Luxembourg - A Country Overview

A brief overview of Luxembourg: its geographic location, history, government, climate, security, tourism and international community...


Luxembourg is a country of gently rolling hills and wide shallow valleys. The Oesling region in the north is slightly mountainous and densely wooded. These hills are part of the Ardennes plateau, a region of forests, hills and ridges that also cover parts of Belgium and France. The highest point in the country is the 560m Kneiff, though the Burgplaatz which is one metre lower is often mistakenly given this honour.

The remaining flatter land to the south is very fertile and known as Gutland. It is gently wooded or used as farmland. Gutland is much more urbanised than the sparsely populated Oesling.

In the east is the Moselle, a wine producing region. The land in the extreme southwest of the country is rich in red iron ore. This is the Luxembourg iron ore basin, one of the major iron producing regions in Europe and the most densely populated part of the country. The region has long supported a thriving steel industry which has expanded in recent years into chemicals and engineering.

The longest river in Luxembourg is the Sauer, a tributary of the Moselle which flows through France, Luxembourg and Germany. Most of Luxembourg's land is in the Moselle basin.

The capital city, Luxembourg City, is located in Gutland, where the majority of the country's population lives.


Luxembourg was formed in 963 following the construction of a castle on the current site of Luxembourg City, when Siegfried I, Count of the Ardennes acquired an ancient fort. A town subsequently developed around the castle as the Counts of Luxembourg accumulated territory over the next 300 years. It developed into a major fortress and the County of Luxembourg occupied an area stretching from the Moselle to the Meuse Rivers by the end of the 13th century.

It became a grand duchy in 1815 at the Congress of Vienna after the collapse of the Napoleonic empire. This ended centuries of foreign sovereignty during which the territory was ruled by amongst others the Spanish, Austrians and French. The territory was given to the King of the Netherlands as a personal property though it was an independent state. This close union with the Netherlands lasted until 1890. This was a period when the territory's political independence was strengthened though much of the territory was lost to Belgium in 1839.

In 1867 the revised treaty of London reaffirmed Luxembourg's territory and its political autonomy. It was recognised as an independent country by the great European powers. The Grand Duchy was also declared to be perpetually neutral. Luxembourg has had its own dynasty since the end of its close union with the Netherlands in 1890 when the crown of the territory was passed to the elder branch of the House of Nassau.

The country was occupied by Germany in both the World Wars despite its neutral status. In World War One Imperial Germany used Luxembourg as an administrative and logistical base. No fighting occurred in the country but martial law was imposed restricting the population's rights and liberties. Martial law was imposed again during World War Two when the country was first invaded and used to channel troops and logistics towards the fighting in France before being integrated into the Third Reich. During the occupation the Grand Duke and family as well as the cabinet remained in exile first in the United States and Canada and subsequently in London.

The name Luxembourg was replaced with "Gau Moselland" (the Moselle country district) and run by the "Gauleiter", a senior Nazi official. German laws were imposed, speaking the native language was forbidden and any French sounding names were converted to German. When a Nazi organised referendum revealed that people were strongly opposed to becoming German citizens people were beaten and imprisoned by the Gestapo. Young Luxembourgers who organised public strikes against the Nazis were shot at the Hinzert concentration camp in Germany.

German troops abandoned the Grand Duchy in September 1944 after four years of brutal occupation. While the war continued in Belgium thousands of American troops were accommodated in Luxembourg. However, the Germans were building up forces to attack the west in what was to be the "Battle of the Bulge" and launched a surprise attack in December 1944. German troops raced through the Ardennes as most of the civilian population was evacuated by the Americans. A series of counterattacks by American troops slowly pushed back the German advance. By February 1945, the Battle of the Bulge was nearly over and American troops in Luxembourg crossed the Sauer River to invade Germany, which capitulated four months later. Civilian refugees were allowed to return to their villages in the Ardennes in March and April 1945. The damage to the villages was severe and some took years to rebuild.

Luxembourg ended its neutrality when it entered into the Benelux Customs Union with Belgium and the Netherlands in 1948. A year later it also joined NATO. Luxembourg was one of the founding countries of the European Economic Community, which later became the European Union. The current ruler is H.R.H Grand Duke Henri. He succeeded his father to the throne in October 2000. The Euro has been the country's currency since 1999.

Politics and Government

The Grand Duke is the sovereign monarch and also the head of state of a multi-party democratic system. The monarchy is hereditary and the Grand Duke is inviolable; he cannot be held to account. The politics of Luxembourg are typified by stability and long serving administrations. Executive power is shared between the Duke and a cabinet made up of 12 ministers.

Legislative power is held by a parliament, or chamber of deputies who are elected for five year terms by Luxembourg's people. Following these elections, the leader of the majority party or coalition is usually appointed to be the prime minister by the monarch. The 12 ministers who make up the cabinet are appointed by the Duke after recommendation by the prime minister.

The country is split into three administrative districts: Luxembourg, Diekirch and Grevenmacher and has 12 cantons and four electoral constituencies. The commissioners of the three districts act as intermediaries between local authorities and government. The judiciary is independent of both the executive and legislative branches of the government. There are two judicial districts made up of three magistrate's courts.


Luxembourg is a prominent financial centre which historically, has had a strong, stable economy, characterised by both low unemployment and low inflation. The strength of the economy is down to the discovery of iron ore in the south of the country in the 1840s. The discovery marked a major transition from an agrarian to an industrial state. The country has a very high standard of living.

Traditionally, steel manufacturing from the country's iron ore deposits was the main industry in Luxembourg but now the productions of chemicals and rubber are also important. The decline of the steel industry has been compensated for by a growing financial and services sector. The country is now one of the world's biggest financial centres with many major banks and investment trusts based in Luxembourg City. In recent years, there has been an expansion into the information technology and e-commerce sectors. Tourism also makes a significant contribution to the country's economy.

Like all European Union (EU) countries the economy has slowed in response to the recent financial crisis though unemployment trends have been better than the EU average. The Luxembourg economy is very dependent on both foreign and cross-border workers for its labour force.


Luxembourg has a continental climate with mild winters and cool summers. It rarely experiences extremes in weather but does receive a fairly high level of rainfall. July and August are the hottest months though there is often more sunshine in May and June. The weather tends to be more unstable in the north of the country where the effects of Atlantic weather systems are felt.


Luxembourg is a safe country which very rarely experiences terrorist activity. Violent crime is rare. Common crimes include breaking into unoccupied houses and bag snatching. Pickpockets can be a problem in busy public areas such as railway stations and the airport.

Foreigners Living in the Country

The Luxembourg population includes the highest number of foreign residents of any European Union country. There has been steady immigration into the country since the latter half of the 19th century resulting in a near doubling of the population. The majority of foreign residents are from other European Union countries including Portugal, France, Germany and Italy. Today nearly half of the population are foreigners with people of 160 nationalities making the Duchy their home.


Despite its small size, Luxembourg is an interesting and varied country with many tourist attractions. Visitors come to explore the country's history and landscape. The most popular destination is the fortified City of Luxembourg, the oldest parts of which have been declared a UNESCO World Heritage Site.

People interested in Luxembourg's history can explore the many impressive medieval castles such as those at Vianden and Clervaux.

The Moselle wine region is also a popular choice with holidaymakers, who can discover it on foot or by boat on a river cruise. There are many wine cellars in the region offering wine tastings and guided tours. Popular outdoor activities include the 100 Km footpath of the Mullerthal Trail, which offers the chance to see the rock formations, forests and canyons of Luxembourg's "Little Switzerland". The extensive pine forests of the Ardennes are popular with walkers, cyclists and, in winter, cross country skiers.