Luxembourg
GANG INFORMATON
PROFILE
OFFICIAL NAME:
Grand Duchy of Luxembourg
Geography
Area: 2,586 sq. km. (999 sq. mi.; about half the size of Rhode
Island).
Cities: Capital--Luxembourg (pop. 77,300) (2004). Other cities--EschAlzette,
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 (2005): 455,000.
Annual growth rate (2005): 0.75%.
Ethnic groups: Celtic base with French and German blend; also
guest workers from Portugal, Italy, France, and Belgium.
Religion: Historically Roman Catholic. Luxembourg law forbids
the collection of data on religious practices.
Official languages: Luxembourgish, French, and German; English
is widely spoken.
Education: Years compulsory--9. Attendance--100%. Literacy--100%.
Health: Life expectancy--avg. 78 years; males 75 years, females
82 years. Infant mortality rate--4.88/1000.
Work force (2004, 293,670): Services--27%; agriculture--1%; industry--13%;
government and social services--22%; financial services --28%;
construction--8%.
Unemployment (2004): 4.6%.
Government
Type: Constitutional monarchy.
Independence: 1839.
Constitution: 1868.
Branches: Executive--Grand Duke (head of state, ceremonial), Prime
Minister (head of government). Legislative--unicameral parliament
(Chamber of Deputies with Council of State serving as a consultative
body). Judicial--Superior Court.
Political parties: Christian Social Party (CSV), Socialist Party
(LSAP), Democratic (Liberal) Party (DP), Green Party, Action Committee
for Democracy and Pension Rights (ADR).
Suffrage: Universal over age of 18.
Government budget (2004): 6,990 billion euros (EUR).
Economy
GDP (2004): $29.02 billion (23.5 billion EUR).
Annual growth rate (2004): 2.1%.
Per capita income (2004): 52,600 EUR.
Inflation rate (May 2005): 2.4%.
Natural resources: Iron ore.
Agriculture (0.5% of GNP): Products--dairy products, corn, wine.
Arable land--49%.
Services (2004): 88.9%.
Industry (16.3% of GNP): Types--chemicals, steel.
Trade (2005): Exports--$10.138 billion: steel, chemicals, plastics,
rubber and processed wood products. Major markets--Germany, Belgium,
France, and Asia. Imports--$16.597 billion: manufactured metals,
minerals, including iron ore, coal, and petroleum products; mechanical
and electrical equipment, transportation equipment, scrap metal.
Major suppliers--other EU countries (esp. Belgium, France, and
Germany).
HISTORY
After 400 years of domination by various European nations, Luxembourg
was granted the status of Grand Duchy by the Congress of Vienna
on June 9, 1815. Although Luxembourg considers 1835 (Treaty of
London) to be its year of independence, it was not granted political
autonomy until 1839 under King William I of the Netherlands, who
also was the Grand Duke of Luxembourg. In 1867, Luxembourg was
recognized as independent and guaranteed perpetual neutrality.
After being occupied by Germany in both World Wars, Luxembourg
abandoned neutrality and became a charter member of the North
Atlantic Treaty Organization (NATO) in 1949. It is also one of
the six original members of the European Union, formed in 1951
as the European Coal and Steel Community (ECSC).
The present sovereign, Grand Duke Henri, succeeded his father,
Grand Duke Jean, on October 7, 2000. Grand Duke Jean announced
his decision to abdicate in December 1999, after a 35-year reign.
The national language of Luxembourg is Luxembourgish, a blend
of Dutch, 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
and police case files are recorded in German. 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.
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 includes the prime minister, who
serves as head of government. The prime minister is the leader
of the political party or coalition of parties having the most
seats in parliament, known as the Chamber of Deputies.
Legislative power is vested in the Chamber of Deputies, the members
of which are elected directly to 5-year terms. A second body,
the "Conseil d'État" (Council of State), composed
of 21 ordinary citizens appointed by the Grand Duke, advises the
Chamber of Deputies in the drafting of legislation. The Council’s
opinions have no binding effect, and the responsibilities of its
members are in addition to their normal professional duties.
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
Head of State--Grand Duke Henri of Luxembourg
Prime Minister, Minister of State, Minister of Finance--Jean-Claude
Juncker (CSV)
Vice Prime Minister, Minister of Foreign Affairs and Immigration--Jean
Asselborn (LSAP)
Minister of Justice, Treasury and Budget, and Defense--Luc Frieden
(CSV)
Minister of Economy and Foreign Trade--Jeannot Krecke (LSAP)
Ambassador to the United States--Arlette Conzemius
Ambassador to the United Nations--Jean-Marc Hoscheit
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
Luxembourg’s political system has a strong local focus.
