Europe

Luxembourg
Last reviewed: 29 March 2005

Country information

See entire profile

Area: 2,586 sq km
Population: 451,000
Capital City: Luxembourg (population 81,800)
Languages: Luxembourgish (national language), German and French
Religions: Predominantly Roman Catholic, but some Protestants, Jews and Muslims
Currency: euro
Major political parties: Christian Social People's Party (CSV), Luxembourg Socialist Workers' Party (LSAP), Democratic Party (DP), Action Committee for Democracy and Justice (ADR), Green Party, Marxist and Reformed Communist Party (Dei Lenk - the Left).
Government: Luxembourg is an hereditary Grand Duchy with a unicameral parliamentary system. The present Government is a coalition of the Christian Social Party (CSV) and the Socialist Party (LSAP).
Head of State: Grand Duke Henri (succeeded on 7 October 2000)
Prime Minister/Premier: Jean-Claude Juncker
Foreign Minister: Jean Asselborn
Luxembourg Government
Membership of international groupings/organisations: One of the six founding members of the European Community (EC) (now European Union (EU)) and an active member of North Atlantic Treaty Organisation (NATO), the Western European Union (WEU) and the United Nations (UN).

DID YOU KNOW?

The 1867 Treaty of London proclaimed the neutrality of Luxembourg and stipulated the evacuation of the fortress of Luxembourg by Prussian troops.
Grand Duke Jean (who reigned from 1964-2000) was a Colonel in the Irish Guards.
In 1952, Luxembourg was chosen as the first site of the European Coal and Steel community. The ECSC, founded in 1951, marked the start of the institutional development which led to the European Union.
Luxembourg is the site of several European institutions including the European Court of Justice, the European Court of Auditors, the European Investment Bank and parts of the European Commission.
Luxembourg will hold the EU Presidency from January to June 2005. The UK will hold the Presidency from July to December in the same year.

ECONOMY

Basic economic facts

GDP: $23.5 billion (€19.1 billion (2003))
Annual Growth: 1.2% in 2003 (2004 estimate: 3%)
Inflation: 2.1% (Dec 2003)
Major Industries: Banking/financial services, telecommunications, iron, steel and chemicals.

UK Trade & Investment Country Profile: Luxembourg

Luxembourg has a stable high-income economy. As a result of this, there are low unemployment rates, and low inflation. The steel industry dominates the Industrial sector, but diversifying to include products such as rubber and chemicals. Since the 1970's constant growth in the financial sector has made up for the decline in steel and this sector is now the dominant force in the economy. In Luxembourg, the farms are often small and family owned. More than 30% of the labour force are cross border workers, and the economy relies heavily on them.

HISTORY

963 - Independent County
13th Century - Independent Duchy (providing 4 Holy Roman Emperors)
1443 - Burgundian Rule
1506 - Spanish Rule
1684 - French Rule
1697 - Spanish Rule
1714 - Austrian Rule
1795 - French Rule
1814 - Grand Duchy under Dutch Rule
1839 - Independent Grand Duchy

BBC Timeline of Luxembourg

INTERNATIONAL RELATIONS

Relations with the international community

Luxembourg's external interests are centred on the EU, where the Government tends to favour integrationist proposals. They support developing the security role of the EU while maintaining the primacy of NATO and the transatlantic link. In countries where Luxembourg is not represented diplomatically, Belgium takes care of its economic interests and the Netherlands the political. Luxembourg held the Presidency of the EU from July to December 1997, the Presidency of the WEU from July to December 1999 and the Presidency of the Council of Europe from May to November 2002. Luxembourg will next hold the Presidency of the EU from January to June 2005.

Relations with the UK

Luxembourg enjoys good bilateral relations with the UK. The Grand Duke is an Honorary Major in the British Army. He and his family maintain close contacts with the UK. British Ministers frequently see their Luxembourg counterparts at EU meetings.

Cultural Relations with the UK

The number of Luxembourg students in the UK has been growing. Some 10% at undergraduate level now choose the UK. (Luxembourg does not yet have it's own fully fledged university).

Recent Visits

Inward:

Then Minister for Foreign Affairs, Lydie Polfer, October 2003
Prime Minister Juncker in April 2000

GEOGRAPHY

Luxembourg is located in Western Europe and shares borders with Belgium, France and Germany.

Trade and Investment with the UK

UK exports to Luxembourg went down by more than 32% to €341 million (2002: €504 million), whilst imports from Luxembourg went down by 16.5% to €591 million (2002: €708 million). Exports to the US fell by 20%, but exports to Asia (mainly China) rose by 38%. The balance of payments deficit fell from 11.6% of GDP in 2002 to 9.5% in 2003.

POLITICS

Recent Political Developments

The present government, which came to power on 31 July 2004 following elections on 13 June 2004, is a coalition of the Christian Social Party (CSV) and the Socialist Party (LSAP), headed respectively by Jean- Claude Juncker (CSV), who is Prime Minister and Minister of Finance, and Jean Asselborn (LSAP) who is Deputy Prime Minister and Minister of Foreign Affairs, Immigration and Asylum. The Democratic Party (DP) (the previous coalition partner with the CSV) lost a significant number of seats at the elections and is now the main opposition party. The next national elections will be in June 2009.

Luxembourg Government