Luxembourg


Luxembourg
/luk"seuhm berrg'/; Fr. /lyuuk sahonn boohrdd"/, n.
1. a grand duchy surrounded by Germany, France, and Belgium. 422,474; 999 sq. mi. (2585 sq. km).
2. a city in and the capital of this grand duchy. 78,400.
3. a province in SE Belgium: formerly a part of the grand duchy of Luxembourg. 319,642; 1706 sq. mi. (4420 sq. km). Cap.: Arlon.
Also, Luxemburg (for defs. 1, 2).

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Luxembourg

Introduction Luxembourg -
Background: Founded in 963, Luxembourg became a grand duchy in 1815 and an independent state under the Netherlands. It lost more than half of its territory to Belgium in 1839, but gained a larger measure of autonomy. Full independence was attained in 1867. Overrun by Germany in both World Wars, it ended its neutrality in 1948 when it entered into the Benelux Customs Union and when it joined NATO the following year. In 1957, Luxembourg became one of the six founding countries of the European Economic Community (later the European Union) and in 1999 it joined the euro currency area. Geography Luxembourg
Location: Western Europe, between France and Germany
Geographic coordinates: 49 45 N, 6 10 E
Map references: Europe
Area: total: 2,586 sq km water: 0 sq km land: 2,586 sq km
Area - comparative: slightly smaller than Rhode Island
Land boundaries: total: 359 km border countries: Belgium 148 km, France 73 km, Germany 138 km
Coastline: 0 km (landlocked)
Maritime claims: none (landlocked)
Climate: modified continental with mild winters, cool summers
Terrain: mostly gently rolling uplands with broad, shallow valleys; uplands to slightly mountainous in the north; steep slope down to Moselle flood plain in the southeast
Elevation extremes: lowest point: Moselle River 133 m highest point: Buurgplaatz 559 m
Natural resources: iron ore (no longer exploited), arable land
Land use: arable land: 25% permanent crops: 0% other: 75% (includes Belgium) (1998 est.)
Irrigated land: 40 sq km (includes Belgium) (1998 est.)
Natural hazards: NA Environment - current issues: air and water pollution in urban areas, soil pollution of farmland Environment - international party to: Air Pollution, Air
agreements: Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulphur 85, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Biodiversity, Climate Change, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands signed, but not ratified: Climate Change-Kyoto Protocol, Environmental Modification
Geography - note: landlocked; the only Grand Duchy in the world, it is the smallest of the European Union member states People Luxembourg -
Population: 448,569 (July 2002 est.)
Age structure: 0-14 years: 18.9% (male 43,634; female 41,164) 15-64 years: 67% (male 151,364; female 149,156) 65 years and over: 14.1% (male 25,486; female 37,765) (2002 est.)
Population growth rate: 1.25% (2002 est.)
Birth rate: 12.06 births/1,000 population (2002 est.)
Death rate: 8.83 deaths/1,000 population (2002 est.)
Net migration rate: 9.26 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.07 male(s)/female under 15 years: 1.06 male(s)/female 15-64 years: 1.01 male(s)/female 65 years and over: 0.67 male(s)/ female total population: 0.97 male(s)/ female (2002 est.)
Infant mortality rate: 4.71 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 77.48 years female: 80.97 years (2002 est.) male: 74.2 years
Total fertility rate: 1.7 children born/woman (2002 est.) HIV/AIDS - adult prevalence rate: 0.16% (1999 est.) HIV/AIDS - people living with HIV/ NA
AIDS:
HIV/AIDS - deaths: less than 100 (1999 est.)
Nationality: noun: Luxembourger(s) adjective: Luxembourg
Ethnic groups: Celtic base (with French and German blend), Portuguese, Italian, Slavs (from Montenegro, Albania, and Kososvo) and European (guest and resident workers)
Religions: the greatest preponderance of the population is Roman Catholic with a very few Protestants, Jews, and Muslims note: 1979 legislation forbids the collection of religious statistics
Languages: Luxembourgish (national language), German (administrative language), French (administrative language)
Literacy: definition: age 15 and over can read and write total population: 100% male: 100% female: 100% (2000 est.) Government Luxembourg -
Country name: conventional long form: Grand Duchy of Luxembourg conventional short form: Luxembourg local short form: Luxembourg local long form: Grand Duche de Luxembourg
Government type: constitutional monarchy
Capital: Luxembourg Administrative divisions: 3 districts; Diekirch, Grevenmacher, Luxembourg
Independence: 1839 (from the Netherlands)
National holiday: National Day (Birthday of Grand Duchess Charlotte) 23 June
Constitution: 17 October 1868, occasional revisions
Legal system: based on civil law system; accepts compulsory ICJ jurisdiction
Suffrage: 18 years of age; universal and compulsory
Executive branch: chief of state: Grand Duke HENRI (since 7 October 2000); Heir Apparent Prince GUILLAUME (son of the monarch, born 11 November 1981) head of government: Prime Minister Jean-Claude JUNCKER (since 1 January 1995) and Vice Prime Minister Lydie POLFER (since 7 August 1999) cabinet: Council of Ministers recommended by the prime minister and appointed by the monarch elections: none; the monarch is hereditary; prime minister and vice prime minister appointed by the monarch, following popular election to the Chamber of Deputies; they are responsible to the Chamber of Deputies note: government coalition - CSV and DP
Legislative branch: unicameral Chamber of Deputies or Chambre des Deputes (60 seats; members are elected by direct, popular vote to serve five-year terms) elections: last held 13 June 1999 (next to be held by June 2004) note: there is also a Council of State that serves as an advisory body to the Chamber of Deputies; the Council of State has 21 members appointed by the Grand Duke on the advice of the prime minister election results: percent of vote by party - CSV 29.79%, DP 21.58%, LSAP 23.75%, ADR 10.36%, Green Party 9.09%, the Left 3.77%; seats by party - CSV 19, DP 15, LSAP 13, ADR 6, Green Party 5, the Left 2
Judicial branch: judicial courts and tribunals (3 Justices of the Peace, 2 district courts, and 1 Supreme Court of Appeals); administrative courts and tribunals (State Prosecutor's Office, administrative courts and tribunals, and the Constitutional Court); judges for all courts are appointed for life by the monarch Political parties and leaders: Action Committee for Democracy and Justice or ADR [Robert MEHLEN]; Christian Social People's Party or CSV (known also as Christian Social Party or PCS) [Erna HENNICOT- SCHOEPGES]; Democratic Party or DP [Lydie POLFER]; Green Party [Abbes JACOBY and Felix BRAS]; Luxembourg Socialist Workers' Party or LSAP [Jean ASSELBORN]; Marxist and Reformed Communist Party DEI LENK (the Left) [no formal leadership]; other minor parties Political pressure groups and ABBL (bankers' association); ALEBA
leaders: (financial sector trade union); Centrale Paysanne (federation of agricultural producers); CEP (professional sector chamber); CGFP (trade union representing civil service); Chambre de Commerce (Chamber of Commerce); Chambre des Metiers (Chamber of Artisans); FEDIL (federation of industrialists); LCGP (center-right trade union); OGBL (center-left trade union) International organization ACCT, Australia Group, Benelux, CCC,
participation: CE, EAPC, EBRD, ECE, EIB, EMU, EU, FAO, IAEA, IBRD, ICAO, ICC, ICFTU, ICRM, IDA, IEA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, ISO, ITU, NATO, NEA, NSG, OECD, OPCW, OSCE, PCA, UN, UNCTAD, UNESCO, UNIDO, UPU, WCL, WEU, WHO, WIPO, WMO, WTrO, ZC Diplomatic representation in the US: chief of mission: Ambassador Arlette CONZEMIUS-PACCOURD chancery: 2200 Massachusetts Avenue NW, Washington, DC 20008 consulate(s) general: New York and San Francisco FAX: [1] (202) 328-8270 telephone: [1] (202) 265-4171 Diplomatic representation from the chief of mission: Ambassador
US: (vacant); Charge d'Affaires Gerald LOFTUS embassy: 22 Boulevard Emmanuel- Servais, L-2535 Luxembourg City mailing address: American Embassy Luxembourg, Unit 1410, APO AE 09126- 1410 (official mail); American Embassy Luxembourg, PSC 9, Box 9500, APO AE 09123 (personal mail) telephone: [352] 46 01 23 FAX: [352] 46 14 01
Flag description: three equal horizontal bands of red (top), white, and light blue; similar to the flag of the Netherlands, which uses a darker blue and is shorter; design was based on the flag of France Economy Luxembourg
Economy - overview: This stable, high-income economy features solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector has more than compensated for the decline in steel. Services, especially banking, account for a substantial proportion of the economy. Agriculture is based on small family-owned farms. The economy depends on foreign and trans-border workers for 30% of its labor force. Although Luxembourg, like all EU members, has suffered from the global economic slump, the country has maintained a fairly robust growth rate. On 1 January 2002, Luxembourg - together with 11 of its EU partners - began to replace its circulating national currency with the euro.
GDP: purchasing power parity - $19.2 billion (2001 est.)
GDP - real growth rate: 4% (2001 est.)
GDP - per capita: purchasing power parity - $43,400 (2001 est.) GDP - composition by sector: agriculture: 1% industry: 30% services: 69% (2000 est.) Population below poverty line: NA% Household income or consumption by lowest 10%: NA%
percentage share: highest 10%: NA% Inflation rate (consumer prices): 2.4% (2001 est.)
Labor force: 262,300 (of whom 87,400 are foreign cross-border workers primarily from France, Belgium, and Germany) (2000) Labor force - by occupation: services 90.1%, industry 8%, agriculture 1.9% (1999 est.)
Unemployment rate: 2.4% (2001 est.)
Budget: revenues: $4.44 billion expenditures: $4.44 billion, including capital expenditures of $NA (2000 est.)
Industries: banking, iron and steel, food processing, chemicals, metal products, engineering, tires, glass, aluminum Industrial production growth rate: 1.9% (2001 est.) Electricity - production: 467.7 million kWh (2000) Electricity - production by source: fossil fuel: 57.52% hydro: 25.66% other: 16.82% (2000) nuclear: 0% Electricity - consumption: 6.158 billion kWh (2000)
Electricity - exports: 735 million kWh (2000)
Electricity - imports: 6.458 billion kWh (2000)
Agriculture - products: barley, oats, potatoes, wheat, fruits, wine grapes; livestock products
Exports: $7.85 billion (f.o.b., 2000)
Exports - commodities: machinery and equipment, steel products, chemicals, rubber products, glass
Exports - partners: EU 85% (Germany 24%, France 21%, Belgium 13%), US 4% (2000)
Imports: $10.25 billion (c.i.f., 2000)
Imports - commodities: minerals, metals, foodstuffs, quality consumer goods
Imports - partners: EU 88% (Belgium 37%, Germany 25%, France 13%), US 4% (2000)
Debt - external: $NA
Economic aid - donor: ODA, $160 million (1999)
Currency: euro (EUR); Luxembourg franc (LUF) note: on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions within the member countries
Currency code: EUR; LUF
Exchange rates: euros per US dollar - 1.1324 (January 2002), 1.1175 (2001), 1.0854 (2000), 0.9386 (1999); Luxembourg francs per US dollar - 34.77 (January 1999), 36.299 (1998), 35.774 (1997)
Fiscal year: calendar year Communications Luxembourg - Telephones - main lines in use: 314,700 (1999) Telephones - mobile cellular: 215,741 (2000)
Telephone system: general assessment: highly developed, completely automated and efficient system, mainly buried cables domestic: nationwide cellular telephone system; buried cable international: 3 channels leased on TAT-6 coaxial submarine cable (Europe to North America) Radio broadcast stations: AM 2, FM 9, shortwave 2 (1999)
Radios: 285,000 (1997) Television broadcast stations: 5 (1999)
Televisions: 285,000 (1998 est.)
Internet country code: .lu Internet Service Providers (ISPs): 8 (2000)
Internet users: 100,000 (2001) Transportation Luxembourg -
Railways: total: 274 km standard gauge: 274 km 1.435-m gauge (242 km electrified) (2001)
Highways: total: 5,166 km paved: 5,166 km (including 118 km of expressways) unpaved: 0 km (1999)
Waterways: 37 km (on the Moselle)
Pipelines: petroleum products 48 km
Ports and harbors: Mertert
Merchant marine: total: 60 ships (1,000 GRT or over) totaling 1,487,752 GRT/2,123,579 DWT ships by type: bulk 2, chemical tanker 13, container 8, liquefied gas 19, passenger 4, petroleum tanker 8, roll on/roll off 6 note: includes some foreign-owned ships registered here as a flag of convenience: Belgium 21, Finland 3, France 8, Germany 10, Monaco 1, Netherlands 3, Norway 1, United Kingdom 9, United States 3 (2002 est.)
Airports: 2 (2001) Airports - with paved runways: total: 1 over 3,047 m: 1 (2001) Airports - with unpaved runways: total: 1 under 914 m: 1 (2001)
Heliports: 1 (2001) Military Luxembourg -
Military branches: Army, Grand Ducal Police Military manpower - military age: 19 years of age (2002 est.) Military manpower - availability: males age 15-49: 113,557 (2002 est.) Military manpower - fit for military males age 15-49: 93,429 (2002 est.)
service: Military manpower - reaching males: 2,565 (2002 est.)
military age annually: Military expenditures - dollar $147.8 million (FY01/02)
figure: Military expenditures - percent of 0.8% (FY01/02)
GDP: Transnational Issues Luxembourg - Disputes - international: none

