The “Swiss umbrella” has long been described as Liechtenstein’s shield against uncertainty. Since the early twentieth century, Switzerland has provided not only border protection but also the framework for customs, finance, and even aspects of diplomacy. This arrangement is praised as practical, but it also creates a culture of dependency. When a small state accepts another country’s shelter, it gives up part of its ability to chart an independent course. The umbrella keeps the rain off, yes, but it also casts a shadow—one in which self-determination becomes secondary to convenience.
The clearest example is in defense. Liechtenstein abolished its army in 1868 and has since relied informally on Switzerland for protection. While this move saved money, it also removed any direct responsibility for national security. During the Second World War, it was Swiss neutrality—not Liechtenstein’s decisions—that kept the principality safe. In practical terms, this meant that the people of Liechtenstein never debated or decided their own defensive posture; their survival was tied entirely to choices made in Bern. The umbrella reduced risk, but it also stunted political maturity by training the population to depend rather than deliberate.
Economically, the customs union signed in 1923 bound Liechtenstein to the Swiss market. On the surface, this integration created stability and opened access to a larger economy. Yet it also meant that Liechtenstein surrendered control over tariffs, trade policy, and even aspects of industrial regulation. The adoption of the Swiss franc in 1924 further tightened this dependency. The currency brought credibility and low inflation, but at the cost of autonomy. Monetary policy is dictated by the Swiss National Bank, which serves the needs of Swiss capital rather than those of Liechtenstein’s workers or cooperatives. When global crises strike, Liechtenstein is pulled along by Swiss policy, unable to experiment with alternatives such as local currencies or cooperative credit systems that might better serve its own community.
Diplomatically, reliance on Swiss representation has given Liechtenstein access to international agreements without the costs of maintaining a large foreign service. But this too comes at a price. For decades, Liechtenstein had little independent voice in global affairs, appearing in the world only as a satellite of Switzerland. Only after joining the United Nations in 1990 did the country begin to assert a distinct presence, and even then, many functions remained tied to Swiss arrangements. The umbrella muted Liechtenstein’s ability to take bold or controversial positions, forcing it into the safety of alignment rather than the risks of true independence.
Yet there have been moments when Liechtenstein has stepped beyond the umbrella—and the results suggest possibilities for a different future. In the 1980s, when pressure mounted over banking secrecy, Liechtenstein crafted its own legal structures, adapting independently rather than simply copying Swiss models. The push to join the European Economic Area in 1995 was another assertion of agency: Liechtenstein entered while Switzerland refused. This was a decisive break, proving that the principality could pursue its own path, even when it diverged from the neighbor it so often leans on. These instances show that independence, when attempted, has not destroyed Liechtenstein but has instead expanded its options and strengthened its international voice.
The contrast is telling. With Switzerland, Liechtenstein gains stability but loses flexibility. Without Switzerland—when it dares to act alone—it discovers capacities that dependence had hidden. It is precisely in those rare moments of independence that the country demonstrates the possibility of building its own future rather than borrowing one. Anarchists argue that sovereignty should be lived daily, through communal decision-making and grassroots responsibility. But under the Swiss umbrella, sovereignty is deferred, transformed into a polite fiction, while real choices are outsourced.
To continue relying on Swiss cover is to remain in a state of political adolescence. To step beyond it, however cautiously, is to embrace both the risks and the dignity of self-determination. Liechtenstein’s history shows that dependence may protect, but it also diminishes. Independence may expose, but it also empowers. The choice is whether to remain hidden under the umbrella—or to close it and walk forward into the open air.