U.S. Department of State
Background Notes: Luxembourg, April 1998
Official Name: Grand Duchy of Luxembourg
Area: 2,586 sq. km. (1,034 sq. mi.; about the size of Rhode
Cities: capital -- Luxembourg (pop. 75,800). Other cities --
Esch/Alzette, Dudelange, Differdange.
Terrain: Continuation of Belgian Ardennes in the north, heavily
forested and slightly mountainous; extension of French Lorraine
plateau in the south, with open, rolling countryside.
Climate: Cool, temperate, rainy; like the U.S. Pacific Northwest.
Nationality: Noun: -- Luxembourger(s). Adjective -- Luxembourg.
Population (1996): 412,800.
Annual growth rate: Less than 1%.
Ethnic groups: Celtic base with French and German blend; also
guest-workers from Portugal, Italy, and other European countries.
Religion: Roman Catholic -- 97%; Protestant and Jewish -- 3%.
Languages: Luxembourgish, French, German.
Education: Years compulsory -- 9. Attendance -- 100% Literacy --
Health: Life expectancy -- average 78 years; males 75 years,
females 82 years. Infant mortality rate -- 5.5/1000.
Work force (1995): 213,100 -- agriculture 3%, industry and
commerce 65%, business services 17%, government 14%.
Unemployment (1996): 3.3%.
Type: Constitutional monarchy.
Branches: Executive -- Grand Duke (chief of state). Legislative -
- bicameral parliament (Chamber of Deputies and Council of
State). Judicial -- superior court.
Political parties: Christian Socialist Party (CSV), Socialist
Party (LSAP), Democratic (liberal) Party (DP), Green Alternative
Party (GAP), Party for Pension Rights (ADR).
Suffrage: Universal over age of 18.
Government budget (1996): $4.5 billion.
National holiday: June 23.
Flag: Three horizontal stripes -- red, white, and sky blue.
GDP (1996): $16 billion.
Annual growth rate (1995-1996): 2.5%.
Per capita income (1995): $28,500.
Inflation rate (1996): 1.5%.
Natural resources: Iron ore.
Agriculture (1% of GNP): Products -- dairy products, corn, wine.
Arable land: 42%.
Industry (28% of GDP): chemicals, steel.
Trade (1996): Exports -- $6.5 billion: steel, plastics, rubber
and processed wood products.
Major markets -- Germany, Belgium, France, and Asia. Imports --
$8.3 billion; minerals (including iron ore, coal, and petroleum
products), mechanical and electrical equipment, transportation
equipment, scrap metal. Major suppliers: Other EU countries.
People and History
The language of Luxembourg is Luxembourgish, a blend of old
German and Frankish elements. The official language of the civil
service, law, and parliament is French, although criminal and
legal debates are conducted partly in Luxembourgish. German is
the primary language of the press. French and German are taught
in the schools, with German spoken mainly at the primary level
and French at the secondary level.
In 1815, after 400 years of domination by various European
nations, Luxembourg was made a grand duchy by the Congress of
Vienna. It was granted political autonomy in 1838 under King
William I of the Netherlands, who was also the Grand Duke of
Luxembourg. The country considers 1835 to be its year of
independence. In 1867, Luxembourg was recognized as independent
and guaranteed perpetual neutrality. After being occupied by
Germany in both world wars, however, Luxembourg abandoned
neutrality and became a charter member of the North Atlantic
Treaty Organization (NATO) in 1949.
The present sovereign, Grand Duke Jean, succeeded his mother,
Grand Duchess Charlotte, on November 12, 1964. Grand Duke Jean's
eldest son, Prince Henry, heir to the throne of Luxembourg, was
appointed "Lieutenant Representant" (Deputy Grand Duke) on March
4, 1998. During an unspecified transition period, Henri will
gradually take over the Grand Duke's constitutional duties.
Luxembourg has a parliamentary form of government with a
constitutional monarchy by inheritance.
Under the constitution of 1868, as amended, executive power is
exercised by the Grand Duke and the Council of Government
(cabinet), which consists of a Prime Minister and several other
ministers. The Prime Minister is the leader of the political
party or coalition of parties having the most seats in
Legislative power is vested in the Chamber of Deputies, elected
directly to 5-year terms. A second body, the Council of State,
composed of representatives appointed by the Grand Duke, advises
the Chamber of Deputies in drafting legislation.
