Luxembourg ( LUK-səm-burg;[8] Luxembourgish: Lëtzebuerg [ˈlətsəbuəɕ] (About this sound); French: Luxembourg; German: Luxemburg), officially the Grand Duchy of Luxembourg,[c] is a landlocked country in Western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France to the south. Its capital, Luxembourg City,[9] is one of the four official capitals of the European Union (together with Brussels, Frankfurt, and Strasbourg) and the seat of the Court of Justice of the European Union, the highest judicial authority in the EU.[10] Its culture, people, and languages are highly intertwined with its neighbours, making it a mixture of French and German cultures. It has three official languages: French, German, and the national language of Luxembourgish.[11]

With an area of 2,586 square kilometres (998 sq mi), it is one of the smallest sovereign states in Europe.[12] In 2019, Luxembourg had a population of 626,108, which makes it one of the least-populous countries in Europe,[13] but by far the one with the highest population growth rate.[14] Foreigners account for nearly half of Luxembourg's population.[15] As a representative democracy with a constitutional monarch, it is headed by Grand Duke Henri and is the world's only remaining sovereign grand duchy. Luxembourg is a developed country, with an advanced economy and one of the world's highest GDP (PPP) per capita. The City of Luxembourg with its old quarters and fortifications was declared a UNESCO World Heritage Site in 1994 due to the exceptional preservation of the vast fortifications and the old city.[16]

The history of Luxembourg is considered to begin in 963, when count Siegfried acquired a rocky promontory and its Roman-era fortifications known as Lucilinburhuc, "little castle", and the surrounding area from the Imperial Abbey of St. Maximin in nearby Trier.[17][18] Siegfried's descendants increased their territory through marriage, war and vassal relations. At the end of the 13th century, the counts of Luxembourg reigned over a considerable territory.[19] In 1308, Count of Luxembourg Henry VII became King of the Germans and later Holy Roman Emperor.[20] The House of Luxembourg produced four emperors during the High Middle Ages. In 1354, Charles IV elevated the county to the Duchy of Luxembourg.[21] The duchy eventually became part of the Burgundian Circle and then one of the Seventeen Provinces of the Habsburg Netherlands.[22] Over the centuries, the City and Fortress of Luxembourg, of great strategic importance situated between the Kingdom of France and the Habsburg territories, was gradually built up to be one of the most reputed fortifications in Europe.[citation needed] After belonging to both the France of Louis XIV and the Austria of Maria Theresa, Luxembourg became part of the First French Republic and Empire under Napoleon.[23]

The present-day state of Luxembourg first emerged at the Congress of Vienna in 1815. The Grand Duchy, with its powerful fortress, became an independent state under the personal possession of William I of the Netherlands with a Prussian garrison to guard the city against another invasion from France.[24][21] In 1839, following the turmoil of the Belgian Revolution, the purely French-speaking part of Luxembourg was ceded to Belgium and the Luxembourgish-speaking part (except the Arelerland, the area around Arlon) became what is the present state of Luxembourg.[25]

Luxembourg is a founding member of the European Union,[26] OECD, United Nations, NATO, and Benelux.[27][28] The city of Luxembourg, which is the country's capital and largest city, is the seat of several institutions and agencies of the EU.[29] Luxembourg served on the United Nations Security Council for the years 2013 and 2014, which was a first in the country's history.[30] As of 2020, Luxembourg citizens had visa-free or visa-on-arrival access to 187 countries and territories, ranking the Luxembourgish passport fifth in the world, tied with Denmark and Spain.[31]

The first traces of settlement in what is now Luxembourg are dated back to the Paleolithic Age, about 35.000 years ago. From the 2nd century BC, Celtic tribes settled in the region between the rivers Rhine and Meuse, thus settling in the region which constitutes today's Grand-Duchy.[33]

A few centuries later, the Romans would name the Celtic tribes inhabiting these exact regions collectively as the Treveri, and multiple archaeological evidence of their existence in Luxembourg have been discovered, the most famous being the "Oppidum of the Titelberg".
In around 58 to 51 BC, the Romans invaded the country when Julius Caesar conquered Gaul and part of Germania up to the Rhine border, thus the area of what is now Luxembourg became part of the Roman Empire for the next 450 years, living in relative peace under the Pax Romana.
Similarly to what happened in Gaul, the Celts of Luxembourg adopted Roman culture, language, morals and a way of life, effectively becoming what historians later described as Gallo-Roman civilisation.[34] Evidences from that period of time include the Dalheim Ricciacum and the Vichten mosaic which is on display at the National Museum of History and Art in Luxembourg City.[35]

The territory was infiltrated by the Germanic Franks starting from the 4th century, and was abandoned by Rome in 406 AD.[36] The territory of what would become Luxembourg now became part of the Kingdom of the Franks. The Salian Franks who settled in the area are often described as the ones having brought the Germanic language to present-day Luxembourg, since the old Frankish language spoken by them is considered by linguists to be a direct forerunner of the Moselle Franconian dialect, which later evolved, among others, into the modern-day Luxembourgish language.[37][38]