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I
City (pop., 2001 prelim.: 76,833), capital of Luxembourg.

A rocky promontory along the Alzette River was the site of a Roman fortress and later of a Frankish castle, around which the medieval town developed. Siegfried, count of Ardennes, purchased this castle and made the duchy of Luxembourg independent in 963. The strongest in Europe after Gibraltar, the castle was garrisoned by the Prussians as a bulwark of the German Confederation (1815–66); it was dismantled by treaty in 1867. Long an important road and railway focus, the city is also an important industrial and financial centre. It is the seat of the European Court of Justice and several administrative offices of the European Union.
II
officially Grand Duchy of Luxembourg

Country, western Europe.

Area: 999 sq mi (2,586 sq km). Population (2002 est.): 447,000. Capital: Luxembourg. Most of the population is ethnically French or German. Languages: Luxembourgian, French, German. Religions: Roman Catholicism, Protestantism (Lutheranism), Judaism (a small minority). Currency: euro. It is 51 mi (82 km) long and 35 mi (56 km) wide and is divided into two regions: the Oesling, an extension of the Ardennes Mountains in the northern third of the country consisting of a high plateau dissected by river valleys; and the Bon Pays, or Gutland, a rolling plateau that occupies the rest of the country. Luxembourg's economy is largely based on heavy industry and international trade and banking, and its per capita income is among the highest in the world. It is a constitutional monarchy with two legislative houses; its chief of state is the grand duke, and the head of government is the prime minister. At the time of Roman conquest (57–50 BC), the area was inhabited by a Belgic tribe, the Treveri. After AD 400, Germanic tribes invaded the region. It later came under Charlemagne's empire. Made a duchy in 1354, it was ceded to the house of Burgundy in 1441 and to the Habsburgs in 1477. In the mid-16th century it became part of the Spanish Netherlands. The Congress of Vienna in 1815 made it a grand duchy and awarded it to The Netherlands. After an uprising in 1830, its western portion became part of Belgium, while the remainder was held by The Netherlands. In 1867 the European powers guaranteed the neutrality and independence of Luxembourg. In the late 19th century it built a great steel industry by exploiting its extensive iron ore deposits. It was invaded and occupied by Germany in both world wars. Following World War II, it abandoned its neutrality by joining NATO in 1949. It joined the Benelux Economic Union in 1944 and the European Coal and Steel Community, a forerunner of the European Union, in 1952. Luxembourg ratified the Maastricht Treaty on European Union in 1992 and adopted the euro as its official monetary unit in 1999.

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▪ 2009

Area:
2,586 sq km (999 sq mi)
Population
(2008 est.): 488,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      Luxembourg's diversified economy continued to provide an extraordinarily high standard of living in 2008, with a GDP per capita ranked second in the world, after Qatar. Although the meltdown in the world's financial markets was expected to slow the rate of growth of Luxembourg's economy during the year, its growth was still projected to continue above the European average.

