PROFILE

Country Profile

Area: 2,586 sq km
Population: 500,000
Capital City: Luxembourg (population 90,000)
Languages: Luxembourgish (national language), German and French
Religions: Predominantly Roman Catholic, but some Protestants, Jews and Muslims
Currency: euro (#)
Major political parties: Christian Social People's Party (CSV), Luxembourg Socialist Workers' Party (LSAP), Democratic Party (DP), Action Committee for Democracy and Justice (ADR), Green Party, Marxist and Reformed Communist Party (Dei Lenk - the Left).
Government: Luxembourg is a hereditary Grand Duchy with a unicameral parliamentary system. The present Government is a coalition of the Christian Social Party (CSV) and the Socialist Party (LSAP).
Head of State: Grand Duke Henri (succeeded on 7 October 2000)
Prime Minister/Premier: Jean-Claude Juncker
Foreign Minister: Jean Asselborn
Membership of international groupings/organisations: One of the six founding members of the European Community (EC) (now European Union (EU)) and an active member of North Atlantic Treaty Organisation (NATO), the Western European Union (WEU) and the United Nations (UN).

Did You Know?

-- The 1867 Treaty of London proclaimed the neutrality of Luxembourg and stipulated the dismantling of the federal Prussian fortress of Luxembourg the evacuation of the fortress of Luxembourg by Prussian troops.

-- Grand Duke Jean (who reigned from 1964-2000) was a Colonel in the Irish Guards.

-- In 1952, Luxembourg was chosen as the first site of the European Coal and Steel community. The ECSC, founded in 1951, marked the start of the institutional development which led to the European Union.

-- Luxembourg is the site of several European institutions including the European Court of Justice, the European Court of Auditors, the European Investment Bank and parts of the European Commission.

-- First military operation of WW I was the occupation by the Imperial German Army of the Troisvierges Railway Station in the northern part of Luxembourg on 3rd of August 1914

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ECONOMY

Basic economic facts

GDP: € 42.892 billion (2010)
Annual Growth: 3.5% in June 2011, 2010 estimate: 2.1%, 2011: 3.2%, 2012: 3.5%, 2013: 3.7%, 2014: 4 %
Inflation: 2.3% in 2010
Major Industries: Banking/financial services, telecommunications, iron, steel and chemicals.
UK Trade & Investment Country Profile: Luxembourg (http://www.uktradeinvest.gov.uk/ukti/luxembourg)

Luxembourg has a stable high-income economy. As a result of this, there are low unemployment rates, and low inflation. The country is heavily dependent on international trade. Its economy is based mainly around banking, insurance, telecommunications and the steel industry which dominates the Industrial sector, although activity in this sector has diversified to include products such as rubber and chemicals. Since the 1970's constant growth in the financial sector has made up for the decline in steel and this sector is now the dominant force in the economy. In Luxembourg, farms are often small and family owned. More than 30% of the labour force are cross border workers, and the economy relies heavily on them.

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HISTORY

-- 963 - Independent County. First written record of the name of Luxembourg in an exchange act between count Sigfried and the St Maximin monastery of Trier.

-- 13th Century - Independent Duchy (providing 4 Holy Roman Emperors)

1443 - Burgundian Rule

-- 1506 - Spanish Rule

1684 - French Rule

-- 1697 - Spanish Rule

1714 - Austrian Rule

-- 1795 - French Rule

1814 - Grand Duchy under Dutch Rule

-- 1839 - Independent Grand Duchy

BBC Timeline of Luxembourg (http://news.bbc.co.uk/hi/english/world/europe/newsid_1061000/1061873.stm)

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INTERNATIONAL RELATIONS

Relations with the international community

Luxembourg's external interests are centred on the EU, where the Government tends to favour integrationist proposals. They support developing the security role of the EU while maintaining the primacy of NATO and the transatlantic link. In countries where Luxembourg is not represented diplomatically, Belgium takes care of its economic interests and the Netherlands the political. Luxembourg held the Presidency of the EU from January to June 2005.

Relations with the UK

Luxembourg enjoys good bilateral relations with the UK. The Grand Duke is an Honorary Major in the British Army. He and his family maintain close contacts with the UK. British Ministers frequently see their Luxembourg counterparts at EU meetings.

Cultural Relations with the UK

The number of Luxembourg students in the UK has been growing. Some 10% at undergraduate level now choose the UK. Luxembourg University was founded in 2003 and offers a limited range of graduate and post-graduate degree courses.

Recent Visits

Inward:
-- Foreign Minister Jean Asselborn came to London for talks with the Foreign Secretary in January 2011.

-- Finance Minister Luc Frieden visited London in February 2011 and met the Chancellor.

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GEOGRAPHY

Luxembourg is located in Western Europe and shares borders with Belgium, France and Germany.

Trade and Investment with the UK

UK exports to Luxembourg went down from €360 million in 2000 to € 237 million in 2009 (average over this period € 569 million) whilst imports from Luxembourg went down by 29% to €405 million (2000: €572 million, average €569 million). The import-export balance was negative for goods in 2009 (- €3,014 million) and positive in services (€17,996 million). The overall balance of payments was € 2,130 million in 2009. In 2005, 213 Luxembourg companies had Foreign Direct Investment and 861 foreign companies had FDI in Luxembourg.

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POLITICS

Recent Political Developments

The present government, which came to power on 20 July 2009 following elections on 7 June 2009, is a coalition of the Christian Social Party (CSV) and the Socialist Party (LSAP), headed respectively by Jean- Claude Juncker (CSV), who is Prime Minister and Minister of Finance, and Jean Asselborn (LSAP) who is Deputy Prime Minister and Minister of Foreign Affairs, Immigration and Asylum.

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