In a letter published in the Zurich Tages-Anzeiger on Sept. 11, 2008, the ruler of the tiny Alpine principality -- often referred to as a tax haven -- complained about the poor relationship between his country and Germany.
The latest fracas started with a request by the Jewish Museum in Berlin to borrow a painting from the prince's collection, for an exhibit on looted art.
No more loans for Germany
Prince Hans-Adam II refused the loan in his letter, which was addressed to Jewish Museum Director Michael Blumenthal and published in the Zurich Tages-Anzeiger newspaper on Thursday, Sept. 11.
He told Blumenthal that Liechtenstein would no longer make loans to Germany. Furthermore, he wrote in the that "as time goes on, (Germany) is less and less capable of sticking to the basic principles of international law."
He added that he had already "survived three German 'Reich's" and hopes "we will survive a fourth."
The dispute begins with a squabble over loaned paintings, but also may have to do with investigations against German tax evaders tied to Liechtenstein banks.
History of confiscated art
Ex-US finance minister Blumenthal, 82, is now the director of the Jewish Museum in Berlin. He had request a loan of a painting by 17th century Dutch portrait painter Frans Hals, for an upcoming exhibit entitled "Looting and Restitution: Jewish-Owned Cultural Artifacts from 1933 to the Present."
The prince's refusal can be traced back to an earlier legal battle over another Dutch painting.
After the Second World War, then-Czechoslovakia had confiscated an oil painting by Peter van Laers that belonged to the royal house. When the painting was exibited in Cologne in 1991, the prince asked Germany to confiscate it and return it to him.
Germany refused, and the prince pursued the case through the German courts, and all the way to the International Court of Justice in The Hague.
"We have managed to survive"
In his letter on Thursday, Prince Hans-Adam referred to the empire that dissolved after the First World War when he wrote: "We are still in a state of war with the second German Reich, since (the government) fell before we could make peace with it ... Thank God, the Third Reich fell before it could make good on its threat to 'annex' Liechtenstein."
"When it comes to German-Liechtenstein relations, we are hoping for better times," the prince wrote.
"We have managed to survive three German empires in the past 200 years, and I am hopeful that we will survive a fourth," he said.
For his part Blumenthal, who left Berlin in 1939 to flee the Nazis, refused to comment on the letter, the Tages-Anzeiger said.
Tax evasion the real sticking point?
The relationship between Berlin and the Liechtenstein capital Vaduz have been seriously strained by recent investigations into tax evasion.
Germany's Federal Intelligence Service has purchased confidential client data from a prior employee of the LGT Banking Group, which belongs to the royal house of Liechtenstein.
The data is currently being used in Germany to prosecute people who are accused of evading the German tax authorities by hiding their assets in Liechtenstein.