The Christianization of Luxembourg also falls into this epoch and is usually dated back to the end of the 7th century. The most famous figure in this context is Willibrord, a Northumbrian missionary saint, who together with other monks established the Abbey of Echternach in 698 AD.[39] It is in his honour that the notable Dancing procession of Echternach takes place annually on Whit Tuesday. For a few centuries, the abbey would become one of northern Europe's most influential abbeys. The Codex Aureus of Echternach, an important surviving codex written entirely in gold ink, was produced here in the 11th century.[40] The so-called Emperor's Bible and the Golden Gospels of Henry III were also produced in Echternach at this time, when production of books at the scriptorium peaked during the middle-age.[41][42]

When the Carolingian Empire was divided multiple times starting with the Treaty of Verdun in 843, today's Luxembourgish territory became successively part of the Kingdom of Middle Francia (843–855), the Kingdom of Lotharingia (855-959) and finally of the Duchy of Lorraine (959–1059), which itself had become a state of the Holy Roman Empire.[44]

The recorded history of Luxembourg begins with the acquisition of Lucilinburhuc[45] (today Luxembourg Castle) situated on the Bock rock by Siegfried, Count of Ardennes, in 963 through an exchange act with St. Maximin's Abbey, Trier.[46] Around this fort, a town gradually developed, which became the centre of a state of great strategic value within the Duchy of Lorraine.[16] Over the years the fortress had been extended by Siegfried's descendants and by 1083, one of them, Conrad I, was the first to call himself a "Count of Luxembourg", and with it effectively creating the independent County of Luxembourg (which was still a state within the Holy Roman Empire).[47]

By the middle of the 13th century, the counts of Luxembourg had managed to considerably gain in wealth and power, and had expanded their territory from the river Meuse to the Moselle. By the time of the reign of Henry V the Blonde, Bitburg, La Roche-en-Ardenne, Durbuy, Arlon, Thionville, Marville, Longwy, and in 1264 the competing County of Vianden (and with it St. Vith) had either been incorporated directly or become vassal states to the County of Luxembourg.[48] The only major setback during their rise in power came in 1288, when Henry VI and his three brothers died at the Battle of Worringen, while trying unsuccessfully to also add the Duchy of Limburg into their realm. But despite the defeat, the Battle of Worringen helped the Counts of Luxembourg to achieve military glory, which they had previously lacked, as they had mostly enlarged their territory by means of inheritances, marriages and fiefdoms.[49]

The ascension of the Counts of Luxembourg culminated when Henry VII became King of the Romans, King of Italy and finally, in 1312, Holy Roman Emperor.[50]

Golden Age: The House of Luxembourg contending for supremacy in Central Europe (1312–1443)

With the ascension of Henry VII as Emperor, the new dynasty of the House of Luxembourg not only began to rule the Holy Roman Empire, but rapidly began to exercise growing influence over other parts of Central Europe as well.

Henry's son, John the Blind, additionally of being Count of Luxembourg, also became King of Bohemia. He remains a major figure in Luxembourgish history and folklore and is considered by many historians the epitome of chivalry in medieval times. He is also known for having founded the Schueberfouer in 1340.[51] John the Blind is considered a national hero in Luxembourg.[52]

In the 14th and early 15th centuries, two more members of the House of Luxembourg reigned as Holy Roman Emperors and Bohemian Kings: John's descendants Charles IV, as well as Sigismund, who additionally was King of Hungary and Croatia. Charles IV created the long-lasting Golden Bull of 1356, a decree which fixed important aspects of the constitutional structure of the Empire. Luxembourg remained an independent fief (county) of the Holy Roman Empire, and in 1354, Charles IV elevated it to the status of a duchy with his brother Wenceslaus I becoming the first Duke of Luxembourg. While his kin were occupied ruling and expanding their power within the Holy Roman Empire and elsewhere, Wenceslaus, annexed the County of Chiny in 1364, and with it, the territories of the new Duchy of Luxembourg reached its greatest extent.[53]

During these 130 years, the House of Luxembourg was contending with the House of Habsburg for supremacy within the Holy Roman Empire and Central Europe. It all came to end in 1443, when the House of Luxembourg suffered a succession crisis, precipitated by the lack of a male heir to assume the throne. Since Sigismund and Elizabeth of Görlitz were both heirless, all possessions of the Luxembourg Dynasty were redistributed among the European aristocracy.[54] The Duchy of Luxembourg become a possession of Philip the Good, Duke of Burgundy.[55]

As the House of Luxembourg had become extinct and Luxembourg now became part of the Burgundian Netherlands , this would mark the start of nearly 400 years of foreign rule over Luxembourg.

Luxembourg under Habsburg rule and repeated French invasions (1444–1794)

In 1482, Philip the Handsome inherited all of what became then known as the Habsburg Netherlands, and with it the Duchy of Luxembourg. For nearly 320 years Luxembourg would remain a possession of the mighty House of Habsburg, at first under Austrian rule (1444-1556), then under Spanish rule (1556-1714), before going back again to Austrian rule (1714-1794).
With having become a Habsburg possession, the Duchy of Luxembourg became, like many countries in Europe at the time, heavily involved into the many conflicts for dominance of Europe between the Habsburg-held countries and the Kingdom of France.

