Liechtenstein, one of the smallest and one of only two doubly landlocked countries in the world (the other being Uzbekistan). This monarchy has an interesting relationship with its neighboring nation, Switzerland, in matters of international representation and economics.
Liechtenstein and Switzerland are in a customs union and a monetary union. Switzerland acts as border control for Liechtenstein, often helps handle Liechtenstein's international relations, and protected Liechtenstein's neutrality in World War II. Liechtenstein's severe financial problems following its independence from the Austro-Hungarian empire played a large role in the strange interlocking politics of these two nations. Liechtenstein was in such dire straits economically that it disbanded its army in 1868. With the larger nation managing so many aspects of the Liechtenstein government, some incorrectly presume that the two may as well be one country.
Despite Liechtenstein close-knit and sometimes dependent relationship with its neighbor, the small country is distinct from the forever-neutral nation in many ways. Against Swiss neutrality policy, Liechtenstein gave asylum to 500 Russian soldiers during the Second World War.
Liechtenstein is one of the European countries to still hold a monarchy, and unlike the monarchy of the UK, Liechtenstein's prince has some governmental powers. The prince can veto the parliament's laws, call a referendum, propose legislation, and even disband the parliament.
Liechtenstein's economy has made a major comeback, yet its close economic and political ties with Switzerland remain. The two share an open border, and Liechtenstein, still possessing no army, relies on Switzerland for military defense. The extent of Switzerland's role in Liechtenstein's government can perhaps be well portrayed by the fact that, in the absence of representatives from Liechtenstein, Switzerland can enter into a treaty on Liechtenstein's behalf. Liechtenstein has entered into the European Free Trade Association as its own nation, separate from Switzerland, but the unique cooperation of these two countries' governments will likely continue even as Liechtenstein gains more independence.
Source: Wikipedia, BBC News