Grand Duchy of Luxembourg

Großherzogtum Luxemburg
Grand-Duché de Luxembourg
Groussherzogtum Lëtzebuerg
Grand Duchy of Luxembourg

Motto
Mir wëlle bleiwe wat mir sinn

Anthem
Ons Heemecht

Occupation:
German Empire (1914-1918)

Occupation:
Third Reich (1940-1945)

Capital

Luxembourg

Government

Constitutional monarchy and parliamentary democracy

Grand Duke

- From 2000

Henri

Prime minister

- From 1995

Jean-Claude Juncker

Legislature

Chamber of Deputies

History

- November 23, 1890

End of personal union with the Netherlands

EU accession

March 25, 1957

Area

2,586.4 km²

Population

- 2010

502,202

Density

194.1/km²

GDP

2010 (PPP)

- Total

US$ 40.3 billion

- Per capita

US$ 80,304

Currency

Euro

NUTS Region

LU0

Luxembourg

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The Grand Duchy of Luxembourg is a constitutional monarchy and a parliamentary democracy in Europe. It is a member of the European Union.

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.^[1]

Economy

This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured 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, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a tax haven because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 60% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted and 3.4% in 2009, but rebounded 2.6% in 2010. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks third in the world, after Liechtenstein and Qatar, and is the highest in the EU. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009, however, the deficit was cut below 3% in 2010.^[2]