National politicians very often begin their careers and establish
their base serving as mayors, and members of the Chamber of Deputies
are elected from one of four regions. The political culture favors
consensus, and the parties coexist within the context of broad
agreement on key issues, including the value of deep European
integration.
Since the end of World War II, the Christian Social Party (CSV)
has almost continually been the dominant partner in governing
coalitions. The CSV resembles Christian democratic parties in
other west European countries and enjoys broad popular support.
Its leader, Prime Minister Jean Claude Juncker, is the most senior
head of government in the European Union.
The Socialist Party (LSAP) is a center-left party similar to
most social democratic parties in Europe. Initially founded by
a worker’s movement and a main defender of universal suffrage
in 1919, the LSAP defends state intervention in the economy and
the sustainability of the welfare system. Part of the government
from 1984 to 1999, it lost its junior coalition status to the
Democratic Party but regained it in the 2004 elections. While
in the opposition, the LSAP voiced opposition to U.S. action in
Iraq.
The Democratic Party (DP) is a center-right party, drawing support
from civil servants, the professions, and urban middle class.
Like other west European liberal parties, it advocates both social
legislation and minimum government involvement in the economy.
It also is strongly pro-NATO. In the opposition from 1984 to 1999,
the DP overcame the LSAP to claim the role of junior partner in
the government from 1999-2004. It is currently again in the opposition.
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, but
it has shown some openness to peacekeeping missions.
National elections are held at least every 5 years and municipal
elections every 6 years. In the June 2004 parliamentary elections,
the CSV won 24 seats, the DP 10, the LSAP 14, the ADR (a single-issue
party that emerged from the LSAP focused on pension rights) 5,
and the "Greens" 7. As a result, the DP ceded their
junior coalition position back to the LSAP, which had been the
junior coalition member from 1984 to 1999. Jean-Claude Juncker
(CSV) has remained for a third 5-year term as Prime Minister.
In July 2004, Prime Minister Juncker announced the new government
and appointed Jean Asselborn (LSAP) as the Vice Prime Minister
and Minister of Foreign Affairs and Immigration.
ECONOMY
While Luxembourg is aptly described as the "Green Heart of
Europe" in tourist literature, 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. In 2001, Arbed
merged with Aceralia and Usinor to form Arcelor, the world’s
second-largest steel producer, which is headquartered in Luxembourg.
The iron and steel industry comprises a little less than 10.6%
of the overall economy.
There has been a relative decline in the steel sector, offset
by Luxembourg's emergence as a financial center. The financial
sector in 2004 made up 28.9% of Luxembourg’s economy, while
other services such as health, public administration, and education
comprised 16.4%. Banking is especially important. In May 2005,
there were 161 banks in Luxembourg, with 22,711 employees. Political
stability, good communications, easy access to other European
centers, skilled multilingual staff, and a tradition of banking
secrecy have contributed to the growth of the financial sector.
Germany accounts for the largest single grouping of banks, with
Belgian, French, Swiss, and major U.S. banks also heavily represented.
Total banking assets exceeded $725 billion in April 2005. Approximately
13,569 holding companies with 36.4 billion EUR in capital are
established in Luxembourg.
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 Société
Européenne 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 12 satellites.
ASTRA 1H is an advanced satellite with a return channel capacity
in the Ka band frequency range enabling two-way satellite communications
directly to users’ terminals.
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. The recent European Union (EU) directive
on services supplied electronically has caused a number of companies
to look to Luxembourg, with its relatively low value-added tax
(VAT) rates, as a possible location for directing their European
operations. 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 Department
of Commerce's Bureau of Economic Analysis reports that total U.S.
direct investment in Luxembourg (on a historical cost basis) was
nearly $67 billion at the end of 2003. Foreign direct investment
(FDI) data for Luxembourg must be interpreted cautiously, however,
because of Luxembourg's role in financial intermediation, particularly
involving Luxembourg-based holding companies.
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
2004 was 4.2% but rose to 4.6% in April 2005. Luxembourg's small
but productive agricultural sector provides employment for less
than 1.3% of the work force. Most farmers are engaged in dairy
and meat production. Vineyards in the Moselle Valley annually
produce about 12.3 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 (-36772 million EUR in 2004), 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. The government recently announced a 71.2 million-euro
budget surplus for 2004.
