Another member for EEA zone

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The Independent Online
The tiny tax haven of Liechtenstein, home to twice as many "mail- box" companies as its 30,000-strong population, voted yesterday to join the huge European free trade zone, writes John Willcock.

By voting to become the 18th member of the European Economic Area - EEA - Liechtenstein is breaking with its larger neighbour and historical partner, Switzerland, which rejected EEA entry three years ago.

The EEA already connects the 15-nation European Union with Iceland and Norway.

Liechtenstein is not surrendering its centuries' old tradition as a home for anonymous bank accounts and tax-dodging companies.

Two years ago it clashed with British liquidators over the fate of assets held by the late Robert Maxwell's ultimate holding companies, a series of secret trusts or "stiftungs".

The government's campaign to win over public opinion to the EEA included the assurance that membership would not mean surrendering power to Brussels bureaucrats.

In particular, membership would not challenge key laws on bank secrecy and confidential company structure, the government said.

The only other big employer in the principality apart from financial services is the post office, celebrated for producing highly decorative stamps.

The alpine principality voted 6,411 to 5,061 in favour. The outcome confirms an earlier vote in 1992 when neighboring Switzerland voted against EEA membership.

The Swiss decision meant Liechtenstein's treaty had to be renegotiated since the two countries share an open border policy.

Sunday's results remained uncertain until polling stations closed although opinion polls earlier had shown 50 per cent of the voting public in favor.

Opponents feared that by entering the EEA, Liechtenstein could gradually drift away from its close relationship with Switzerland. Liechtenstein uses the Swiss franc as its currency.

With more than a third of its population foreign, immigration was also an important issue.

As a special concession to this, EEA members allowed the principality to continue regulating immigration despite usual trade zone rules guaranteeing free movement of people among member states.

Liechtenstein ruler Prince Hans-Adam II expressed satisfaction with the 55.9 per cent vote in favor which had barely altered from three years before.

"I am happy that we can now see clearly where integration in Europe is leading us," he said. But the principality would not now be pushing for membership of the EU.

"That would be a shoe size too big for us," he said.

Turn-out for the vote was 82 per cent, slightly down on 1992. "Europe now takes much more notice of us," ruling Prince Hans Adam II said.

"The EEA is the perfect solution for a country our size.

"The EU is one shoe-size too big, even if you just consider the personnel we would need," he told Reuters.