A handsome prince lives in a medieval castle surrounded by woods and snowcapped mountains. -Liechten- stein's new ruler fits the description, but this is not a fairy tale.
Prince Hans Adam is the technological age's manager-prince. When he talks about his future role as head of state, this descendant of 800 years of Austrian nobility sounds like the chairman of a corporate board of directors: ''A reigning prince should look at long-range projects and concentrate on guidelines , but leave the day-to-day management to the government,'' he says.
No company boss has the powers of a Liechtenstein sovereign, however. Although the tiny country is a direct democracy with referendums a regular occurrence, the Prince must approve all laws, open parliament, represent his nation abroad, and commute sentences.
This summer, Prince Franz Josef II, Europe's longest-reigning monarch (45 years), will step down, making way for his business school-trained eldest son as regent. The retiring Prince was the first of his family, which bought Liechtenstein in the 18th century, to actually live here. Under his reign, a 60 -square mile backwater nestled between Austria and Switzerland grew from poverty into one of the world's richest per capita nations.
Crossing the border from Switzerland into Liechtenstein, a country road meanders into the superficially sleepy capital of Vaduz. One of the first sights is a big, shiny post office selling one of this alpine land's most lucrative products - postage stamps. Each year, some 100,000 collectors in 127 countries subscribe to four new editions.
There is little sign of the estimated 25,000 foreign companies that have set up residence in the principality (pop. 26,000). But then, they are often not much more than names on post office boxes. A succession of prosperous banks, however, bear witness to Liechtenstein's lure for the world's rich. Bank secrecy is even harder to penetrate here than in Switzerland. The recurring international financial scandal regularly highlights Liechtenstein's very liberal company law regulations.
Above the town stands the craggy Castle of Vaduz. In the cobblestone courtyard, Prince Hans Adam's young butler waits to lead the way up to a surprisingly cozy sitting room dotted with family pictures. Neatly piled in a corner of the downstairs stone entrance are boots and helmets belonging to the prince's four school-age children.
A friendly handshake and Hans Adam explains why he thinks a reigning prince is not an anachronism today: ''A prince or a king does not belong to a political party, an elected president does. It is more difficult for him to be respected as a neutral arbiter. We can be more independent.''
For Liechtenstein, one of the world's smallest countries, he sees an added plus: ''The US president is received and heard everywhere, even when he is only a candidate. That is not so with a small country. A reigning prince, however, is there for a long time and he can gradually build up the contacts which his country needs.''
Prince Hans Adam is bent on bringing Liechtenstein into the United Nations. As with many small countries which have no embassy network abroad, the international forum is where they can feel the world's pulse. Adds Hans Adam: ''The world outside Europe is becoming more and more important for us.''
Liechtenstein exports more than 90 percent of its manufactured goods, with machinery and allegedly the world's best false teeth at the top of the list. An increasing percentage is sold outside Europe. This accounts for Liechtenstein's healthy economy as well as its position as an international financial center.
Will the new prince tighten up his country's much-criticized company laws and soften bank secrecy, a constant irritation to foreign governments out to track down their tax dodgers?
He responds by saying, ''We give legal assistance in cases of criminal abuse. It would be impossible, even if we had a police state, to prevent all misuse of our system. Even in communist countries, there are economic scandals.''
Why is Liechtenstein, with no natural resources, so prosperous? For the Prince, there is no doubt:
''A diversity of small- and medium-size firms, heavily dependent on exports, which have to rely on themselves because they receive no help from the state. We can only assist them through low taxation and that was, apparently, a good strategy.''
Liechtenstein has no army. Yet the No. 1 topic with the Prince, as with most politically aware Europeans today, is anxiety about the possible destruction of their homeland by nuclear war. Therefore, tiny Liechtenstein has been unusually active at the Madrid and Stockholm security conferences.
''The present defense strategy for Europe is not the optimum. Europe has to rely on the willingness of the United States to defend it. One can ask, 'How long will this willingness last?' It might be difficult for a new leadership in the Soviet Union to believe that the US would risk its own destruction for the freedom of Europe. Therefore, present policy is dangerous for the US, because it might be faced with the alternative of losing Europe or going into an atomic war. It is dangerous for the Soviet Union because through a miscalculation of the situation in Europe, it might destroy itself,'' he says.
The Prince would like to see a thorough rethinking of defense policy, including a transfer of Western Europe's nuclear weapons control to a European multilateral defense organization excluding the US.
Liechtenstein's Hans Adam can also get worked up about domestic politics. This year the country's men will vote once again on extension of voting rights to women.
''I am hoping that it will succeed this time. But if not, we must put the issue before our men again and again and again until they finally say 'yes!' ''
When he was 18 the Prince spent his holidays working in the office of Sen. Claiborne Pell (D) of Rhode Island. He came away with an indelible impression: ''My work was to cut out of the local papers whoever had died, been born, or received a degree, so that we could send an acknowledgment. Something that nobody does over here. That taught me how important it is to be close to your constituency.''
Today, the Prince's children go to the local schools. His wife, Princess Marie, shops in Vaduz. According to the sales assistant in Vaduz's fashionable boutique: ''She never wants any special attention.''