U.S. Department of State
Background Notes: Luxembourg, April 1998


Official Name: Grand Duchy of Luxembourg 

PROFILE


Geography

Area: 2,586 sq. km. (1,034 sq. mi.; about the size of Rhode 
Island).
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.

People

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 -- 
100%.
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%.




Government

Type: Constitutional monarchy.
Independence: 1839.
Constitution: 1868.
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.


Economy

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.



Government

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 
parliament.

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 
Grand Duke.


Principal Government Officials

Chief of State -- the Grand Duke Jean of Luxembourg
Lieutenant Representant  (Deputy Grand Duke) -- Prince Henri of 
Luxembourg
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. 
cities.

Political Conditions

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 
coalition governments.

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 
industrialized south.

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.

Economy

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 
democracies.

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 
employment, 
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 
negotiations.

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 
EU.

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.


Foreign Relations

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.




Defense

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 
Albania.


U.S.-Luxembourg Relations

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 
capital.


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:
http://travel.state.gov
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 
information
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
202-647-4000. 

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-
498-3648)

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
publication). 

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
information. 


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