      With most of the country's banks foreign owned, Luxembourg was spared the brunt of the global crisis in banking. Instead, the country was able to help prop up some failing institutions. On September 28 Belgium, Luxembourg, and The Netherlands pumped €11.2 billion (€1 = about $1.40) into the Benelux banking group Fortis NV and agreed to nationalize 49% of the bank's operations within each respective country. Two days later Luxembourg joined with Belgium and France to inject almost €6.4 billion into the French-Belgian banking group Dexia, which had seen its U.S. bond insurer FSA suffer amid the collapsing U.S. mortgage market. After French Pres. Nicolas Sarkozy called for Luxembourg's support for a structural reform of global finances, Prime Minister Jean-Claude Juncker responded that Luxembourg “will not give up its banking secrecy tomorrow morning, but we will take part in any discussions on improving transparency on financial markets.”

Anne Roby

▪ 2008

Area:
2,586 sq km (999 sq mi)
Population
(2007 est.): 467,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      The global competitiveness of Luxembourg's economy, which ranked in ninth place in 2006, rose to third in 2007. While more than 80% of goods produced in Luxembourg were exported to the EU, the country was working actively to diversify its trade internationally. Of particular interest was the Asia-Pacific region. Luxembourg (along with Belgium) reached out to Vietnam, urging local companies to invest more in that country. Prime Minister Jean-Claude Juncker's government also pledged to support Vietnam's relations with the EU.

      Luxembourg continued to work to develop its infrastructure and housing stock. A new airport terminal was scheduled to open in 2008. A major real-estate development in the heart of the city, which would offer apartments, office space, shopping, and entertainment, was also due to be completed in 2008.

      In August Luxembourgers mourned the death of former prime minister Gaston Thorn (Thorn, Gaston Egmond ). His appointment in 1981 as chair of the Commission of the European Economic Community, forerunner of the EU, set the stage for future European integration.

Anne Roby

▪ 2007

Area:
2,586 sq km (999 sq mi)
Population
(2006 est.): 461,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      Luxembourg's Grand Duke Henri on Sept. 3, 2006, began a weeklong state visit to China at the invitation of Chinese Pres. Hu Jintao. In addition to exchanging ideas on bilateral relations and international areas of concern, Henri, a member of the International Olympic Committee, toured the Beijing sites for the 2008 Olympic Games. In May Prime Minister Jean-Claude Juncker was awarded the International Charlemagne Prize 2006 in recognition of his two decades of work as a key figure at the forefront of the process of European integration, longer than all of the other heads of state and of government involved.

      A survey published by the Organisation for Economic Co-operation and Development indicated some concern about Luxembourg's economy, stating that productivity slowed in the first half of the year and that the country's inflation rate of 3% was higher than that of its neighbours. In an analysis of more than 150 selected countries, however, the IMF reported that in 2005 Luxembourg led the world with a GDP per capita of nearly $69,800.

Anne Roby

▪ 2006

Area:
2,586 sq km (999 sq mi)
Population
(2005 est.): 457,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      Luxembourg continued to prosper in 2005. In May it was reported that there were 161 banks in the country, with 22,711 employees and total banking assets exceeding $725 billion. There were also 13,569 holding companies, with total capital of €36.4 billion (about $46 billion) established in Luxembourg, and financial services contributed the greatest share (28%) of the grand duchy's income. According to a CIA report, Luxembourg again led the world with the highest GDP per capita: about $64,000 in 2004.

      Luxembourg remained one of the EU's firmest supporters in 2005. In January, Prime Minister Jean-Claude Juncker began a two-year term as the first permanent president of the 12-nation Eurogroup, and on June 30 he finished his term as president of the EU. Luxembourg approved the proposed EU constitution in a referendum on July 10.

      Grand Duchess Joséphine-Charlotte, mother of Grand Duke Henri, died at age 77 on January 10. In her honour the grand duke named Luxembourg's new concert venue the Grande-Duchesse Joséphine-Charlotte Concert Hall. The stunning $70 million structure was designed by Christian de Portzamparc. Its main auditorium was the new home of the Luxembourg Philharmonic Orchestra, and smaller rooms played host to chamber music and experimental music.

Anne Roby

▪ 2005

Area:
2,586 sq km (999 sq mi)
Population
(2004 est.): 454,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      In Luxembourg's parliamentary elections, held on June 13, 2004, the Christian Social People's Party again came in first, winning 36.11% of the vote and 24 of the 60 seats in the Chamber of Deputies. The Luxembourg Socialist Workers' Party captured 14 seats (23.37%), followed by the Democratic Party with 10 seats (16.05%), the Greens (7 seats; 11.58%), and the Action Committee for Democracy and Pension Justice (5 seats; 9.95%). Jean-Claude Juncker, first appointed in January 1995, continued as prime minister. Major issues in the election were the country's position in the enlarged European Union, of which Luxembourg was a founding member, and concerns about increased illegal immigration, domestic security, and the economy.

      The economy, based on private banking services and investment businesses, continued to thrive, however. The Economist reported that Luxembourg had the highest GDP per capita in the world (followed by the U.S.and Norway).

      In September EU finance ministers appointed Juncker “Mr. Euro,” the first permanent president of the 12 euro-zone nations. This renewable two-year appointment replaced the previous system, in which the chair of the euro group changed every six months along with the EU's rotating presidency. Juncker was to take up this additional post on Jan. 1, 2005.

Anne Roby

▪ 2004

Area:
2,586 sq km (999 sq mi)
Population
(2003 est.): 453,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      In 2003 Luxembourg actively pursued its commitment to the integration of Europe. Prime Minister Jean-Claude Juncker represented Luxembourg at the European Council meeting held in Brussels on October 16–17. EU foreign ministers met in Luxembourg on October 13 and approved an aid plan for the reconstruction of Iraq. The pledge of €200 million (about $235.5 million) required approval by the European Parliament.

      In the ongoing battle against tax evasion, 12 of the 15 EU countries agreed to share information on savings accounts of EU citizens abroad. Luxembourg, Austria, and Belgium held out for their banking secrecy laws, and they (along with nonmember Switzerland) were allowed instead to impose a withholding tax on the accounts. Meanwhile, Luxembourg maintained its status as one of the world's richest countries per capita.

      A ceremony on October 15 marked the return of archives from World War II. The files of the Grande Loge organization had been hidden during the Nazi occupation, but they had been seized by the Red Army in the last months of the war and removed to the Soviet Union. The director of Luxembourg's national archives received the eight cartons of historical files.

Anne Roby

▪ 2003

Area:
2,586 sq km (999 sq mi)
Population
(2002 est.): 447,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      A bomb threat was called in to local police during a meeting of European Union foreign ministers in the Kirchberg cultural centre in Luxembourg on Oct. 22, 2002. Although no explosives were found during the search, the phone call was traced, and two men were arrested.

      A peace march of about 1,000 demonstrators—large for Luxembourg—was held on October 19 to protest the potential war with Iraq. The demonstration was held around the British and American embassies.

      Amid concerns about recession and the global economy, Luxembourg released a balanced budget plan for 2003 that called for a 7.72% increase in expenditures. Almost half of the allotment, some €2.8 billion (€ = about $1) was designated for such social projects as pensions and geriatric health care, while €873 million was earmarked for new infrastructure developments.

      Luxembourg mourned the death of Pierre Werner, who had served for 20 years as the country's prime minister (1959–74; 1979–84) and whose plan for a common European currency led to the creation of the euro. (See Obituaries (Werner, Pierre ).)

      Luxembourg suffered its first fatal airplane crash on November 6 when a Luxair flight from Berlin crashed near Luxembourg's international airport. (See Disasters).

Anne Roby

▪ 2002

Area:
2,586 sq km (999 sq mi)
Population
(2001 est.): 444,000
Capital:
Luxembourg
Chief of state:
Grand Duke Henri
Head of government:
Prime Minister Jean-Claude Juncker

      In 2001, his first year as head of state, Grand Duke Henri sought to make his own mark as leader of Luxembourg. In an emotional ceremony on June 21, he presented his father, Grand Duke Jean, with the Croix de la Résistance in honour of his father's service with the British army during World War II. Then on October 10, stating that he wished to underscore the importance of its work, Grand Duke Henri broke with tradition by officially opening the parliament in person. The last time the parliament had been opened by a royal was in 1877.