In 1542 Francois I invaded Luxembourg twice, but the Habsburgs under Charles V managed to reconquer the Duchy each time.[56]

Luxembourg become part of the Spanish Netherlands in 1556, and when France and Spain went to war in 1635 it resulted in the Treaty of the Pyrenees, in which the first partition of Luxembourg was decided. Under the Treaty, Spain ceded the Luxembourgish fortresses of Stenay, Thionville, and Montmédy, and the surrounding territory to France, effectively reducing the size of Luxembourg for the first time in centuries.[57]

In context of the Nine Years' War in 1684, France invaded Luxembourg again, conquering and occupying the Duchy until being forced to return it to the Habsburgs in 1697. But, yet again, peace lasted not long, as France invaded Luxembourg a third time when the War of the Spanish Succession broke out in 1701. Only at its conclusion in 1714 began a period of peace as Luxembourg came back under Austrian rule.[58]

As the Duchy of Luxembourg repeatedly passed back and forth from Spanish and Austrian to French rule, each of the conquering nations contributed to strengthening and expanding the Forteress that the Castle of Luxembourg had become over the years. One example of this includes French military engineer Marquis de Vauban who advanced the fortifications around and on the heights of the city, fortification walls that are still visible today.[59]

During the War of the First Coalition, Revolutionary France invaded the Austrian Netherlands, and with it, Luxembourg, yet again. Most of the Duchy was conquered relatively fast, however the Fortress of Luxembourg resisted for nearly 7 months before the Austrian forces holding it surrendered. Luxembourg's long defence led Lazare Carnot to call Luxembourg "the best fortress in the world, except Gibraltar", giving rise to the city's nickname the Gibraltar of the North.[60]

Luxembourg was annexed by France, becoming the département des forêts (department of forests), and the incorporation of the former Duchy as a département into France was formalised at the Treaty of Campo Formio in 1797.[61] From the start of the occupation the new French officials in Luxembourg, who spoke only French, implemented many republican reforms, among them the principle of laicism, which led to an outcry in strongly catholic Luxembourg. Additionally French was implemented as the only official language and luxembourgish people were barred access to all civil services.[62] When the French Army introduced military duty for the local population, riots broke out which culminated in 1798 when luxembourgish peasants started a rebellion.[63]The French managed to rapidly suppress this revolt, which is called the Peasant's War.[64]

However, many republican ideas of this era continue to have a lasting effect on Luxembourg: one of the many examples features the implementation of the Napoleonic Code Civil which was introduced in 1804 and is still valid today.[65]

Gradual path towards independence and emergence of a national awareness (1815–1890)

After the defeat of Napoleon in 1815, the Duchy of Luxembourg was restored. However, as the territory had been part of the Holy Roman Empire as well as the Habsburgian Netherlands in the past, both the Kingdom of Prussia and the United Kingdom of the Netherlands now claimed possession of the territory. At the Congress of Vienna the great powers decided that Luxembourg would become a member state of the newly formed German Confederation, but at the same time William I of the Netherlands, the King of the Netherlands, would become, in personal union, the head of state. To satisfy Prussia, it was decided that not only the Fortress of Luxembourg be manned by Prussian troops, but also that large parts of Luxembourgish territory (mainly the areas around Bitburg and St. Vith) become Prussian possessions.[66] This marked the second time that the Duchy of Luxembourg was reduced in size, and is generally known as the Second Partition of Luxembourg. To compensate the Duchy for this loss, it was decided to elevate the Duchy to a Grand-Duchy, thus giving the Dutch monarchs the additional title of Grand-Duke of Luxembourg.

After Belgium became an independent country following the victorious Belgian Revolution of 1830-1831, it claimed the entire Grand-Duchy of Luxembourg as being part of Belgium. The dispute would be solved at the 1839 Treaty of London where the decision of the Third Partition of Luxembourg was taken. This time the territory was reduced by more than half, as the predominantly francophone western part of the country was transferred to the new state of Belgium and with it giving Luxembourg its modern-day borders. The treaty of 1839 also established full independence of the remaining Germanic-speaking Grand-Duchy of Luxembourg.[67][68][69][70]

In 1842 Luxembourg joined the German Customs Union (Zollverein).[71][72] This resulted in the opening of the German market, the development of Luxembourg's steel industry, and expansion of Luxembourg's railway network from 1855 to 1875.

After the Luxembourg Crisis of 1866 nearly led to war between Prussia and France, as both were unwilling to see the other taking influence over Luxembourg and its mighty fortress, the Grand Duchy's independence and neutrality were reaffirmed by the Second Treaty of London and Prussia was finally willing to withdraw its troops from the Fortress of Luxembourg under the condition that the fortifications would be dismantled. That happened the same year.[73] At the time of the Franco-Prussian war in 1870, Luxembourg's neutrality was respected by the North German Confederation, and neither France nor Germany invaded the country.[74][75]

As a result of the recurring disputes between the major European powers, the people of Luxembourg gradually developed a consciousness of independence and a national awakening took place in the 19th century.[76] The people of Luxembourg began referring to themselves as Luxembourgers, rather than being part of one of the larger surrounding nations. This consciousness of Mir wëlle bleiwe wat mir sinn culminated in 1890, when the last step towards full independence was finally taken: due to a succession crisis the Dutch monarchy ceased to hold the title Grand-Duke of Luxembourg. Beginning with Adolph of Nassau-Weilburg, the Grand-Duchy would have their own monarchy, thus reaffirming its full independence.[77]