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, European Investment Bank, and other vital EU
organs. The Secretariat of the European Parliament is located
in Luxembourg, but the Parliament usually meets in nearby Strasbourg.
Luxembourg held the EU Presidency in the first half of 2005.
DEFENSE
The Luxembourg Army is under civilian control. The country has
no navy or air force. A 1967 law made the army an all-volunteer
force with current strength of approximately 430 professional
soldiers, about 340 enlisted recruits, and 110 civilians. A 2002
law now allows EU citizens, under certain conditions, to join
the Luxembourg Army.
Responsibility for defense matters is vested in the Minister who
is also the Minister of Budget and Treasury, Minister of Justice,
and the Minister in charge of the police. This grouping of portfolios
in the government formed in 2004 was meant to facilitate Luxembourg’s
efforts in combating terrorism and defining a niche role in NATO
and the EU’s defenses and security intitiatives. Defense
had a budget of $252,142,300 in 2004. Luxembourg has participated
in the European Corps (EUROCORPS) since 1994 and has contributed
troops to the UNPROFOR, IFOR, and KFOR missions in the former
Yugoslavia. It has also participated with a small contingent in
the NATO SFOR mission in Bosnia and currently participates in
the NATO ISAF mission in Afghanistan. Luxembourg financially supported
international peacekeeping missions during the 1991 Gulf War and
in Rwanda and Albania and has provided humanitarian aid to Iraq.
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. RELATIONS
Luxemburgers are deeply appreciative of the sacrifices made by
Americans, leading to the country’s liberation in the two
World Wars of the 20th century. More than 5,000 American soldiers,
including Gen. George S. Patton, are buried at the American Military
Cemetery near the capital, and there are monuments in many towns
to American liberators. The strong U.S.-Luxembourg relationship
is expressed both bilaterally and through common membership in
NATO, the Organization for Economic Cooperation and Development
(OECD), and the Organization for Security and Cooperation in Europe
(OSCE).
Principal U.S. Officials
Ambassador--Ann Wagner
Deputy Chief of Mission--Daniel Piccuta
Political/Economic Chief--Daniel Foote
Economic Officer--Lorelei Snyder
Commercial Assistant--Carla Rosen-Vacher
Management Officer--Daniel Foote
Vice Consul--Caroline Savage
Public Diplomacy--Matthew Long
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 Consular Information Program provides
Consular Information Sheets, Travel Warnings, and Public Announcements.
Consular Information Sheets exist for all countries and include
information on entry requirements, currency regulations, health
conditions, areas of instability, crime and security, political
disturbances, and the addresses of the U.S. posts in the country.
Travel Warnings are issued when the State Department recommends
that Americans avoid travel to a certain country. Public Announcements
are issued as a means to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas
that 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. Consular Information Sheets and Travel Warnings
also are available on the Consular Affairs Internet home page:
http://travel.state.gov. Consular Affairs Tips for Travelers publication
series, which contain information on obtaining passports and planning
a safe trip abroad, are on the Internet and hard copies can be
purchased from the Superintendent of Documents, U.S. Government
Printing Office, 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.
The National Passport Information Center (NPIC) is the U.S. Department
of State's single, centralized public contact center for U.S.
passport information. Telephone: 1-877-4USA-PPT (1-877-487-2778).
Customer service representatives and operators for TDD/TTY are
available Monday-Friday, 8:00 a.m. to 8:00 p.m., Eastern Time,
excluding federal holidays.
Travelers can check the latest health information with the U.S.
Centers for Disease Control and Prevention in Atlanta, Georgia.
A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm
give 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 their travel via the State Department’s
travel registration web site at https://travelregistration.state.gov
or at the Consular section of the U.S. embassy upon arrival in
a country by filling out a short form and sending in a copy of
their passports. This may help family members contact you in case
of an emergency.
Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov,
the Department of State web site provides timely, global access
to official U.S. foreign policy information, including Background
Notes and daily press briefings along with the directory of key
officers of Foreign Service posts and more.
Export.gov provides a portal to all export-related assistance
and market information offered by the federal government and provides
trade leads, free export counseling, help with the export process,
and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce,
provides authoritative economic, business, and international trade
information from the Federal government. The site includes current
and historical trade-related releases, international market research,
trade opportunities, and country analysis and provides access
to the National Trade Data Bank.
