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EACEA National Policies Platform:Eurydice
Historical development


1.Political, social and economic background and trends

1.1Historical development

Last update: 27 November 2023

The name Luxembourg came into being in 963, during an exchange between count Siegfried and the Saint Maxim’s Abbey of Trier. Count Siegfried became the owner of a rock, the Bock, on which a fortified castle was built. He called it Lucilinburhuc. The castle was soon to be surrounded by a village, a city and then a country. Thus, Siegfried came to be considered as the founder of Luxembourg.

Until the middle of the 14th century, Luxembourg remained a relatively autonomous principality, more or less attached to the German empire. In 1354, however, the former county was raised to the rank of a duchy and acquired the Walloon county of Chiny.

From the 14th century onwards, Luxembourg emerged as a genuine principality. In 1437, the dynasty of the counts of Luxembourg died out, and the torch passed on to the Habsbourgs of Spain. In 1443, Philip the Good of Burgundy acquired Luxembourg. This was to become a salient feature of its destiny: As it was integrated into the Burgundian State, and then into the Netherlands, Luxembourg became an intermediate between the French kingdom and the German empire. The death of Philip the Good’s son, Charles the Bold, put an end to the Burgundian reign. The northern principalities were taken over by the Habsbourgs of Austria in 1715 and were constituted into a confederation called the Netherlands. Luxembourg was a part of this confederation until 1839. In 1795, Luxembourg, the Netherlands and the principality of Liège became part of the French Republic. Luxembourg was named 'Département des Forêts'. During the reign of Louis XIV, Vauban fortified the city of Luxembourg. In 1815, the Congress of Vienna raised the duchy of Luxembourg to a grand duchy, thereby giving it theoretical autonomy while linking it to the Netherlands by means of a personal union: The two distinct countries were governed by the same Head of State: William I of Orange-Nassau, King of the Netherlands, Grand Duke of Luxembourg.

The Treaty of London of 1839 confirmed Luxembourg as a State, at the same time dividing it into two: the French-speaking part was attributed to Belgium while the German-speaking one remained the grand duchy. That was the beginning of Luxembourgish identity, in particular with the emergence of the first national anthem in 18591. But Luxembourg realised that it could not be self-sufficient. In 1842, William II decided to join a customs union with Germany: the 'Zollverein'. Economically, the country grew significantly: iron ore deposits were discovered, railway lines were laid to transport coal. Luxembourg then formed a large mineral basin with Lorraine. The needs of manpower led to a considerable increase in the immigration rate. In 1890, the personal union between Luxembourg and the Netherlands was undone when the last male descendant of the Orange-Nassau dynasty passed away and the crown was passed on to the Nassau-Weilburg branch of the family, which was the only lineage of the Nassau family to have a male descendant. Luxembourg thus ended up with a dynasty of its own. Grand duke Adolphe was the first representative of this lineage. A German attempt to annex Luxembourg in 1914 failed. Had it succeeded, it would have jeopardised the grand duchy’s ongoing tradition of neutrality which was established since 1867. The failed attempt encouraged Luxembourg to free itself from the 'Zollverein'. It then signed an economic agreement with Belgium in 1921 known as the UEBL (Union économique belgo-luxembourgeoise), and adopted the Belgian Franc as the currency of the UEBL, whilst conserving the Luxembourgish franc as its national currency.

The economic depression of the immediate post-war period was followed by a period of prosperity. From 1929 onwards, however, Luxembourg was affected by the world economic crisis. The steel sector mainly depended on France to provide it with iron ore and on Germany to purchase its steel products. During World War II, Luxembourg was subjected to a forced germanisation. Human losses amounted to 2 % of the total population during this period (1.5 % in France). What came out of that traumatic experience was the need to revive. Opening its arms to the outside world for economic purposes became then the grand duchy’s priority. In 1945, Luxembourg became one of the founding members of the UNO. In 1948, it abandoned its neutrality and joined the NATO in 1949 . The UEBL, which had been terminated during the Occupation, was re-enacted after the Liberation. In 1951, Luxembourg became a member of the ECSC (European Coal and Steel Community) – a time when the steel sector represented 75 % of the industrial production – and in 1957, it joined the EEC (European and Economic Community). The ECSC was to be the foundation of a new period of growth and joining the EEC marked the beginning of economic expansion. Luxembourg city was the first place where the ECSC began its work, and went on to become one of the three headquarters of the European Union, beside Strasbourg and Brussels. Starting in the 1960s, the birth of a vast financial market on the one hand, and the integration into the European Union on the other, turned Luxembourg into one of the most cosmopolitan cities of Europe. Luxembourg’s growing financial market compensated for the effects of the steel crisis of 1974–1975 and gradually took over its role as motor of Luxembourg’s economy.

Today, Luxembourg is well represented on the international scene and plays an active role, especially in the field of providing aid to developing countries. Along with Belgium and the Netherlands, Luxembourg forms the Benelux community. It is also considered to be a European microcosm as well as being a model of openness and a 'calm little country'. Luxembourg is one of the founding members of the European Union.

Located at the very heart of Europe, Luxembourg shares borders with Belgium, Germany and France. With its surface area of 2 586 km2, it is one of the smallest States of the European Union. The 2004 entrant Malta is the only country smaller than the grand duchy.




1The national anthem consists of the first and the last verses of the song 'Ons Heemecht' (our country) dated 1859, written by the poet Michel Lentz and composed by Jean-Antoine Zinnen. In 1864 it was first performed in public at a major ceremony in Ettelbruck. Contrary to the French Marseillaise, which is a call to fight, the Luxembourgish national anthem launches a vibrant call to live in peace. This anthem expresses the contry's joy to become independent in tranquility and prosperity. The Wilhelmus anthem about the grand duke’s lineage is sung when members of the grand-ducal family arrive at an official ceremony and when they leave.