      The parliament voted unanimously on June 28 to extend and upgrade the European Parliament complex. It planned to expand the conference centre, build new office blocks, and add a concert hall. Also in June, the head of Luxembourg's army proposed to increase its size, to purchase a military transport plane, and, with Belgium, to buy a transport ship. There were again proposals to establish a University of Luxembourg, but government officials felt a full university in the country would discourage its citizens from studying abroad and have a negative effect on their overall education.

      In the wake of the September 11 terrorist attacks in the U.S., several Luxembourg banks reported that some of their customers might have ties to Osama bin Laden (see Biographies (bin Laden, Osama )), and their bank accounts were placed under investigation.

Anne Roby

▪ 2001

Area:
2,586 sq km (999 sq mi)
Population
(2000 est.): 439,000
Capital:
Luxembourg
Chief of state:
Grand Dukes Jean and, from October 7, Henri
Head of government:
Prime Minister Jean-Claude Juncker

      Luxembourg celebrated a new chief of state as Crown Prince Henri was sworn in as the new grand duke by the parliament on October 7. His father, Grand Duke Jean, formally abdicated at the age of 79 to hand responsibility over to his son. Henri began his official duties on October 9 with visits to Paris, where he met with French Pres. Jacques Chirac and Prime Minister Lionel Jospin, and then to Berlin, where he met with German Pres. Johannes Rau and Chancellor Gerhard Schröder. The country also welcomed the news that Prince William, the youngest son of Grand Duke Jean, regained consciousness in early October. He had been in a coma since September 10, when he incurred serious injuries in a car crash near Paris.

      The crime rate in Luxembourg had been so low that the country had been considering closing its only prison because it was usually standing empty. The quiet was broken on May 31, however, when a gunman with a history of mental illness took hostage some 40 children and teachers at a day-care centre, demanding money and an airplane to fly him to Libya. After a 30-hour standoff, police stormed the centre, shot and wounded the gunman, and rescued the children and their teachers.

      In May Luxembourg announced that it was freezing eight accounts containing more than $600 million belonging to the late Nigerian dictator Gen. Sani Abacha and was referring the case to the current Nigerian government, which believed that billions of dollars had been embezzled and smuggled abroad.

Anne Roby

▪ 2000

Area:
2,586 sq km (999 sq mi)
Population
(1999 est.): 432,000
Capital:
Luxembourg
Chief of state:
Grand Duke Jean
Head of government:
Prime Minister Jean-Claude Juncker

      Luxembourg continued to prosper in 1999, with gross domestic product estimated at some $40,000 per capita, giving the grand duchy the highest standard of living among the 15 European Union nations. In December it was announced that Grand Duke Jean would abdicate in 2000 in favour of his oldest son. The parliament passed legislation in May to enable the development of a pan-European pension fund industry. The finance sector planned to expand into such secured assets as mortgages throughout Europe and to make Luxembourg a centre for electronic commerce. Media and satellite broadcasting grew as well, and three new satellites were under construction.

      In parliamentary elections held June 13, the Socialist Workers' Party, which had been part of the ruling coalition with the Christian Social People's Party for 15 years, lost seats to the Democratic Party, which led to the resignation of the government. A new coalition of the Christian Social People's Party and the Democratic Party, again led by Prime Minister Jean-Claude Juncker, took office in August.

      The appointment of James Hormel as U.S. ambassador to Luxembourg, which had been stalled in the U.S. Senate for almost two years because of his avowed homosexuality, was finally approved in June. Luxembourg, which had strong antidiscrimination laws, applauded the persistence of Hormel and Pres. Bill Clinton.

Anne Roby

▪ 1999

      Area: 2,586 sq km (999 sq mi)

      Population (1998 est.): 425,000

      Capital: Luxembourg

      Chief of state: Grand Duke Jean

      Head of government: Prime Minister Jean-Claude Juncker

      In a letter to the legislature on March 4, 1998, Grand Duke Jean named his son, Prince Henri, "lieutenant-representative," which allowed him to represent his father in all official duties and thereby set the stage for Henri to succeed to the throne. Grand Duke Jean had taken office on Nov. 12, 1964.

      Prime Minister Jean-Claude Juncker in his state of the nation address declared information technology the "fourth factor of production." With further investment in electronic infrastructure, accelerated intensive training for schoolchildren and the unemployed, and the legal framework in place, he aimed to develop Luxembourg as a center of electronic commerce.

      Luxembourg's economy in 1998 continued its steady growth of the previous 15 years. Prime Minister Juncker attributed its success as follows: "As a small country we have the ability to make decisions quickly. As we say in Luxembourg: 'Schnellboot gegen Tank [the speedboat takes on the tank].' "

ANNE ROBY

▪ 1998

      Area: 2,586 sq km (999 sq mi)

      Population (1997 est.): 420,000

      Capital: Luxembourg

      Chief of state: Grand Duke Jean

      Head of government: Prime Minister Jean-Claude Juncker

      On July 1, 1997, Luxembourg assumed the rotating presidency of the European Union (EU) from The Netherlands for a six-month term. Jean-Claude Juncker, Luxembourg's prime minister since 1995, became president just two weeks after a failed EU summit in Amsterdam. His priorities were to resolve the unanswered questions left by the Dutch and to keep on track the drive toward the establishment of a single currency by January 1999, even as such larger countries as France and Germany struggled to meet the requirements for monetary union. (See European Union, above.)

      The domestic economy continued to grow, especially financial and banking services. The industrial sector was becoming more diversified, with increased movement into high-tech firms. On January 14 the Luxembourg-based television company Cie. Luxembourgeoise de Telediffusion (CLT) and the German media group Bertelsmann AG merged their broadcasting operations. The consolidated firm controlled 19 television stations and 23 radio stations in 10 European countries.

ANNE ROBY

▪ 1997

      Luxembourg is a landlocked constitutional monarchy in western Europe. Area: 2,586 sq km (999 sq mi). Pop. (1996 est.): 415,000. Cap.: Luxembourg. Monetary unit: Luxembourg franc, at par with the Belgian franc, with (Oct. 11, 1996) a free rate of Lux F 31.55 to U.S. $1 (Lux F 49.70 = £ 1 sterling). Grand duke, Jean; prime minister in 1996, Jean-Claude Juncker.

      Luxembourg's pioneering efforts in building broadcasting networks, satellite systems, and on-line services were met with increased competition in 1996, notably from Rupert Murdoch's News International, which owned 40% of British Sky Broadcasting. Compagnie Luxembourgeoise de Télédiffusion was one of Europe's biggest media companies, with interests in 10 television networks and 13 radio stations in eight countries. Luxembourg was also home to the world's second largest satellite company, Société Européenne des Satellites.

      In May the European Union announced that only Luxembourg and France were likely to meet the conditions required for adopting the EU single currency, scheduled for introduction in 1999. (ANNE ROBY)

▪ 1996

      Luxembourg is a landlocked constitutional monarchy in western Europe. Area: 2,586 sq km (999 sq mi). Pop. (1995 est.): 409,000. Cap.: Luxembourg. Monetary unit: Luxembourg franc, at par with the Belgian franc, with (Oct. 6, 1995) a free rate of Lux F 29.39 to U.S. $1 (Lux F 46.46 = £ 1 sterling). Grand duke, Jean; prime ministers in 1995, Jacques Santer and, from January 20, Jean-Claude Juncker.

      For this tiny country situated in the heart of Western Europe, 1995 was a banner year. Highlights included the appointment of its former prime minister, Jacques Santer, as president of the European Commission, its selection as European City of Culture 1995, and its growing prosperity as a financial services center.

      As the European City of Culture, Luxembourg served as host for a yearlong series of exhibitions, concerts, and entertainments for visitors. The celebrations were launched January 13 with a concert by the Symphonic Orchestra of Radio Television Luxembourg and a landmark exhibition featuring the works of such artists as Paul Cézanne, Paul Gauguin, Vincent van Gogh, Henri Matisse, Pierre-August Renoir, and Henri de Toulouse-Lautrec. The festival included three exhibitions of the work of the Luxembourg-born U.S. photographer Edward Steichen. An especially notable concert was Benjamin Britten's War Requiem on April 22 in the Diekirch Historical Museum, also known as the Museum of the Battle of the Bulge. The closing ceremonies for the cultural year took place on December 21.

