The German news media recently attacked the Liechtenstein government for its harmful and unfair tax policies concerning Germany. They wanted the Liechtenstein government to change or quit these unfair practices but in reality it was determined that the Liechtenstein government was committed to its international business dealings and financial center to being of the highest standards.
Taking into consideration that tax competition is older than the Federal Republic and the European Union, the German government is requesting that the Liechtenstein government give up its competitive advantage over Germany so that there is some form of economic equality between the nations on the international market.
Taking into consideration the legitimate business interests in Liechtenstein and the tax revenues and state sovereignty issues between the two nations, the question arises as to what ratio economic equality and national sovereignty should play into making a decision about what to do? The answer is that in the era of globalization, the fundamental importance of national sovereignty and international relations do and will influence national policy on these issues. The next question is in that looking at a country's fiscal policy, does progress and increasing a country's prosperity affect the outcome of what a country does concerning its competitive advantage or disadvantage in the international market? These are the questions and answers explain why the international market is lucrative, volatile, and a challenging place to work in for a nation.