Luxembourg law is a composite of local practice, legal tradition,
and French, Belgian, and German systems. The apex of the judicial
system is the superior court, whose judges are appointed by the
Principal Government Officials
Chief of State -- the Grand Duke Jean of Luxembourg
Lieutenant Representant (Deputy Grand Duke) -- Prince Henri of
Prime Minister, Minister of State, Minister of Finance, Minister
of Labor and Employment -- Jean Claude Juncker, (CSV)
Vice Prime Minister, Minister of Foreign Affairs, External Trade
and Development -- Jacques F. Poos (LSAP)
Ambassador to the United States -- Alphonse Berns
Ambassador to the United Nations -- Jean-Louis Wolzfeld
Luxembourg maintains an embassy in the United States at 2200
Massachusetts Avenue, NW, Washington, DC 20006 (tel. 202-265-
4171). Consulates or honorary consulates are located in many U.S.
Since the end of World War II, the Christian Social Party (CSV)
has usually been the dominant partner in governing coalitions.
The Roman Catholic-oriented CSV resembles Christian Democratic
Parties in other West European countries and enjoys broad popular
support. It strongly supports NATO.
The Socialist Party (LSAP) is philosophically similar to the
German Social Democratic Party. Its political strength is
strongest among industrial workers who favor strong social
legislation. The LSAP is pro-NATO.
The Democratic (liberal) Party (DP) is a center party, drawing
support from the professions, merchants, and urban middle class.
Like other West European liberal parties, it advocates both
social legislation and minimum government involvement in the
economy. It is also strongly pro-NATO. In the opposition since
1984, the DP had been a partner in the three previous consecutive
The Communist Party (PCL), which received 10-18% of the votes in
national elections from World War II to the 1960s, won only two
seats in the 1984 elections, one in 1989, and none in 1994. Its
small remaining support lies in the "steel belt" of the
The Green Party has received growing support since it was
officially formed in 1983. It opposes both nuclear weapons and
nuclear power and supports environmental and ecological
preservation measures. This party generally opposes Luxembourg's
military policies, including its membership in NATO.
In parliamentary elections in June 1994, the CSV won 21 seats,
the LSAP 17 seats, the DP 12 seats, the ADR ( a single-issue
party focused on pension rights) 5 seats, and the "Greens" 5
seats. In 1994, the CSV under its lead candidate, Jacques
Santer, formed a government with the LSAP, whose lead candidate,
Jacques Poos, became Vice Prime Minister and Foreign Minister.
After Jacques Santer's appointment as president of the European
Commission in 1995, Minister of Labor and Minister of Finance
Jean-Claude Juncker became Prime Minister. The DP, the Greens,
and the ADR formed the opposition.
National elections are held at least every 5 years. The next
election is scheduled for July 1999. Local elections, held every
6 years, are next scheduled for 2001.
Although Luxembourg in tourist literature is aptly called the
"Green Heart of Europe," its pastoral land coexists with a highly
industrialized and export-intensive economy. Luxembourg enjoys a
degree of economic prosperity almost unique among industrialized
In 1876, English metallurgist Sidney Thomas invented a refining
process that led to the development of the steel industry in
Luxembourg and the founding of the Arbed company in 1911 -- now
the second-largest steel producer in Europe. The iron and steel
industry, located along the French border, is the most important
single sector of the economy. Steel accounts for 29% of all
exports (excluding services), 1.8% of GDP, 22% of industrial
employment, and 3.9% of the work force.
The restructuring of the industry and increasing government
ownership in Arbed (31%) began as early as 1974. As a result of
timely modernization of facilities, cutbacks in production and
government assumption of portions of Arbed's debt, and recent
cyclical recovery of the international demand for steel, the
company is again profitable. Its productivity is among the
highest in the world. U.S. markets account for about 6% of
Arbed's output. The company specializes in production of large
architectural steel beams and specialized value-added products.