      Luxembourg continued to build on its success as a leader in the financial services industry in banking. The country was also a leader in the mutual funds industry, with some $356 billion under Luxembourg management. Insurers had flocked to Luxembourg as well. According to insurance commissioner Victor Rod, the country offered an infrastructure of banking and fund-management skills, a strategic location, and highly skilled personnel. (ANNE ROBY)

▪ 1995

      Luxembourg is a landlocked constitutional monarchy in western Europe. Area: 2,586 sq km (999 sq mi). Pop. (1994 est.): 398,000. Cap.: Luxembourg. Monetary unit: Luxembourg franc, at par with the Belgian franc, with (Oct. 7, 1994) a free rate of Lux F 31.70 to U.S. $1 (Lux F 50.42 = £ 1 sterling). Grand duke, Jean; prime minister in 1994, Jacques Santer.

      Although 1994 began with Luxembourg focusing on domestic concerns, by year's end its prime minister had been chosen to lead the European Union, and so the nation found itself involved in European affairs. On July 15 Prime Minister Jacques Santer (see BIOGRAPHIES (Santer, Jacques )) was named to replace Jacques Delors as president of the European Commission on Jan. 1, 1995.

      Santer was reelected Luxembourg's prime minister in a general election on June 12. The two largest parties, the Christian Social People's Party with 21 seats and the Socialist Workers' Party with 17 seats, retained a comfortable majority in the 60-seat legislature. The two parties had governed in coalition since 1984.

      In elections to the European Parliament held on the same day, the coalition again maintained its majority. Of the six seats, the Christian Social won two, the Socialist Workers, two, the Democratic Party, one, and the Greens, one.

      Earlier in the year domestic affairs were dominated by demands that immigration be curbed. Concern centred on the lack of jobs and the clash of cultures. Foreigners in 1994 made up 30% of the total population and more than 50% of the nation's workforce. (ANNE ROBY)

▪ 1994

      Luxembourg is a landlocked constitutional monarchy in western Europe. Area: 2,586 sq km (999 sq mi). Pop. (1993 est.): 392,000. Cap.: Luxembourg. Monetary unit: Luxembourg franc, at par with the Belgian franc, with (Oct. 4, 1993) a free rate of Lux F 35.15 to U.S. $1 (Lux F 53.25 = £ 1 sterling). Grand duke, Jean; prime minister in 1993, Jacques Santer.

      The government announced in January 1993 a new regulation creating a fund to hold money confiscated from narcotics traffickers and money launderers. Because of a loophole in the previous money-laundering law, a Court of Appeals judge had ruled that $36 million in alleged cocaine profits had to be returned to its owners.

      Luxembourg came under pressure in April from its European Community partners to introduce a withholding tax on savings and investments. In particular, France, Belgium, and Germany, upset with the flight of capital to banks in Luxembourg, urged EC Tax Commissioner Christiane Scrivener to set a 15% minimum withholding tax, which would be levied on the interest on investments throughout the EC. Luxembourg expressed concern that introducing the withholding tax would lead to an easing of the strict banking-secrecy regulations that attract foreign capital to the country.

      EC ministers meeting in Luxembourg on June 1 approved a measure to limit the workweek to 48 hours. The directive also set standards for paid vacations, workday breaks, and time off. The 48-hour workweek limit would affect only Britain, Ireland, and Denmark, because the other EC nations already met that standard. Britain, which opposed the measure as economically harmful, challenged its legality in the European Court of Justice. (ANNE ROBY)

* * *

Introduction
officially  Grand Duchy of Luxembourg , French  Grand-Duché de Luxembourg , German  Grossherzogtum Luxemburg 
Luxembourg, flag of  country in northwestern Europe. It is one of the world's smallest countries. It is bordered by Belgium on the west and north, France on the south, and Germany on the northeast and east. Luxembourg has come under the control of many states and ruling houses in its long history, but it has been a separate, if not always autonomous, political unit since the 10th century. The ancient Saxon name of its capital city, Lucilinburhuc (Luxembourg) (“Little Fortress”), symbolized its strategic position as “the Gibraltar of the north,” astride a major military route linking Germanic and Frankish territories.

      Luxembourg is a point of contact between the Germanic- and Romance-language communities of Europe, and the grand duchy itself has three official languages: German, French, and Luxembourgian. The peoples of Luxembourg and their languages reflect the grand duchy's common interests and close historical relations with its neighbours. In the 20th century, Luxembourg became a founding member of several international economic organizations. Perhaps most importantly, the grand duchy was an original member of the Benelux Economic Union (1944), which linked its economic life with that of The Netherlands and of Belgium and would subsequently form the core of the European Community (EC).

The land

Relief and soils
 The northern third of Luxembourg, known as the Oesling (Ösling), comprises a corner of the Ardennes Mountains, which lie mainly in southern Belgium. It is a plateau that averages 1,500 feet (450 metres) in elevation and is composed of schists and sandstones. This forested highland region is incised by the deep valleys of a river network organized around the Sûre (or Sauer) River, which runs eastward through north-central Luxembourg before joining the Moselle (or Mosel) River on the border with Germany. The Oesling's forested hills and valleys support the ruins of numerous castles, which are a major attraction for the region's many tourists. The fertility of the relatively thin mountain soils of the region was greatly improved with the introduction in the 1890s of a basic-slag fertilizer, which is obtained as a by-product of the grand duchy's steel industry.

      The southern two-thirds of Luxembourg is known as the Bon Pays, or Gutland (French and German: “Good Land”). This region has a more varied topography and an average elevation of 800 feet. The Bon Pays is much more densely populated than the Oesling and contains the capital city, Luxembourg, as well as smaller industrial cities such as Esch-sur-Alzette. In the centre of the Bon Pays, the valley of the northward-flowing Alzette River forms an axis around which the nation's economic life is organized. Luxembourg city lies along the Alzette, which joins the Sûre farther north.

      In the east-central part of the Bon Pays lies a great beech forest, the Müllerthal, as well as a sandstone area featuring an attractive ruiniform topography. The country's eastern border with Germany is formed (successively from north to south) by the Our, Sûre, and Moselle rivers. The slopes of the Moselle River valley, carved up in chalk and calcareous clay, are covered with vineyards and receive a substantial amount of sunshine, which has earned the area the name of “Little Riviera.” Besides vineyards, the fertile soils of the Moselle (Moselle River) and lower Sûre valleys also support rich pasturelands. Luxembourg's former iron mines are located in the extreme southwest, along the duchy's border with France.

Climate
      Luxembourg has a mild climate, with considerable precipitation. The north is slightly colder and more humid than the south. The mean temperatures in Luxembourg city range from 33° F (0.7° C) in January to 63° F (17° C) in July, but in the Oesling both extremes are slightly lower. The Oesling receives more precipitation than the Bon Pays, but the greatest amount, about 40 inches (1,000 millimetres), and the least, about 27 inches, fall in the southwest and southeast, respectively. The sheltered valley of the Moselle River benefits from a gentler and sunnier climate than does the rest of the duchy.

Settlement patterns
 Northern Luxembourg is sparsely populated compared to the heavily urbanized and industrialized south. The north's rural population is clustered in villages of thick-set stone houses with slate roofs. The urban network in the south is dominated by the capital city, Luxembourg, which rises in tiers, with the upper (and older) section of the city separated from the lower-lying suburbs by the gorges of the Alzette and Petrusse rivers. A new quarter housing many European organizations nestles in a picturesque site carved into the river valley's sandstone cliffs. The second-largest city in Luxembourg, Esch-sur-Alzette, lies in the extreme southwest and is a traditional iron-making centre. Its growth, like that of the neighbouring iron and steel centres of Pétange, Differdange, and Dudelange, has slowed since the shrinkage of those industries in western Europe in the late 20th century. The remainder of the nation's population lives in towns and villages of relatively small size. Many of Luxembourg's villages date from ancient Celtic and Roman times or originated in Germanic and Frankish villages after about AD 400. In addition, many medieval castle villages continue to thrive, centuries after the castles themselves fell into ruin.

