The Liechtenstein government has advocated joining the International Monetary Fund (IMF). Membership of the organization would primarily be intended to provide security in times of crisis. Other benefits include targets for trade growth and exchange rate stability that tie in nicely with Liechtenstein’s economic ambitions.
Liechtenstein will start accession negotiations with the IMF. A resolution adopted by the government of the Principality of Liechtenstein in May was announced and explained at a media conference on July 14. The Landtag, Liechtenstein’s unicameral parliament, is to be extensively informed about the accession process via the corresponding report and will be involved in the decision at an early stage.
“Membership of the International Monetary Fund is of great importance for our country, as it serves as a safeguard in times of crisis”, comments Daniel Risch, Prime Minister of the Principality of Liechtenstein, in the government media release covering the press conference. As Liechtenstein does not have its own central bank, the country lacks rapid access to liquidity in the event of a crisis, Risch outlines. In this context, the IMF would assume the role of what is known as a ‘lender of last resort’. In a financial crisis or in the wake of a natural disaster affecting the entire country, “the rapid availability of liquid funds” could be the decisive factor “in protecting the financial sector and ultimately the real economy from major damage”, the media release states.
In addition to providing security in times of crisis, the government also touches upon several other advantages of IMF membership in the media release. For example, IMF goals such as promoting balanced global trade growth and ensuring that the stability of exchange rates correspond with the interests of Liechtenstein’s export-oriented economy. Moreover, accession to the IMF, which has 190 member states in total, would strengthen the reputation and competitiveness of the business location and financial center of Liechtenstein.