There has been, however, a relative decline in the steel sector,
offset by Luxembourg's emergence as a financial center. Banking
is especially important. In 1996, there were 222 banks in
Luxembourg, with 21,000 employees. Political stability, good
communications, easy access to other European centers, skilled
multilingual staff, and a tradition of banking secrecy have all
contributed to the growth of the financial sector. Germany
accounts for the largest-single grouping of banks, with
Scandinavian, Japanese, and major U.S. banks also heavily
represented. Total assets exceeded $200 billion at the end of
1996, of which some 81% was denominated in foreign currencies,
primarily U.S. dollars and German marks. More than 9,000 holding
companies are established in Luxembourg. The European Investment
Bank -- the financial institution of the European Union -- is
also located there.
Government policies promote the development of Luxembourg as an
audiovisual and communications center. Radio-Television-
Luxembourg is Europe's premier private radio and television
broadcaster. The government-backed Luxembourg satellite company
"Societe Europeenne des Satellites" (SES) was created in 1986 to
install and operate a satellite telecommunications system for
transmission of television programs throughout Europe. The first
SES "ASTRA" satellite, a 16-channel RCA 4000, was launched by
Ariane Rocket in December 1988. SES presently operates five
satellites with two more to be launched before the year 2000.
Luxembourg offers a favorable climate to foreign investment.
Successive governments have effectively attracted new investment
in medium, light, and high-tech industry. Incentives cover
taxes, construction, and plant equipment. U.S. firms are among
the most prominent foreign investors, producing tires (Goodyear),
chemicals (Dupont), glass (Guardian Industries), and a wide range
of industrial equipment. The current value of U.S. direct
investment is almost $1.4 billion, on a per capita basis -- the
highest level of U.S. direct investment outside of North America.
Labor relations have been peaceful since the 1930s. Most
industrial workers are organized by unions linked to one of the
major political parties. Representatives of business, unions,
and government participate in the conduct of major labor
Foreign investors often cite Luxembourg's labor relations as a
primary reason for locating in the Grand Duchy. Unemployment in
1996 averaged less than 3.2% of the work force, the lowest in the
Luxembourg's small but productive agricultural sector provides
employment for about 3.5% of the workforce. Most farmers are
engaged in dairy and meat production. Vineyards in the Moselle
valley annually produce about 15 million liters of dry white
wine, most of which is consumed locally.
Luxembourg's trade account has run a persistent deficit over the
last decade, but the country enjoys an overall balance-of-payment
surplus, due to revenues from financial services. Government
finances are strong, and budgets are normally in surplus.
Luxembourg has long been a prominent supporter of European
political and economic integration. In efforts foreshadowing
European integration, Luxembourg and Belgium in 1921 formed the
Belgium-Luxembourg Economic Union (BLEU) to create an inter-
exchangeable currency and a common customs regime. Luxembourg is
a member of the Benelux Economic Union, and was one of the
founding members of the European Economic Community (now the
European Union). It also participates in the Schengen Group,
whose goal is the free movement of citizens among member states.
At the same time, Luxembourgers have consistently recognized that
European unity makes sense only in the context of a dynamic,
transatlantic relationship and have traditionally pursued a pro-
NATO, pro-U.S. foreign policy.
Luxembourg is the site of the European Court of Justice, the
European Court of Auditors, and other vital EU organs. The
Secretariat of the European Parliament is located in Luxembourg,
but the Parliament usually meets in nearby Strasbourg.
The Luxembourg Army is under civilian control with responsibility
for defense matters vested in the Ministry of Public Force
(headed by Minister Alex Bodry), which also controls the police
and the Gendarmerie. Luxembourg has no navy or air force. A
1967 law made the army an all-volunteer force with current
strength of approximately 500 soldiers and 100 civilians and a
total budget of $120 million. Luxembourg has sent troops to
serve in the UNPROFOR and IFOR missions in former Yugoslavia and
participates with a small contingent in the current NATO SFOR
mission in Bosnia and is integrated in the Multinational Beluga
Force under Belgian command. Luxembourg has participated
financially in support of international missions during the 1991
Gulf war and in Rwanda and, recently, Albania. The army also has
participated in humanitarian relief missions such as setting up
refugee camps for Kurds and providing emergency supplies to
Relations between the United States and Luxembourg are warm and
close, both bilaterally and through common membership in the
Organization for Cooperation and Economic Development and NATO.
