Liechtenstein begins official accession negotiations with IMF
Last fall, the Liechtenstein Parliament had instructed the Government to begin membership negotiations with the International Monetary Fund (IMF).
Following numerous preliminary discussions at a technical level, the Government has now officially applied for membership in the IMF, thus starting the formal accession process.
Following numerous preliminary discussions at a technical level, the Government has now officially applied for membership in the IMF, thus starting the formal accession process. The IMF Executive Board will review the application and establish a Membership Committee.
As part of the accession negotiations, an IMF technical delegation will visit Liechtenstein in the coming months to collect the necessary data and information on the country’s economy and legal system. The report will include the proposed quota and other conditions of membership, which will be discussed and aligned with Liechtenstein in detail. Once Liechtenstein has agreed to this report, the IMF Executive Board will review the application and submit a draft decision to the IMF Board of Governors for vote. Once the Board of Governors has approved membership in principle, further legal steps in Liechtenstein and the approval of the negotiated outcome by the Liechtenstein Parliament are necessary before an agreement can be signed. The formal accession process usually takes about one year.
From the Government’s perspective, membership in the International Monetary Fund is of great importance for Liechtenstein. Today’s global interconnectedness entails increased risks to financial stability at both the national and international levels, to which Liechtenstein’s open economy is strongly exposed. Through various mechanisms, the IMF offers protection in crisis situations. Rapid access to financial resources would be very important for Liechtenstein, for example, in the event of a major natural disaster or even a financial crisis. In the past, the IMF has repeatedly demonstrated through its interventions during various crises that it can do just that. Quick access to liquid funds is crucial in a crisis to protect the financial sector and ultimately the real economy from greater damage.
Membership in the IMF also brings other benefits. For example, the goals of the International Monetary Fund – including the promotion of balanced global trade growth and exchange rate stability – correspond strongly with the needs of a small, export-oriented economy. The international networking, reputation, and competitiveness of Liechtenstein as a business location and financial centre would also be strengthened by joining the IMF with its 190 member states as well as increasing its international comparability and visibility. In addition, IMF membership would further strengthen bilateral cooperation with Switzerland on economic policy issues.