The people
       Luxembourg has been one of the historic crossroads of Europe, and myriad peoples have left their bloodlines as well as their cultural imprints on the grand duchy. The Celts, the Belgic peoples known as the Treveri, the Ligurians and Romans from Italy, and especially the Franks were most influential. The dialect spoken by Luxembourg's native inhabitants is Luxembourgian, or Letzeburgesch, a Moselle-Franconian dialect of German that has been enriched by many French words and phrases. Most Luxembourgers speak French (used for most official purposes) and German (the lingua franca). There is a strong sense of national identity among Luxembourgers despite the prevalence of these foreign influences. Almost all of Luxembourg's native citizens are Roman Catholic, with a small number of Protestants, mainly Lutherans, and Jews.

      Luxembourg has a higher proportion of foreigners living within its borders than does any other European country. This is chiefly the result of an extremely low birthrate among native Luxembourgers, which has led to a chronic labour shortage. Fully one-quarter of the total population is of foreign birth and consists mainly of Portuguese, Italians, and other southern Europeans, along with French, Belgians, and Germans. Among the foreign workers are many in the iron and steel industry, and numerous others work in foreign firms and international organizations located in the capital.

      The 20th century has also witnessed a continual internal migration away from the countryside to urban areas, and the growth of Luxembourg's service sector at the expense of heavy industry has only accelerated this trend. Luxembourg city in particular continues to attract migrants from the rest of the country because of its vibrant banking and finance sector. The increasing concentration of the population in the southwest has led the government to try to locate some industries in rural areas. About two-thirds of Luxembourg's work force is engaged in trade, government, and other service occupations, while almost one-third of the work force is employed in industry and construction, and the rest in agriculture.

The economy
      Luxembourg's economy is notable for its close connections with the rest of Europe, since Luxembourg itself is too small to create a self-sustaining internal market. Luxembourg's prosperity was originally based on the iron and steel industry, which in the 1960s represented as much as 80 percent of the total value of exports. By the late 20th century, however, the nation's economic vigour stemmed chiefly from its involvement in international banking and financial services and in such noncommercial activities as hosting intra-European political activities. The result of this adaptability and cosmopolitanism is a very high standard of living; the Luxembourgers rank in the world second only to the Swiss in their standard of living and their per capita income.

Resources
      Luxembourg's natural resources are quite modest. Its agriculture is not particularly prosperous, and its once-copious iron ore deposits had been exhausted by the 1980s. With the exception of water and timber, there are no energy resources. Indeed, Luxembourg has almost nothing that predisposes it to agricultural or industrial development. The roots of its economic growth lie in its use of capital and in the adaptability and ingenuity of its work force rather than in natural resources.

Industry
      The production and export of iron (iron processing) and steel have long played major roles in Luxembourg's economy. Steel production was originally based on exploitation of the iron ore deposits extending from Lorraine into the southwestern corner of the grand duchy. This ore has a high phosphorus content, however, and it was not until the introduction of the basic Bessemer process in 1879 that the ore could be used for making steel. Thereafter Luxembourg's metallurgical industries grew and flourished. During the 1970s, however, the worldwide demand for steel slumped, causing the steel industry's portion of Luxembourg's gross domestic product to fall. In response to this crisis, the steel industry was restructured and merged into a single group called ARBED (Aciéries Réunies de Burbach-Eich-Dudelange (ARBED SA)), and further measures aimed at increasing efficiency enabled Luxembourg's steelmakers to maintain their profitability. With the overall decline of steel production, however, Luxembourg's economy has become more dependent on factories owned by American-based and other multinational companies operating in the country. These factories primarily produce motor-vehicle tires, chemicals, and fabricated metals.

      Luxembourg had become an international financial centre and a home to more than 160 banks by the late 20th century. It owes this position to a number of factors, perhaps chief of which is the government's own farsighted policies. In 1929 the government began to encourage the registering in Luxembourg of holding companies; these large corporations can control a number of subsidiary companies but are heavily taxed in many countries of the world. The liberal tax climate produced by the new policy led many industrial and financial corporations to maintain offices, often as their European headquarters, in Luxembourg city. The main offices of the European Investment Bank are there, as are the representatives of many banking institutions from around the world who keep in contact with the European Community (EC). Luxembourg city is also one of the capitals of the EC and as such is home to the European Court of Justice and several major EC administrative offices.

Agriculture
      The agricultural resources of Luxembourg are quite modest. With the exception of livestock products, surpluses are scarce, and marginal soils in many parts of the country hinder abundant harvests. Most farming is mixed and includes both animal raising and gardening. Livestock and their by-products account for the bulk of agricultural production, with cattle raising having gained in importance at the expense of pig and sheep raising. Wheat, barley, and other cereal grains are the next most important products, followed by root vegetables. More than three-quarters of the country's farms are smaller than 200 acres (50 hectares). The vineyards along the Moselle River produce some excellent wines.

International trade
      Luxembourg's overall balance of payments is strongly positive, mostly because of the country's thriving financial sector. Most of the grand duchy's merchandise trade takes place with EC countries, and especially its three neighbours—Germany, Belgium, and France, which together receive about 60 percent of Luxembourg's exports and provide about 80 percent of its imports.

Energy
      Luxembourg meets most of its energy needs with imports. Its only domestic source of power is the hydroelectricity obtained from several dams on its rivers.

Transportation
      Luxembourg's internal road system is not extensive but is well maintained, and several highways link the country with its neighbours. A port at Mertert on the canalized Moselle River connects the grand duchy with the Rhine waterway system and provides it with an avenue for the international movement of goods.

      The government has operated the nation's railroads since World War II. They are modern, electrified, and mostly double-tracked. A major portion of international transportation to and from Luxembourg is by train, and the country is connected with its neighbours by a large number of lines. Findel Airport outside Luxembourg city has become a major European air terminal served by the lines of many countries. Luxair is the national airline.

Communications
      Luxembourg's advanced telecommunications system provides it with close links both to EC countries and to other financial partners around the world, including Japan and the United States.

Administration and social conditions

Government
      The grand duchy is a constitutional monarchy with hereditary succession. Executive power authority lies with the grand duke, who appoints the prime minister. The powers of the grand duke are primarily formal, however. Actual executive power lies with the prime minister and his ministerial council, or Cabinet, who are responsible to the Chamber of Deputies. The members of this legislative assembly are elected by popular vote to five-year terms. Voting by all adult citizens, begun in 1919, is compulsory. Legislative elections have usually given rise to coalition governments formed alternatively by two of the three major parties: the Christian Social Party, the Socialist Workers' Party, and the Democratic Party. In addition, a Council of State named by the grand duke functions as an advisory body. It is consulted on all draft legislation, advises the grand duke on administrative affairs, and serves as a supreme court in case of administrative disputes.

      There are also three advisory bodies that are consulted before the passage of legislation affecting their particular area of the national life. The first of these consists of six confederations, three of which represent employers (commerce, guilds, and farmers) and three of which represent labour (workers, private employees, and civil servants). The second advisory group, the Social and Economic Council, has become a major committee for the examination of all projects. The third, the Immigration Council, advises the government on problems involving housing and the political rights of immigrants.

      Justice is in the hands of magistrates appointed for life by the grand duke, the final appeal lying with the Superior Court of Justice. In the criminal court of assizes, six magistrates sit as jury as well as judge. Luxembourg is a member of the North Atlantic Treaty Organization (NATO) and has a small volunteer army. There is also a small paramilitary gendarmerie.

      Luxembourg is divided administratively into three districts, each of which is headed by a commissioner appointed by the central government. Each district is in turn divided into cantons and subdivided into communes, or municipalities. Public works, health, and education are among the responsibilities of the communes, each of which is governed by an elected council and a mayor. These bodies also maintain liaison with the central government and act as its local agents.

Health and welfare
      After World War I a broad system of social security and health services was introduced in Luxembourg to ensure maximum welfare protection to each citizen. Sickness benefits, in which patients pay only a small part of medical costs, as well as birth, family, and unemployment payments, are included in the plans. Housing conditions are generally comparable to those found in other western European countries. There has been some difficulty, however, in assimilating the many thousands of foreign workers and their families.