In August 1914, during World War I, Imperial Germany violated Luxembourg's neutrality by invading it in order to defeat France. Nevertheless, despite the German occupation, Luxembourg was allowed to maintain much of its independence and political mechanisms.[78] Unaware of the fact that Germany secretly planned to annexe the Grand-Duchy in case of a German victory (the Septemberprogramm), the Luxembourgish government continued to pursue a policy of strict neutrality. However, the Luxembourgish population did not believe Germany's good intentions, fearing that Germany would annexe Luxembourg. Around 3,700 Luxembourgers served in the French army, of whom, 2,000 died.[79] Their sacrifices have been commemorated at the Gëlle Fra.

After the war, Grand-Duchess Marie-Adélaïde, was seen by many people (including the French and Belgian governments) as having collaborated with the Germans and calls for her abdication and the establishment of a Republic became louder.[80][81] After the retreat of the German army, communists in Luxembourg City and Esch-sur-Alzette tried to establish a soviet worker's republic similar to the ones emerging in Germany, but these attempts lasted only 2 days.[82][83] In November 1918, a motion in the Chamber of Deputies demanding the abolition of the monarchy was defeated narrowly by 21 votes to 19 (with 3 abstentions).[84]

France questioned the Luxembourgish government's, and especially Marie-Adélaïde's, neutrality during the war, and calls for an annexation of Luxembourg to either France or Belgium grew louder in both countries.[85] In January 1919, a company of the Luxembourgish Army rebelled, declaring itself to be the army of the new republic, but French troops intervened and put an end to the rebellion.[86] Nonetheless, the disloyalty shown by her own armed forces was too much for Marie-Adélaïde, who abdicated in favour of her sister Charlotte 5 days later.[87] The same year, in a popular referendum, 77.8% of the Luxembourgish population declared in favour of maintaining monarchy and rejected the establishment of a republic. During this time, Belgium pushed for an annexation of Luxembourg. However, all such claims were ultimately dismissed at the Paris Peace Conference, thus securing Luxembourg's independence.[88]

In 1940, after the outbreak of World War II, Luxembourg's neutrality was violated again when Nazi Germany's Wehrmacht entered the country, "entirely without justification".[89] In contrast to the First World War, under the , the country was treated as German territory and informally annexed to the adjacent province of the Third Reich, Gau Moselland. This time, Luxembourg did not remain neutral as Luxembourg's government in exile based in London supported the Allies, sending a small group of volunteers who participated in the Normandy invasion, and multiple resistance groups formed inside the occupied country.[90]

With 2.45% of its prewar population killed, and a third of all buildings in Luxembourg being destroyed or heavily damaged (mainly due to the Battle of the Bulge), Luxembourg suffered the highest such loss in Western Europe and its commitment to the Allied war effort was never questioned.[91]

The Grand-Duchy became a founding member of the United Nations in 1945. Luxembourg's neutral status under the constitution formally ended in 1948, and in April 1949 it also became a founding member of NATO.[92] During the Cold War, Luxembourg continued its involvements on the side of the Western Bloc. In the early fifties a small contingent of troops fought in the Korean War.[93] Luxembourg troops have also deployed to Afghanistan, to support ISAF.[94]

In 1951, Luxembourg became one of the six founding countries of the European Coal and Steel Community, which in 1957 would become the European Economic Community and in 1993 the European Union. In 1999 Luxembourg joined the Eurozone.

The steel industry exploiting the Red Lands' rich iron-ore grounds in the beginning of the 20th century drove the country's industrialisation. After the decline of the steel industry in the 1970s, the country focused on establishing itself as a global financial centre and developed into the banking hub it is reputed for. Since the beginning of the 21st century, its governments have focused on developing the country into a knowledge economy, with the founding of the University of Luxembourg and a national space programme.

Luxembourg is described as a "full democracy",[95] with a parliamentary democracy headed by a constitutional monarch. Executive power is exercised by the grand duke and the cabinet, which consists of several other ministers.[96] The Constitution of Luxembourg, the supreme law of Luxembourg, was adopted on 17 October 1868.[97] The grand duke has the power to dissolve the legislature, in which case new elections must be held within three months. However, since 1919, sovereignty has resided with the nation, exercised by the grand duke in accordance with the Constitution and the law.[98]

Legislative power is vested in the Chamber of Deputies, a unicameral legislature of sixty members, who are directly elected to five-year terms from four constituencies. A second body, the Council of State (Conseil d'État), composed of twenty-one ordinary citizens appointed by the grand duke, advises the Chamber of Deputies in the drafting of legislation.[99]

Luxembourg has three lower tribunals (justices de paix; in Esch-sur-Alzette, the city of Luxembourg, and Diekirch), two district tribunals (Luxembourg and Diekirch), and a Superior Court of Justice (Luxembourg), which includes the Court of Appeal and the Court of Cassation. There is also an Administrative Tribunal and an Administrative Court, as well as a Constitutional Court, all of which are located in the capital.

