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Monaco, Liechtenstein envoys promote their tiny countries in Washington
Diplomatic Pouch / February 5, 2015

By Larry Luxner

Europe is home to the world’s two smallest and wealthiest principalities — and both are represented in Washington by women who have risen to the top of their respective careers as seasoned diplomats.

On Jan. 22, Liechtenstein’s Claudia Fritsche and Monaco’s Maguy Maccario Doyle fielded questions from local college students on everything from tax evasion and immigration policy to the radical Islamist threat and climate change.

Journalist Barbara Slavin of the Atlantic Council moderated the chat, which attracted 40 people to Washington’s International Student House. Past events at ISH have featured ambassadors, lobbyists, members of Congress and, last October, Vice President Joe Biden.

“There were no women in Liechtenstein’s foreign service when I started,” said Fritsche, the fourth longest-serving ambassador in D.C. after Djibouti’s Roble Olhaye, Palau’s Hersey Kyota and Congo’s Faida Mitifu.

“I’m not so proud to say that Liechtenstein introduced the right for women to vote only in 1984 — not 1884 — so we had a lot to catch up on. I was personal assistant to the foreign minister, which is when my interest in foreign cultures was awakened. The choice was clear, and I’ve never regretted it.”

Today, she said, 40 percent of Liechtenstein’s diplomats are women.

“I try to invite every newly arrived female ambassador for lunch,” said Fritsche. “Having been here so long, I know she probably has a very experienced staff, but there are little things you need to know that the staff can’t tell you. So I always keep my door open.”

Both Fritsche and Maccario were their country’s top diplomats in New York for years before coming to Washington. Fritsche was Liechtenstein’s permanent representative to the United Nations from 1990 to 2002, the year she arrived here as ambassador. Likewise, Maccario began her career in 1976 at the Monaco Government Tourist Office in New York and was promoted to consul-general in 1997 — making her the first Monégasque woman ever to hold that position worldwide.

“There are only 8,000 of us. It’s very difficult to get Monégasque citizenship. Normally you need three generations,” she said. “On the other hand, there is no income tax, and in one square mile, we have 120 nationalities, and everyone gets along very well together.”

Monaco currently ranks as the world’s richest country measured by per-capita income ($163,026 according to the World Bank). The second-richest is Liechtenstein ($134,617). With about 37,000 inhabitants each, their combined population is less than that of Silver Spring, Md.

Yet landlocked Liechtenstein, at 61 square miles the same size as the District of Columbia, is a giant compared to its tiny French-speaking cousin on the Mediterranean.

“Monaco is half the size of Central Park, and for that reason we have no agriculture and no manufacturing,” said Maccario. “We’re more a service-oriented, knowledge-based economy focused on banking, wealth asset management, construction and tourism.”

Both ministates are steeped in history.

“Liechtenstein came into existence about 300 years ago, and is ruled by one of the oldest royal families in Europe,” said Fritsche. “Until World War II, we were a fairly poor nation consisting of farmers and a small textile industry. But under Prince Franz Josef II [who reigned for 51 years and 111 days, from 1938 until 1989], we industrialized, and today we are a highly developed economic center. We still have a very pristine, rural landscape. We’d like to keep it that way and avoid high-rise buildings.”

Under Franz Josef II’s successor, Hans-Adam II, the tiny country has become a manufacturing powerhouse, to the point where manufacturing now generates 40 percent of its GDP, compared to 27 percent for services. Liechtenstein’s economy generates 66,000 jobs worldwide, and the principality has one active business for every nine inhabitants.

“Over the past 12 or 13 years, our issues with the U.S. government have been related predominantly to financial services,” said Fritsche. “We started cooperating in combatting money laundering, and later tax fraud and tax evasion. Many financial centers around the world, including Liechtenstein, have been challenged in the last decade to turn from what could have been considered opaque to completely transparent.”

Monaco, the world’s second-smallest country after the Vatican, is the smallest member of the United Nations, which it joined in 1993. At one time, Monaco was 20 times its current size, but in 1861, Prince Charles III conceded to France his rights over Menton and Roquebrune, guaranteeing Monaco’s total independence.

“After having to give up most of its territory to France, the prince negotiated the possibility of bringing a railroad to Monaco, and started gaming, which was prohibited in France and Italy,” said Maccario. “At the time, Monaco was barren; we had only olive and lemon trees. His name was Charles and “monte” in Italian means hill, which is where the name Monte Carlo came from.”

Both tourists and residents are attracted by Monaco’s well-deserved reputation for safety and security. The principality boasts one policeman for every 100 residents and a system of 24-hour video surveillance that covers Monaco’s entire surface area. Begging and violent crime are virtually non-existent in this microstate.

“Monaco is very accessible and very safe,” Maccario said. “You can walk anywhere and you don’t have to worry. And if you’re a senior, you have the best health care.”

Another big draw is the fact that, since 1869, residents of Monaco have been exempted from all personal, property or income tax — a loophole that’s attracted thousands of well-heeled foreigners to the principality. Even so, it’s very difficult to get citizenship; that happens only at the discretion of Prince Albert II, who assumed the throne in April 2005 upon the death of his father, Prince Rainier III.

Asked how their small countries deal with immigration, Fritsche said Liechtenstein’s Muslim minority has doubled from 2.5 to 5 percent of the total population in the last decade alone.

“Immigration is a big domestic issue. Opening our border could have consequences we don’t want,” she said. “On the other hand, we need experts. Our companies tell us that if they don’t get more work permits, eventually our economy will stagnate. So the choice is very hard.”

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