Education
      Education is compulsory from age 6 to 15. The educational system offers a mix of primary and secondary schools run by state and local governments and by religious institutions. Considerable emphasis is laid on language studies. Instruction is initially given in German, and French is added in the second year. French completely replaces German in the classroom at the secondary level. There are no four-year universities in the grand duchy, so many young Luxembourgers obtain their higher education abroad. Luxembourg city does, however, have a campus that offers first-year university studies.

Cultural life
      The major cultural institution of Luxembourg is the Grand Ducal Institute, which has sections devoted to history, science, medicine, languages and folklore, arts and literature, and moral and political sciences. It functions as an active promoter of the arts, humanities, and general culture rather than as a conservator. The National Museum of History and Art has collections on the fine and industrial arts and on the history of Luxembourg. There is considerable public use of the National Library, the National Archives, and the Music Conservatory of the City of Luxembourg. The grand duchy also maintains cultural agreements with several European and other nations that provide it with the finest in the musical and theatrical arts. The Grand Orchestra of Radiotelevision Luxembourg is considered outstanding. There is an extensive market in Luxembourg city for works of painting and sculpture, both traditional and modern. The grand duchy's architectural heritage extends through practically the entire span of Europe's recorded history, from ancient Gallo-Roman villas to medieval castles, Gothic and Baroque churches, and contemporary buildings.

      A small publishing industry exists, printing literary works in French, German, and Luxembourgian. The grand duchy's newspapers express diverse political points of view—conservative, liberal, socialist, and communist. Luxembourg's influence is felt far beyond its borders through the medium of Radiotelevision Luxembourg (RTL), a privately owned broadcasting company that transmits radio programs in five languages and television programs in two (French and German). RTL has a total European audience numbering as many as eight million persons. The government operates all postal and telegraph services in Luxembourg and has some control in the corporation that runs RTL.

Victor J.P. Biel Jean-Pierre Erpelding Jean Marie Gehring

History

Ancient and medieval periods
      The earliest human remains found in present-day Luxembourg date from about 5140 BC, but little is known about the people who first populated the area. Two Belgic tribes, the Treveri and Mediomatrici, inhabited the country from about 450 BC until the Roman conquest of 53 BC. The occupation of the country by the Franks (Frank) in the 5th century AD marked the beginning of the Middle Ages in the locality. St. Willibrord (Willibrord, Saint) played a very important role in the area's Christianization in the late 7th century. He founded the Benedictine abbey of Echternach, which became an important cultural centre for the region.

      The area successively formed part of the Frankish kingdom of Austrasia, of the Holy Roman Empire under Charlemagne and Louis I (the Pious), and then of the kingdom of Lotharingia. Luxembourg became an independent entity in 963, when Siegfried, Count de Ardennes, exchanged his lands for a small but strategically placed Roman castle lying along the Alzette River. This castle became the cradle of Luxembourg, whose name is itself derived from that of the castle, Lucilinburhuc (“Little Fortress”). Siegfried's successors enlarged their possessions by conquests, treaties, marriages, and inheritances. About 1060 Conrad, a descendant of Siegfried, became the first to take the title of count of Luxembourg. Conrad's great-granddaughter, Countess Ermesinde, was a notable ruler whose great-grandson, Henry IV, became Holy Roman emperor as Henry VII in 1308. This Luxembourg dynasty was continued on the imperial throne in the persons of Charles IV, Wenceslas, and Sigismund. In 1354 the emperor Charles IV made the county a duchy. In 1443 Elizabeth of Görlitz, duchess of Luxembourg and niece of the Holy Roman emperor Sigismund, was forced to cede the duchy to Philip III (the Good), duke of Burgundy.

Habsburg (Habsburg, House of) and French domination
      Along with the rest of the Burgundian inheritance, the duchy of Luxembourg passed to the Habsburgs in 1477. The division of the Habsburg territories in 1555–56 following Emperor Charles V's abdication put the duchy in the possession of the Spanish Habsburgs. In the revolt of the Low Countries against Philip II of Spain, Luxembourg took no part; it was to remain with what is now Belgium as part of the Spanish Netherlands. (For more specific information about the period, see The Netherlands (Netherlands, The).)

      The duchy was able to remain aloof from the Thirty Years' War (1618–48) for a time, but in 1635, when France became involved, a period of disaster began in Luxembourg, which was wracked by war, famine, and epidemics. Moreover, the war did not end for Luxembourg with the Peace of Westphalia in 1648, but only with the Treaty of the Pyrenees in 1659. In 1679 France under Louis XIV began to conquer parts of the duchy, and in 1684 the conquest was completed with the capture of Luxembourg city. France restored Luxembourg to Spain in 1697, however, under the terms of the Treaties of Rijswijk. At the conclusion of the War of the Spanish Succession, by the treaties of Utrecht and Rastatt (1713–14), Luxembourg (along with Belgium) passed from the Spanish to the Austrian Habsburgs.

      In 1795, six years after the beginning of the French Revolution, Luxembourg came under the rule of the French again. The old duchy was divided among three départements, the constitution of the Directory was imposed, and a modern state bureaucracy was introduced. The Luxembourg peasantry was hostile toward the French government's anticlerical measures, however, and the introduction of compulsory military service in France in 1798 provoked a rebellion (the Klëppelkrieg) in Luxembourg that was brutally suppressed.

Personal union with The Netherlands
      French domination ended with the fall of Napoleon in 1814, and the Allied powers decided the future of Luxembourg at the Congress of Vienna in 1815. The Congress raised Luxembourg to the status of a grand duchy and gave it to William I, prince of Orange-Nassau and king of the Netherlands. William obtained a Luxembourg that was considerably diminished, since those of its districts lying east of the Our, Sûre, and Moselle rivers had been ceded to Prussia. The status of the grand duchy during this period was complex: Luxembourg had the legal position of an independent state and was united with The Netherlands only because it was a personal possession of William I. But Luxembourg was also included within the German Confederation, and a Prussian military garrison was housed in the capital city.

      The standard of living of Luxembourg's citizens deteriorated during this period. Under Austrian rule, and especially from 1735 on, the duchy had experienced an economic expansion. From 1816–17 on, however, William I ignored the duchy's sovereignty, treating Luxembourg as a conquered country and subjecting it to heavy taxes. Consequently, it was not surprising that Luxembourg supported the Belgian revolution against William in 1830, and, in October of that year, the Belgian government announced that the grand duchy was a part of Belgium, while William still claimed the duchy as his own. In 1831 the Great Powers (France, Britain, Prussia, Russia, and Austria) decided that Luxembourg had to remain in William I's possession and form part of the German Confederation. Moreover, the Great Powers allotted the French-speaking part of the duchy to Belgium (in which it became a province called Luxembourg), while William I was allowed to retain the Luxembourgian-speaking part. Belgium accepted this arrangement, but William I rejected it, only to subsequently accede to the arrangement in 1839. From that year until 1867, the duchy was administered autonomously from The Netherlands.

Independent Luxembourg
      William I negotiated a customs union for Luxembourg with Prussia, and his successor, William II, ratified this treaty in 1842. Against its own will, Luxembourg had thus entered into the Prussian-led Zollverein, or Customs Union, but the grand duchy soon realized the advantages of this economic union. Luxembourg subsequently developed from an agricultural country into an industrial one. Its road network was extended and improved, and two railway companies were begun that formed the basis for the national railway company founded in 1946.

      The restricted constitution that William II enacted for Luxembourg in 1841 did not meet the political expectations of its citizens. The Revolution of 1848 in Paris had its influence on the grand duchy, and William II that year enacted a new and more liberal constitution, which was in turn replaced by another constitution in 1856. In 1866 the German Confederation was dissolved, and Luxembourg became an entirely sovereign nation, though the Prussian garrison remained in the capital. Napoleon III of France then tried to purchase the grand duchy from William III. The two rulers had already agreed on the sum of five million florins when William III backed out because the Prussian chancellor, Otto von Bismarck, disapproved of the sale. The Great Powers soon came to a compromise (London; May 11, 1867): Prussia had to withdraw its garrison from the capital, the fort would be dismantled, and Luxembourg would become an independent nation. The grand duchy's perpetual neutrality was guaranteed by the Great Powers, and its sovereignty was vested in the house of Nassau.

