With an area of 2,586 square kilometres, it is one of the smallest sovereign states in Europe, about the same size as the US state of Rhode Island or the English county of Northamptonshire. In 2016, Luxembourg had a population of 576,249, which makes it one of the least-populous countries in Europe, but by far the one with the highest population growth rate. As a representative democracy with a constitutional monarch, it is headed by Grand Duke Henri and is the world's only remaining grand duchy. Luxembourg is a developed country, with an advanced economy and one of the world's highest GDP 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.
The history of Luxembourg is considered to begin in 963, when count Siegfried I 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. 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. In 1308, Henry VII, Count of Luxembourg became King of the Germans and Holy Roman Emperor. The House of Luxembourg produced four Holy Roman Emperors at the high time of the Middle Ages. In 1354, Charles IV elevated the County to the Duchy of Luxembourg. Since Sigismund had no male heir, the Duchy became part of the Burgundian Circle and then one of the Seventeen Provinces of the Habsburg Netherlands. 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. After belonging to both the France of Louis XIV and the Austria of Maria Theresia, Luxembourg became part of the First French Republic and Empire under Napoleon.
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. 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 became what is the present state of Luxembourg.
The steel industry exploiting the Red Lands' rich iron-ore grounds in the beginning of the 20th century drove the country's industrialisation. ArcelorMittal, the world's largest steel producer with headquarters in Luxembourg City, is still a reminder of these times. 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, projecting the first involvement in a robotic lunar expedition by 2020.
Luxembourg is a founding member of the European Union, OECD, United Nations, NATO, and Benelux, reflecting its political consensus in favour of economic, political, and military integration. The city of Luxembourg, which is the country's capital and largest city, is the seat of several institutions and agencies of the EU. Luxembourg served on the United Nations Security Council for the years 2013 and 2014, which was a first in the country's history. In 2016 Luxembourgish citizens had visa-free or visa-on-arrival access to 172 countries and territories, ranking the Luxembourgian passport equal 15th in the world, tied with countries such as Canada and Switzerland.
The recorded history of Luxembourg begins with the acquisition of Lucilinburhuc (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. Around this fort, a town gradually developed, which became the centre of a state of great strategic value.
In the 14th and early 15th centuries, three members of the House of Luxembourg reigned as Holy Roman Emperors. In 1437, the House of Luxembourg suffered a succession crisis, precipitated by the lack of a male heir to assume the throne, which led to the territories being sold by Duchess Elisabeth to Philip the Good of Burgundy.
In the following centuries, Luxembourg's fortress was steadily enlarged and strengthened by its successive occupants, the Bourbons, Habsburgs, Hohenzollerns and the French.
After the defeat of Napoleon in 1815, Luxembourg was disputed between Prussia and the Netherlands. The Congress of Vienna formed Luxembourg as a Grand Duchy within the German Confederation in personal union with the Netherlands, being at the same time a part of the Netherlands and ruled as one of its provinces, with the Fortress of Luxembourg manned by Prussian troops. This arrangement was revised by the 1839 First Treaty of London, from which date Luxembourg's full independence is reckoned.
At the time of the Belgian Revolution of 1830–1839, and by the 1839 Treaty establishing full independence, Luxembourg's territory was reduced by more than half, as the predominantly francophone western part of the country was transferred to Belgium. In 1842 Luxembourg joined the German Customs Union (Zollverein). 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, particularly the construction of the Luxembourg-Thionville railway line, with connections from there to the European industrial regions. While Prussian troops still manned the fortress, in 1861, the Passerelle was opened, the first road bridge spanning the Pétrusse river valley, connecting the Ville Haute and the main fortification on the Bock with Luxembourg railway station, opened in 1859, on the then fortified Bourbon plateau to the south.
After the Luxembourg Crisis of 1866 nearly led to war between Prussia and France, the Grand Duchy's independence and neutrality were again affirmed by the 1867 Second Treaty of London, Prussia's troops were withdrawn from the Fortress of Luxembourg, and its Bock and surrounding fortifications were dismantled.
The King of the Netherlands remained Head of State as Grand Duke of Luxembourg, maintaining a personal union between the two countries until 1890. At the death of William III, the throne of the Netherlands passed to his daughter Wilhelmina, while Luxembourg (then restricted to male heirs by the Nassau Family Pact) passed to Adolph of Nassau-Weilburg.
At the time of the Franco-Prussian war in 1870, despite allegations about French use of the Luxembourg railways for passing soldiers from Metz (then part of France) through the Duchy, and for forwarding provisions to Thionville, Luxembourg's neutrality was respected by Germany, and neither France nor Germany invaded the country. But in 1871, as a result of Germany's victory over France, Luxembourg's boundary with Lorraine, containing Metz and Thionville, changed from being a frontier with a part of France to a frontier with territory annexed to the German Empire as Alsace-Lorraine under the Treaty of Frankfurt. This allowed Germany the military advantage of controlling and expanding the railways there.
In August 1914, Imperial Germany violated Luxembourg's neutrality in the war by invading it in the war against France. This allowed Germany to use the railway lines, while at the same time denying them to France. Nevertheless, despite the German occupation, Luxembourg was allowed to maintain much of its independence and political mechanisms.
In 1940, after the outbreak of World War II, Luxembourg's neutrality was again violated when the Wehrmacht of Nazi Germany entered the country, "entirely without justification". In contrast to the First World War, under the German occupation of Luxembourg during World War II, the country was treated as German territory and informally annexed to the adjacent province of the Third Reich. A government in exile based in London supported the Allies, sending a small group of volunteers who participated in the Normandy invasion. Luxembourg was liberated in September 1944, and became a founding member of the United Nations in 1945. Luxembourg's neutral status under the constitution formally ended in 1948, and in 1949 it became a founding member of NATO.
