some experience at conducting long-term campaigns. By tradition, the women of Liechtenstein had been denied the right to vote, and this state of affairs was reinforced by male voters in a referendum in 1971. But Hans Adam and his father, Prince Franz Josef II, organized a campaign to get the vote for women and, as the prince put it, "we turned that around in 1984."

Actually, the prince is not quite master of all he can see from his 130-room castle. His father is still alive and is the longest serving head of state in Europe. But Franz Josef has, without abdicating, turned over to his son the reins of government.

Prince Hans Adam is a great-grandson of Emperor Franz Josef of Austria. His managerial skills are credited with helping establish Liechtenstein as a financial and banking center and with attracting new light industry to make his country more than a fairy-tale principality.

The royal family owns one of the country's three banks--the Bank in Liechtenstein, which handles virtually every kind of financial transaction. The other two banks are the National Bank of Liechtenstein, which was founded by law in 1861, and the Private Trust Bank Corp. The assets of the three banks total more than $6 billion.

Business Booming

Karlheinz Heeb, director of the National Bank, told an interviewer: "Owing to the relatively high rate of saving in Liechtenstein and the remarkable inflow of money from abroad, the Liechtenstein banks are able to offer the lowest rates of mortgage interest in the world. And we have no withholding tax here. That is important."

Heeb said that because of sharp growth in business, Liechtenstein banks must continually increase their staffs. At the moment, they employ nearly 700 people, in contrast to half that number in 1974. The banks' payroll represents 5% of all those employed in the principality.

The three banks, Heeb said, have been members of the Swiss Bankers Assn. for many years. He said they adhere to the high Swiss standards of banking probity and are subject to laws, like the Swiss, that deal with secrecy and the protection of capital.

"We believe in banking growth," Heeb said, "but not at any price."

"As a very small country not near the major financial markets, we have to go outside to them and bring back global investment," the prince said. "That's why we are represented abroad in the major financial markets."

Thus the Liechtenstein banks have outlets in Zurich, London, Frankfurt, Hong Kong, New York and Los Angeles.

On the industrial front, Liechtenstein has developed prosperous companies dealing in machine tools, chemicals, ceramics, textiles and foodstuffs.

Tourism brings in significant revenues, as does the thriving business of issuing postage stamps.

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