20th and 21st centuries
Until the end of World War I, Liechtenstein was closely tied first to the Austrian Empire and later to Austria-Hungary; the ruling princes continued to derive much of their wealth from estates in the Habsburg territories, and spent much of their time at their two palaces in Vienna. During World War I it did officially stay neutral, but was dependent on its neighbours and some, like Prince Heinrich of Liechtenstein got involved working for Austria-Hungary. The economic devastation caused by World War I forced the country to conclude a customs and monetary union with its other neighbour, Switzerland. In addition, popular unrest caused from economic devastation in the war directly led to the November 1918 Liechtenstein putsch, which created the process of a new constitution based on constitutional monarchy being introduced in 1921.
In 1929, 75-year-old Prince Franz I succeeded to the throne. He had just married Elisabeth von Gutmann, a wealthy woman from Vienna whose father was a Jewish businessman from Moravia. Although Liechtenstein had no official Nazi party, a Nazi sympathy movement arose within its National Union party. Local Liechtenstein Nazis identified Elisabeth as their Jewish "problem". Pro-Nazi agitation remained in Liechtenstein throughout the 1930s.
In March 1938, just after the annexation of Austria by Nazi Germany, Franz named as regent his 31-year-old grandnephew and heir-presumptive, Prince Franz Joseph. After making his grandnephew regent he moved to Feldsberg, Czechoslovakia and on 25 July, he died while at one of his family's castles, Castle Feldberg, and Franz Joseph formally succeeded him as the Prince of Liechtenstein.
In March 1939 a coup was attempted while Franz Joseph II was on a state visit to Berlin.
During World War II, Liechtenstein remained officially neutral, looking to neighbouring Switzerland for assistance and guidance, while family treasures from dynastic lands and possessions in Bohemia, Moravia, and Silesia were taken to Liechtenstein for safekeeping. Operation Tannenbaum, the Nazi plan for conquest of Switzerland, also included Liechtenstein, and the Nazi "Pan German" dream of uniting all German-speakers in the Reich would have also included the population of Liechtenstein. However in 1944, the Nazis abandoned implementing this plan after the Allied invasion of France, and Liechtenstein was spared from enduring a Nazi occupation.
At the close of the conflict, Czechoslovakia and Poland, acting to seize what they considered German possessions, expropriated all of the Liechtenstein dynasty's properties in Bohemia, Moravia, and Silesia. The expropriations (subject to modern legal dispute at the International Court of Justice) included over 1,600 km2 (618 sq mi) of agricultural and forest land (most notably the UNESCO listed Lednice–Valtice Cultural Landscape), and several family castles and palaces.
Liechtenstein was in dire financial straits following the end of World War II. The Liechtenstein dynasty often resorted to selling family artistic treasures, including the portrait Ginevra de' Benci by Leonardo da Vinci, which was purchased by the National Gallery of Art of the United States in 1967 for US$5 million ($48 million in 2025 dollars), then a record price for a painting.
Citizens of Liechtenstein were forbidden to enter Czechoslovakia during the Cold War. The diplomatic conflict revolving around the controversial postwar Beneš decrees resulted in Liechtenstein not having international relations with the Czech Republic or Slovakia. Diplomatic relations were established between Liechtenstein and the Czech Republic on 13 July 2009, and with Slovakia on 9 December 2009.
The Constitution of Liechtenstein was amended in March 2003 to give additional powers to the monarch.
In 2004, Prince Hans-Adam II transferred day-to-day governmental duties to his eldest son Hereditary Prince Alois as regent, as his father had done to him in 1984 to prepare him for the role of Prince.
In 2005, a government-commissioned investigation revealed that Jewish slave labourers from the Strasshof concentration camp, provided by the SS, had worked on estates in Austria owned by Liechtenstein's Princely House. The report indicated that though no evidence was found of the House's knowledge of the slave labour, the House bore responsibility.