More than 5,000 American soldiers, including Gen. George S.
Patton, are buried at the American Military Cemetery near the
Principal U.S. Officials
Ambassador -- Clay Constantinou
Deputy Chief of Mission -- Robert J. Faucher
Political/Economic Officer -- George Flowers
Commercial Counselor -- George Knowles
Vice Consul -- Sally Cochran
Administrative Officer -- Tim Harley
The U.S. embassy in Luxembourg is located at 22 Boulevard
Emmanuel Servais, L-2535 Luxembourg City (tel. 352-460-123).
TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Information Program provides
Travel Warnings and Consular Information
Sheets. Travel Warnings are issued when the State Department
Recommends that Americans avoid travel to a certain country. Consular
Information Sheets exist for all countries and include information on
Immigration practices, currency regulations, health conditions, areas of
instability, crime and security, political disturbances, and the addresses
of the U.S. posts in the country. Public Announcements are issued
as a means to disseminate information quickly about terrorist
threats and other relatively short-term conditions overseas which
pose significant risks to the security of American travelers.
Free copies of this information are available by calling the
Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand
system: 202-647-3000. Travel Warnings and Consular Information Sheets
also are available on the Consular Affairs Internet home page:
and the Consular Affairs Bulletin Board (CABB). To access CABB,
dial the modem number: (301-946-4400 (it will accommodate up to
33,600 bps), set terminal communications program to N-8-1 (no
parity, 8 bits, 1 stop bit); and terminal emulation to VT100.
The login is travel and the password is info (Note: Lower case
is required). The CABB also carries international security
from the Overseas Security Advisory Council and Department's
Bureau of Diplomatic Security. Consular Affairs Trips for Travelers
Publication series, which contain information on obtaining passports and
Planning a safe trip abroad, can be purchased from the Superintendent of
Documents, U.S. Government Printing Office, P.O. Box 371954,
Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax 202-512-2250.
Emergency information concerning Americans traveling abroad may
be obtained from the Office of Overseas Citizens Services at
(202) 647-5225. For after-hours emergencies, Sundays and holidays, call
Passport Services information can be obtained by calling the 24-
hour, 7-day a week automated system ($.35 per minute) or live operators
8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The
number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users
(for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-
Travelers can check the latest health information with the U.S.
Centers for Disease Control and Prevention in Atlanta, Georgia.
A hotline at (404) 332-4559 gives the most recent health
advisories, immunization recommendations or requirements, and advice on food
and drinking water safety for regions and countries. A booklet
entitled Health Information for International Travel (HHS
publication number CDC-95-8280) is available from the U.S.
Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.
Information on travel conditions, visa requirements, currency
and customs regulations, legal holidays, and other items of
interest to travelers also may be obtained before your departure from a
country's embassy and/or consulates in the U.S. (for this
country, see "Principal Government Officials" listing in this
U.S. citizens who are long-term visitors or traveling in
Dangerous areas are encouraged to register at the U.S. embassy upon arrival
in a country (see "Principal U.S. Embassy Officials"
listing in this publication). This may help family members
contact you in case of an emergency.
Further Electronic Information:
Department of State Foreign Affairs Network. Available on the
Internet, DOSFAN provides timely, global access to official U.S.
foreign policy information. Updated daily, DOSFAN includes
Background Notes; Dispatch, the official magazine of U.S. foreign
policy; daily press briefings; Country Commercial Guides;
directories of key officers of foreign service posts; etc.
DOSFAN's World Wide Web site is at http://www.state.gov.
U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual
basis by the U.S. Department of State, USFAC archives information
on the Department of State Foreign Affairs Network, and includes
an array of official foreign policy information from 1990 to the
present. Contact the Superintendent of Documents, U.S. Government
Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To
order, call (202) 512-1800 or fax (202) 512-2250.
National Trade Data Bank (NTDB). Operated by the U.S. Department
of Commerce, the NTDB contains a wealth of trade-related
information. It is available on the Internet (www.stat-usa.gov)
and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more
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