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. In 2005, a referendum on the EU treaty establishing a constitution for Europe was held.
Luxembourg is a parliamentary democracy headed by a constitutional monarch. Under the constitution of 1868, executive power is exercised by the Grand Duke and the cabinet, which consists of several other ministers. 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.
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.
The Grand Duchy 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 105 communes. Twelve of the communes have city status, of which the city of Luxembourg is the largest.
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 a regime of inter-exchangeable currency and a common customs. 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), whose goal is the free movement of citizens among member states. 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.
Luxembourg is the site of the European Court of Justice, 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.
The Army is situated on the "Härebierg" which is luxemburgish and translates to "men's mountain"
Luxembourg maintains a very small army of about 800 soldiers and 100 civil servants to its defense and to NATO. Being a landlocked country, it has no navy.
Luxembourg also lacks an air force, though the 17 NATO AWACS aeroplanes are, for convenience, registered as aircraft of Luxembourg. In accordance with a joint agreement with Belgium, both countries have put forth funding for one A400M military cargo plane.
Luxembourg is one of the smallest countries in Europe, and ranked 179th 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 5° and 7° E.
To the east, Luxembourg borders the German Bundesländer of Rhineland-Palatinate and Saarland, and to the south, it borders the French région of Lorraine. The Grand Duchy borders the Belgian Walloon Region, in particular the latter's 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, which is the highest point, at 560 metres (1,837 ft). Other mountains are the 'Buurgplaaz' at 559 metres near Huldange and the 'Napoléonsgaard' at 554 metres 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 Luxembourg also ranks 6th among the top ten most livable cities in the world by Mercer's.
Luxembourg has an oceanic climate (Köppen: Cfb), marked by high precipitation, particularly in late summer. The summers are warm and winters cool.
Luxembourg's stable and high-income market economy features moderate growth, low inflation, and a high level of innovation. 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. Consequently, Luxembourg's economy was forecast to have negligible growth in 2012. 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. Luxembourg is ranked 13th in The Heritage Foundation's Index of Economic Freedom, 26th in the United Nations Human Development Index, and 4th in the Economist Intelligence Unit's quality of life index.
External debt of Luxembourg is extremely high when external debt per capita or debt-to-GDP ratio is taken into consideration. External debt per capita (2014) is $3,696,467 and as a percentage of GDP it is 3443%, the world's highest by both measurements.
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 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.
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". In March 2010, the Sunday Telegraph reported that most of Kim Jong-Il's $4 billion in secret accounts is in Luxembourg banks. Amazon.co.uk also benefits from Luxembourg tax loopholes by channeling substantial UK revenues as reported by The Guardian in April 2012. 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. In 2013, Luxembourg is ranked as the 2nd safest tax haven in the world, behind Switzerland.
Agriculture is based on small, family-owned farms.
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.
With $171 billion in May 2015, the country ranks eleventh in the world in holdings of U.S. Treasury securities. However, securities owned by non-Luxembourg residents, but held in custodial accounts in Luxembourg, are also included in this figure.
Luxembourg has efficient road, rail and air transport facilities and services. The road network has been significantly modernised in recent years with 147 km (91 mi) 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. There are plans to introduce trams in the capital and light-rail lines in adjacent areas within the next few years.
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.
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 of the Government of 2011 which transposes the European Telecom Directives into Luxembourgian law. This encourages the investment in networks and services. The regulator ILR – Institut Luxembourgeois de Régulation ensures the compliance to these legal rules.
Luxembourg has modern and widely deployed optical fiber 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. In 2011, Luxembourg had an NGA coverage of 75%. In April 2013, Luxembourg featured the 6th highest download speed worldwide and the 2nd highest in Europe: 32,46 Mbit/s. The country's location in Central Europe, stable economy and low taxes favour the telecommunication industry.
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.
Luxembourg is connected to all major European Internet Exchanges (AMS-IX Amsterdam, DE-CIX Frankfurt, LINX London), datacenters and POPs through redundant optical networks. In addition, the country is connected to the virtual meetme room services (vmmr) of the international data hub operator Ancotel. This enables Luxembourg to interconnect with all major telecommunication operators and data carriers worldwide. The interconnection points are in Frankfurt, London, New York and Hong Kong.
Several providers interconnect Luxembourg to the major European data hubs:
Luxembourg is connected through an optical DWDM network, called Teralink to several Tier 1 upstream providers like Level3 and Global Crossing. Teralink offers connectivities up to 100 Gbit/s. P&TLuxembourg established a coherent 100Gbit/s IP connection between Frankfurt and Luxembourg with live traffic in 2011.
The Internet IPV6 protocol has been introduced to the country by Restena and P&T Luxembourg.
Luxembourg has one Internet exchange point and one Carrier Ethernet Exchange point.
The online portal De Guichet of the Grand Duchy of Luxembourg is a single one-stop online shop for citizens and companies to undertake various administrative operations (procedures, online forms, downloadable forms, and advice) by Internet.
PSA Peugeot Citroën, with P&TLuxembourg as its partner, has introduced an integrated mobile telecommunication solution for the development of its telematic services in Europe.
Some 20 data centres are operating in Luxembourg. Six data centers are Tier IV Design certified: three of ebrc, two of LuxConnect and one of European Data Hub. In a survey on nine international data centers 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 centers.