Luxembourg is divided into 12 cantons, which are further divided into 102 communes.[100] Twelve of the communes have city status; the city of Luxembourg is the largest.[101]

Luxembourg has long been a prominent supporter of European political and economic integration. In 1921, Luxembourg and Belgium formed the Belgium–Luxembourg Economic Union (BLEU) to create a regime of inter-exchangeable currency and a common customs.[72] 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 (named after the Luxembourg village of Schengen where the agreements were signed).[28] At the same time, the majority of Luxembourgers have consistently believed that European unity makes sense only in the context of a dynamic transatlantic relationship, and thus have traditionally pursued a pro-NATO, pro-US foreign policy.[citation needed]

Luxembourg is the site of the Court of Justice of the European Union, the European Court of Auditors, the Statistical Office of the European Communities (Eurostat) and other vital EU organs. The Secretariat of the European Parliament is located in Luxembourg, but the Parliament usually meets in Brussels and sometimes in Strasbourg.[102]

Luxembourgish soldiers on parade during National Day, Grand Duke Day, 23 June

The Luxembourgish army is mostly based in its casern, the Centre militaire Caserne Grand-Duc Jean on the Härebierg in Diekirch.The general staff is based in the capital, the État-Major.[103] The army is under civilian control, with the grand duke as Commander-in-Chief. The Minister for Defence, François Bausch, oversees army operations. The professional head of the army is the Chief of Defence, who answers to the minister and holds the rank of general.

Being a landlocked country, Luxembourg has no navy. Seventeen NATO AWACS aeroplanes are registered as aircraft of Luxembourg.[104] In accordance with a joint agreement with Belgium, both countries have put forth funding for one A400M military cargo plane.[105]

Luxembourg has participated in the Eurocorps, has contributed troops to the UNPROFOR and IFOR missions in former Yugoslavia, and has participated with a small contingent in the NATO SFOR mission in Bosnia and Herzegovina. Luxembourg troops have also deployed to Afghanistan, to support ISAF. The army has also participated in humanitarian relief missions such as setting up refugee camps for Kurds and providing emergency supplies to Albania.[106]

Luxembourg is one of the smallest countries in Europe, and ranked 167th in size of all the 194 independent countries of the world; the country is about 2,586 square kilometres (998 sq mi) in size, and measures 82 km (51 mi) long and 57 km (35 mi) wide. It lies between latitudes 49° and 51° N, and longitudes and 7° E.[107]

To the east, Luxembourg borders the German Bundesländer of Rhineland-Palatinate and Saarland, and to the south, it borders the French région of Grand Est (Lorraine). The Grand Duchy borders Belgium's Wallonia, in particular the Belgian provinces of Luxembourg and Liège, part of which comprises the German-speaking Community of Belgium, to the west and to the north, respectively.

The northern third of the country is known as the Oesling, and forms part of the Ardennes. It is dominated by hills and low mountains, including the Kneiff near Wilwerdange,[108] which is the highest point, at 560 metres (1,840 ft). Other mountains are the Buurgplaatz at 559 metres (1,834 ft) near Huldange and the Napoléonsgaard at 554 metres (1,818 ft) near Rambrouch. The region is sparsely populated, with only one town (Wiltz) with a population of more than four thousand people.

The southern two-thirds of the country is called the Gutland, and is more densely populated than the Oesling. It is also more diverse and can be divided into five geographic sub-regions. The Luxembourg plateau, in south-central Luxembourg, is a large, flat, sandstone formation, and the site of the city of Luxembourg. Little Switzerland, in the east of Luxembourg, has craggy terrain and thick forests. The Moselle valley is the lowest-lying region, running along the southeastern border. The Red Lands, in the far south and southwest, are Luxembourg's industrial heartland and home to many of Luxembourg's largest towns.

The border between Luxembourg and Germany is formed by three rivers: the Moselle, the Sauer, and the Our. Other major rivers are the Alzette, the Attert, the Clerve, and the Wiltz. The valleys of the mid-Sauer and Attert form the border between the Gutland and the Oesling.

According to the 2012 Environmental Performance Index, Luxembourg is one of the world's best performers in environmental protection, ranking 4th out of 132 assessed countries.[109] In 2020 the country was ranked second out of 180 countries[110] Luxembourg also ranks 6th among the top ten most liveable cities in the world by Mercer's.[111] The country wants to cut GHG emissions by 55% in 10 years and reach zero emissions by 2050. Luxemburg wants to increase fivefold its organic farming.[112] Luxembourg had a 2019 Forest Landscape Integrity Index mean score of 1.12/10, ranking it 164th globally out of 172 countries.[113]

Luxembourg has an oceanic climate (Köppen: Cfb), marked by high precipitation, particularly in late summer. The summers are warm and winters cool.[114]

Graphical depiction of Luxembourg's product exports in 28 colour-coded categories

Luxembourg's stable and high-income market economy features moderate growth, low inflation, and a high level of innovation.[115] Unemployment is traditionally low, although it had risen to 6.1% by May 2012, due largely to the effect of the 2008 global financial crisis.[116] In 2011, according to the IMF, Luxembourg was the second richest country in the world, with a per capita GDP on a purchasing-power parity (PPP) basis of $80,119.[117] Its GDP per capita in purchasing power standards was 261% of the EU average (100%) in 2019.[118] Luxembourg is ranked 13th in The Heritage Foundation's Index of Economic Freedom,[119] 26th in the United Nations Human Development Index, and 4th in the Economist Intelligence Unit's quality of life index.[120]