      On the death of William III of The Netherlands in 1890 without a male heir, the grand duchy passed to Adolf, duke of Nassau (d. 1905), who was succeeded by his son William (d. 1912). Neither Adolf nor William interfered much in Luxembourg's government, but William's daughter, the grand duchess Marie Adélaïde, was more assertive and eventually became highly unpopular with the people. In 1914 the neutrality of Luxembourg was violated by Germany, which occupied the grand duchy until the Armistice of 1918. During the war, Marie Adélaïde had tolerated the illegal German occupation, for which she was criticized by the Allied powers after the liberation. Marie Adélaïde was forced to abdicate in favour of her sister Charlotte in 1919. In a referendum a few months later, the public voted overwhelmingly against the establishment of a republic and in favour of retaining Charlotte as grand duchess.

      In December 1918 the Allied powers had forced Luxembourg to put an end to its customs union with Germany. For the grand duchy this meant the loss of its best customer (for cast iron and steel) as well as its main supplier of coal. Luxembourg urgently needed a new economic partner, and, though the people preferred an economic union with France, the grand duchy was forced to negotiate with Belgium, since France declared itself uninterested in such a union. The Belgium-Luxembourg Economic Union (BLEU) was established in 1921 and provided for a customs and monetary union between the two countries. The economic climate in Luxembourg remained rather dreary during the interwar period though.

      In May 1940 the German army invaded and occupied Luxembourg for the second time; however, this time the government refused to collaborate and, together with the grand duchess, went into exile. Luxembourg was placed under German rule, and the French language was banned.

      After Luxembourg's liberation in September 1944, it took part in the new international organizations being formed by the victorious Allies, including the United Nations. Luxembourg also joined the new Benelux Economic Union (1944) formed between Belgium, The Netherlands, and itself. By taking part in the Brussels Treaty of 1948 and in the formation of NATO in 1949, Luxembourg abandoned its perpetual neutrality. The country improved its economic situation by obtaining a sound position within the European Coal and Steel Community (1952) and within the European Economic Community (1957; later the European Community). Prince Jean, Charlotte's son, was installed as lieutenant-représentant of Charlotte in 1961, and he inherited the throne in 1964 upon his mother's abdication.

Véronique Lambert
      When the European Union (EU) was created in 1993, Luxembourg assumed an active role. EU administrative offices were sited in the country, and Luxembourgers such as prime ministers Jacques Santer and Jean-Claude Juncker played especially prominent roles in the EU. At the time the EU was formed, non-citizens made up more than half of the workforce of Luxembourg. By the end of the 20th century, the country had gained a reputation as a centre for private banking and financial services (particularly mutual fund investments), media and satellite broadcasting, and electronic commerce. The economy remained robust through the turn of the century, when Luxembourg claimed the world's highest standard of living (highest gross domestic product per capita). In 2000, at age 79, Grand Duke Jean formally abdicated as chief of state and was replaced by his son, Crown Prince Henri.

Ed.

Additional Reading
An introduction to the country is provided by P. Margue et al., Luxembourg (1984), in French, a well-illustrated work covering history, politics, ethnography, language and literature, natural history, and economy. Studies of the geography and economy of Luxembourg include J.M. Gehring, Le Luxembourg: un espace ouvert de l'Europe rhénane (1977); Paul Weber, Histoire de l'économie luxembourgeoise (1950); and Raymond Kirsch, La Croissance de l'économie luxembourgeoise (1971). Visual presentations of the land and of data on the country may be found in Guy Schmit and Bernd Wiese, Luxemburg in Karte und Luftbild (1980), maps and aerial photos with text in German and French; and Ministère de l'Éducation Nationale, Atlas du Luxembourg (1971). Works focusing on Luxembourg's history include N. Van Werveke, Kulturgeschichte des Luxemburger Landes, 2 vol. in 1 (1923–26); Charles J.P.A. Herchen, History of the Grand Duchy of Luxemburg (1950; originally published in French, 5th rev. ed. by N. Margue and J. Meyers, 1947); E. Donckel, Die Kirche in Luxemburg von den Anfängen bis zur Gegenwart (1950); Paul Weber, Histoire du Grand-Duché de Luxembourg, 4th ed. (1961); Manuel d'histoire luxembourgeoise, 4 vol. (1973–77); James Newcomer, The Grand Duchy of Luxembourg: The Evolution of Nationhood, 963 AD to 1983 (1984); and Gilbert Trausch, Le Luxembourg: emergence d'un état et d'une nation (1989). For further resources see Carlo Hury and Jules Christophory (comps.), Luxembourg (1981), a bibliography.Jean Marie Gehring Véronique Lambert

also called  Letzeburg,  
 
city and capital of Luxembourg, in the south-central part of the country. Luxembourg city is situated on a sandstone plateau into which the Alzette River and its tributary, the Petrusse, have cut deep, winding ravines. Within a loop of the Alzette, a rocky promontory called the Bock (Bouc) forms a natural defensive position where the Romans (ancient Rome) and later the Franks (Frank) built a fort, around which the medieval town developed. The purchase of this castle in AD 963 by Siegfried, Count of Ardennes, marked the beginning of Luxembourg as an independent entity. The castle's old name, Lucilinburhuc (“Little Fortress”), is the origin of the name Luxembourg.

 The old town consists of Luxembourg Castle's surviving fortifications, the Grand Ducal Palace, Notre Dame Cathedral, and other historic buildings. The city eventually spread westward, and the suburbs of Grund, Clausen, and Pfaffenthal developed in lower-lying sections across the Alzette from the old town. These sections are linked by several bridges.

      Over a 400-year period, Luxembourg Castle (Château de Luxembourg) was repeatedly attacked and rebuilt by the Spaniards, Austrians, French, and Dutch, successively, to become the strongest fortress in Europe after Gibraltar. One such reinforcement was undertaken by the French military engineer Sébastien Le Prestre de Vauban (Vauban, Sébastien Le Prestre de), who redesigned the city's defensive fortifications after having orchestrated its siege in 1684 in the service of Louis XIV.

 From after the Congress of Vienna (Vienna, Congress of) (1815) to 1866, the fortress was garrisoned by the Prussians as a bulwark of the German Confederation. With the Treaty of London, in 1867, Luxembourg was declared neutral, and the fortress, containing 15 miles (24 km) of casements, three battlements with 24 forts, and an extensive (10-acre [4-hectare]) area of military barracks, was largely dismantled, an operation that took 16 years. Today visitors can tour the remaining 7 miles (11 km) of casements or view the modern city below from the Chemin de la Corniche, a promontory built atop the old town wall.

 The Grand Ducal Palace (Palais Grand-Ducal) is home to the royal family, heirs of William I (1772–1843), king of The Netherlands and grand duke of Luxembourg (1815–40). The palace dates from 1572, and later additions were made in 1895. After renovations were completed in the 1990s, portions of the palace were opened to the public.

      Notre Dame Cathedral (Cathédrale Notre-Dame), a Gothic-style church built by Jesuits in 1613, contains the tomb of John the Blind (John), king of Bohemia and count of Luxembourg from 1310 to 1346. Several members of the royal family and noted bishops are buried in the crypt.

      The heart of the old town is the Fish Market (Marché-aux-Poissons), around which stand several 17th- and 18th-century buildings, including the mansion housing the Luxembourg National Museum (National Museum of History and Art). Um Bock, a 13th-century building and the city's oldest, is also located at the Fish Market. Among the city's other cultural institutions are the Jean-Pierre Pescatore Museum (1966) of fine arts and the History Museum of the City of Luxembourg (1996). At the town of Hamm 4 miles (6 km) to the east is a World War II military cemetery with the graves of more than 5,000 U.S. soldiers, including those of Brigadier General Edward Betts and General George S. Patton, Jr. (Patton, George Smith)

 Luxembourg has long been a major road and railway hub. In the 20th century the city became a thriving financial centre owing to banking laws that keep investors' identities confidential and allow the accounts of foreign nationals to earn interest tax-free. Luxembourg is the seat of the European Investment Bank, the European Court of Justice, and several other administrative offices of the European Union. In 1994 the old town was added to UNESCO's World Heritage List (World Heritage site). Pop. (1991) 75,377; (1997 est.) 78,300.
 

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Universalium. 2010.

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