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In many ways, Luxembourg is the poster child for the European Union. Despite its small size (or perhaps because of its small size), Luxembourg has avoided both the economic and political unrest that other nations has faced and instead maintains a strong economy and a stable political scene.

The service industry makes up eighty-six percent of the GDP, while industry provides thirteen percent, and agriculture picks up the remaining percent. The country’s primary natural resource is iron ore, and it has a consistent production of chemical and steel. Most of Luxembourg’s imports come from its bordering countries, and most of its exports head to the same countries, as well as some Asian countries.

To a large degree, however, Luxembourg has developed economically by making itself popular with foreign investors. Foreign banks are very common, and the financial sector makes up nearly one third of the GDP. Today, one third of Luxembourg’s residents are citizens of other countries, drawn in by the country’s strong economy.

In the political arena, Luxembourg boasts a constitutional monarchy, formally headed by Grand Duke Henri. Grand Duke Jean, Henri’s father, abdicated the throne in 2000; how’s that for a peaceful change of power. Most real power, however, rests with the prime minister and with the elected legislature, the Chamber of Deputies. A multi-party system exists, and currently a coalition government leads the country. As mentioned earlier, Luxembourg is a dedicated member of the European Union.

Luxembourg and the United States enjoy excellent relations. Luxembourgers appreciate the United States in particular because of America’s role in liberating the country during World War Two (the country even contains a General George Patton museum). Each nation maintains an active embassy in the other, and as partners in NATO, the two nations have shared in military efforts, including the U.S.-led efforts in Afghanistan.

Sources:

http://www.cia.gov
http://www.state.gov
http://www.visitluxembourg.com
http://www.lonelyplanet.com
http://www.about.com
Let’s Go: Western Europe 2005. Stuart J. Robinson, editor. New York: St. Martin’s, 2005.

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