The industrial sector, which was dominated by steel until the 1960s, has since diversified to include chemicals, rubber, and other products. During the past decades, growth in the financial sector has more than compensated for the decline in steel production. Services, especially banking and finance, account for the majority of the economic output. Luxembourg is the world's second largest investment fund centre (after the United States), the most important private banking centre in the Eurozone and Europe's leading centre for reinsurance companies. Moreover, the Luxembourg government has aimed to attract Internet start-ups, with Skype and Amazon being two of the many Internet companies that have shifted their regional headquarters to Luxembourg. Other high-tech companies have established themselves in Luxembourg, including 3D scanner developer/manufacturer Artec 3D.[citation needed]

In April 2009, concern about Luxembourg's banking secrecy laws, as well as its reputation as a tax haven, led to its being added to a "grey list" of nations with questionable banking arrangements by the G20. In response, the country soon after adopted OECD standards on exchange of information and was subsequently added into the category of "jurisdictions that have substantially implemented the internationally agreed tax standard".[121][122] In March 2010, the Sunday Telegraph reported that most of Kim Jong-Il's $4 billion in secret accounts is in Luxembourg banks.[123] also benefits from Luxembourg tax loopholes by channelling substantial UK revenues as reported by The Guardian in April 2012.[124] Luxembourg ranked third on the Tax Justice Network's 2011 Financial Secrecy Index of the world's major tax havens, scoring only slightly behind the Cayman Islands.[125] In 2013, Luxembourg is ranked as the 2nd safest tax haven in the world, behind Switzerland.

In early November 2014, just days after becoming head of the European Commission, the Luxembourg's former Prime Minister Jean-Claude Juncker was hit by media disclosures—derived from a document leak known as Luxembourg Leaks—that Luxembourg under his premiership had turned into a major European centre of corporate tax avoidance.[126]

Agriculture employed about 2.1 per cent of Luxembourg's active population in 2010, when there were 2200 agricultural holdings with an average area per holding of 60 hectares.[127]

Luxembourg has especially close trade and financial ties to Belgium and the Netherlands (see Benelux), and as a member of the EU it enjoys the advantages of the open European market.[citation needed]

With $171 billion in May 2015, the country ranks eleventh in the world in holdings of U.S. Treasury securities.[128] However, securities owned by non-Luxembourg residents, but held in custodial accounts in Luxembourg, are also included in this figure.[129]

As of 2019, the public debt of Luxembourg totalled $15,687,000,000, or a per capita debt of $25,554. The debt to GDP was 22.10%.[130]

Luxembourg has road, rail and air transport facilities and services. The road network has been significantly modernised in recent years with 165 km (103 mi)[131] of motorways connecting the capital to adjacent countries. The advent of the high-speed TGV link to Paris has led to renovation of the city's railway station and a new passenger terminal at Luxembourg Airport was opened in 2008.[132] Luxembourg city reintroduced trams in December 2017 and there are plans to open light-rail lines in adjacent areas within the next few years.[133]

The number of cars per 1000 persons amount to 680.1 in Luxembourg — higher than all but two states, namely the Principality of Monaco and the British overseas territory of Gibraltar.[134]

On 29 February 2020 Luxembourg became the first country to introduce no-charge public transportation which will be almost completely funded through public expenditure.[135]

The telecommunications industry in Luxembourg is liberalised and the electronic communications networks are significantly developed. Competition between the different operators is guaranteed by the legislative framework Paquet Telecom[136] of the Government of 2011 which transposes the European Telecom Directives into Luxembourgish law. This encourages the investment in networks and services. The regulator ILR – Institut Luxembourgeois de Régulation[137] ensures the compliance to these legal rules.[citation needed]

Luxembourg has modern and widely deployed optical fibre and cable networks throughout the country. In 2010, the Luxembourg Government launched its National strategy for very high-speed networks with the aim to become a global leader in terms of very high-speed broadband by achieving full 1 Gbit/s coverage of the country by 2020.[138] In 2011, Luxembourg had an NGA coverage of 75%.[139] In April 2013 Luxembourg featured the 6th highest download speed worldwide and the 2nd highest in Europe: 32,46 Mbit/s.[140] The country's location in Central Europe, stable economy and low taxes favour the telecommunication industry.[141][142][143]

It ranks 2nd in the world in the development of the Information and Communication Technologies in the ITU ICT Development Index and 8th in the Global Broadband Quality Study 2009 by the University of Oxford and the University of Oviedo.[144][145][146][147]

Luxembourg is connected to all major European Internet Exchanges (AMS-IX Amsterdam,[148] DE-CIX Frankfurt,[149] LINX London),[150] data centres and POPs through redundant optical networks.[151][152][153][154][155] In addition, the country is connected to the virtual meetme room services (vmmr)[156] of the international data hub operator Ancotel.[157] This enables Luxembourg to interconnect with all major telecommunication operators[158] and data carriers worldwide. The interconnection points are in Frankfurt, London, New York and Hong Kong.[159] Luxembourg has established itself as one of the leading financial technology (FinTech) hubs in Europe, with the Luxembourg government supporting initiatives like the Luxembourg House of Financial Technology.[160]

Some 20 data centres[161][162][163] are operating in Luxembourg. Six data centres are Tier IV Design certified: three of ebrc,[164] two of LuxConnect[165][166] and one of European Data Hub.[167] In a survey on nine international data centres carried out in December 2012 and January 2013 and measuring availability (up-time) and performance (delay by which the data from the requested website was received), the top three positions were held by Luxembourg data centres.[168][169]

The people of Luxembourg are called Luxembourgers.[171] The immigrant population increased in the 20th century due to the arrival of immigrants from Belgium, France, Italy, Germany, and Portugal, with the majority coming from the latter: in 2013 there were about 88,000 inhabitants with Portuguese nationality.[172] In 2013, there were 537,039 permanent residents, 44.5% of which were of foreign background or foreign nationals; the largest foreign ethnic groups were the Portuguese, comprising 16.4% of the total population, followed by the French (6.6%), Italians (3.4%), Belgians (3.3%) and Germans (2.3%). Another 6.4% were of other EU background, while the remaining 6.1% were of other non-EU, but largely other European, background.[173]

Since the beginning of the Yugoslav wars, Luxembourg has seen many immigrants from Bosnia and Herzegovina, Montenegro, and Serbia. Annually, over 10,000 new immigrants arrive in Luxembourg, mostly from the EU states, as well as Eastern Europe. In 2000 there were 162,000 immigrants in Luxembourg, accounting for 37% of the total population. There were an estimated 5,000 illegal immigrants in Luxembourg in 1999.[174]

Coin of the former Luxembourg franc in two of the country's three languages: French (obverse, left) and Luxembourgish (reverse, right)

The three official languages of Luxembourg are French, German and Luxembourgish: a Franconian language specific to the local population which is partially mutually intelligible with the neighbouring High German, but which also includes more than 5,000 words of French origin.[175][176] Every citizen or resident has the right to address the administration in the language of their choice among the three official languages and to be answered in that language.

Luxembourg is largely multilingual; while a 2009 survey revealed that French was the language spoken by most inhabitants (99%), Luxembourgish (82%), German (81%) and English (72%) were also spoken by large sections of the population.[177]

Each of the three official languages is used as the primary language in certain spheres of everyday life, without being exclusive. Luxembourgish is the national language of the Grand Duchy and is considered the mother tongue or "language of the heart" for the local population,[178] being the language that Luxembourgers generally use to speak to each other. However, despite a recent increase in the production of novels in the language, it is seldom used as written language, and the numerous expatriate workers (approximately 60% of the population) also generally do not use it to speak to each other.

Most official business and written communication is carried out in French, which is also the language mostly used for public communication, with written official statements, advertising displays and road signs generally being in French. Due to the historical influence of the Napoleonic Code on the legal system of the Grand Duchy, French is also the sole language of the legislation and generally the preferred language of the government, administration and justice. The parliamentary debates are however mostly conducted in Luxembourgish, whereas the written government communications and the official documents (e.g. administrative or judicial decisions, passports etc.) are drafted only in French.[citation needed]

Although professional life is largely multilingual, French is described by private sector business leaders as the main working language of their companies (56%), followed by Luxembourgish (20%), English (18%), and German (6%).[179]

German is very often used in much of the media along with French.[180]

Due to the large community of Portuguese origin, the Portuguese language is de facto fairly present in Luxembourg though it remains limited to the relationships inside this community; although Portuguese does not have any official status, the administration sometimes holds certain informative documents available in Portuguese.[citation needed]

Luxembourg is a secular state, but the state recognises certain religions as officially mandated religions. This gives the state a hand in religious administration and appointment of clergy, in exchange for which the state pays certain running costs and wages. Religions covered by such arrangements are Roman Catholicism, Judaism, Greek Orthodoxy, Anglicanism, Russian Orthodoxy, Lutheranism, Calvinism, Mennonitism, and Islam.[181]

Since 1980 it has been illegal for the government to collect statistics on religious beliefs or practices.[182] An estimation by the CIA Factbook for the year 2000 is that 87% of Luxembourgers are Catholic, including the grand ducal family, the remaining 13% being made up of Protestants, Orthodox Christians, Jews, Muslims, and those of other or no religion.[183] According to a 2010 Pew Research Center study, 70.4% are Christian, 2.3% Muslim, 26.8% unaffiliated, and 0.5% other religions.[184]

According to a 2005 Eurobarometer poll,[185] 44% of Luxembourg citizens responded that "they believe there is a God", whereas 28% answered that "they believe there is some sort of spirit or life force", and 22% that "they do not believe there is any sort of spirit, god, or life force".

The University of Luxembourg is the only university based in the country.

Luxembourg's education system is trilingual: the first years of primary school are in Luxembourgish, before changing to German; while in secondary school, the language of instruction changes to French.[186] Proficiency in all three languages is required for graduation from secondary school, but half the students leave school without a certified qualification, with the children of immigrants being particularly disadvantaged.[187] In addition to the three national languages, English is taught in compulsory schooling and much of the population of Luxembourg can speak English. The past two decades have highlighted the growing importance of English in several sectors, in particular the financial sector. Portuguese, the language of the largest immigrant community, is also spoken by large segments of the population, but by relatively few from outside the Portuguese-speaking community.[188]

The University of Luxembourg is the only university based in Luxembourg. In 2014, Luxembourg School of Business, a graduate business school, has been created through private initiative and has received the accreditation from the Ministry of Higher Education and Research of Luxembourg in 2017.[189][190] Two American universities maintain satellite campuses in the country, Miami University (Dolibois European Center) and Sacred Heart University (Luxembourg Campus).[191]

According to data from the World Health Organization, healthcare spending on behalf of the government of Luxembourg topped $4.1 Billion, amounting to about $8,182 for each citizen in the nation.[192][193] The nation of Luxembourg collectively spent nearly 7% of its Gross Domestic Product on health, placing it among the highest spending countries on health services and related programs in 2010 among other well-off nations in Europe with high average income among its population.[194]

Luxembourg has been overshadowed by the culture of its neighbours. It retains a number of folk traditions, having been for much of its history a profoundly rural country. There are several notable museums, located mostly in the capital. These include the National Museum of History and Art (NMHA), the Luxembourg City History Museum, and the new Grand Duke Jean Museum of Modern Art (Mudam). The National Museum of Military History (MNHM) in Diekirch is especially known for its representations of the Battle of the Bulge. The city of Luxembourg itself is on the UNESCO World Heritage List, on account of the historical importance of its fortifications.[195][unreliable source?]

The country has produced some internationally known artists, including the painters Théo Kerg, Joseph Kutter and Michel Majerus, and photographer Edward Steichen, whose The Family of Man exhibition has been placed on UNESCO's Memory of the World register, and is now permanently housed in Clervaux. Movie star Loretta Young was of Luxembourgish descent.[196]

Luxembourg was a founding participant of the Eurovision Song Contest, and participated every year between 1956 and 1993, with the exception of 1959. It won the competition a total of five times, 1961, 1965, 1972, 1973 and 1983 and hosted the contest in 1962, 1966, 1973, and 1984, but only eight of its 38 entries were performed by Luxembourgish artists.[citation needed]

Luxembourg was the first city to be named European Capital of Culture twice. The first time was in 1995. In 2007, the European Capital of Culture[197] was to be a cross-border area consisting of the Grand Duchy of Luxembourg, the Rheinland-Pfalz and Saarland in Germany, the Walloon Region and the German-speaking part of Belgium, and the Lorraine area in France. The event was an attempt to promote mobility and the exchange of ideas, crossing borders physically, psychologically, artistically and emotionally.[citation needed]

Luxembourg was represented at the World Expo 2010 in Shanghai, China, from 1 May to 31 October 2010 with its own pavilion.[198][199] The pavilion was based on the transliteration of the word Luxembourg into Chinese, "Lu Sen Bao", which means "Forest and Fortress". It represented Luxembourg as the "Green Heart in Europe".[200]

Unlike most countries in Europe, sport in Luxembourg is not concentrated upon a particular national sport, but encompasses a number of sports, both team and individual. Despite the lack of a central sporting focus, over 100,000 people in Luxembourg, out of a total population of near 500,000–600,000, are licensed members of one sports federation or another.[201] The largest sports venue in the country is d'Coque, an indoor arena and Olympic swimming pool in Kirchberg, north-eastern Luxembourg City, which has a capacity of 8,300. The arena is used for basketball, handball, gymnastics, and volleyball, including the final of the 2007 Women's European Volleyball Championship. The national stadium (also the country's largest) is the Stade Josy Barthel, in western Luxembourg City; named after the country's only official Olympic gold medallist, the stadium has a capacity of 8,054.[citation needed]

Luxembourg cuisine reflects its position on the border between the Latin and Germanic worlds, being heavily influenced by the cuisines of neighbouring France and Germany. More recently, it has been enriched by its many Italian and Portuguese immigrants.[citation needed]

Most native Luxembourg dishes, consumed as the traditional daily fare, share roots in the country's folk dishes the same as in neighbouring Germany.[citation needed]

Luxembourg sells the most alcohol in Europe per capita.[202] However, the large proportion of alcohol purchased by customers from neighbouring countries contributes to the statistically high level of alcohol sales per capita; this level of alcohol sales is thus not representative of the actual alcohol consumption of the Luxembourg population.[203]

The main languages of media in Luxembourg are French and German. The newspaper with the largest circulation is the German-language daily Luxemburger Wort.[204] Because of the strong multilingualism in Luxembourg, newspapers often alternate articles in French and articles in German, without translation. In addition there are both English and Portuguese radio and national print publications, but accurate audience figures are difficult to gauge since the national media survey by ILRES[205] is conducted in French.[citation needed]

Luxembourg is known in Europe for its radio and television stations (Radio Luxembourg and RTL Group). It is also the uplink home of SES, carrier of major European satellite services for Germany and Britain.[citation needed]

Due to a 1988 law that established a special tax scheme for audiovisual investment, the film and co-production in Luxembourg has grown steadily.[206] There are some 30 registered production companies in Luxembourg.[207][208]

Luxembourg won an Oscar in 2014 in the Animated Short Films category with Mr Hublot.[citation needed]