Luxembourg

Founded in 963 and elevated to a grand duchy in 1815, Luxembourg has transformed from a fortified medieval county into a modern, high-income constitutional monarchy positioned at the crossroads of Western Europe. Its territory was finalised in 1839, when the independence of Belgium resulted in territorial losses but enhanced autonomy from the Netherlands. Full sovereignty was secured in 1867 under the Treaty of London, which also declared Luxembourg’s permanent neutrality. Having endured German occupation during both World Wars, the nation renounced neutrality in 1948–49 to join the Benelux Customs Union and NATO, later emerging as a founding member of the European Economic Community (EEC) in 1957. Adopting the euro in 1999, Luxembourg today stands as a hub of European finance, governance, and diplomacy, under the enduring rule of the House of Nassau-Weilburg.

Geography and Environment

Luxembourg lies between France and Germany in Western Europe, covering 2,586 square kilometres—making it smaller than Rhode Island and about half the size of Delaware. It shares 327 kilometres of borders with Belgium (130 km), Germany (128 km), and France (69 km). The terrain features gently rolling uplands, shallow river valleys, and low mountains in the north (Oesling/Ardennes), sloping down to the Moselle River basin in the southeast. Elevations range from Buurgplaatz (559 m) to the Moselle (133 m), with an average of 325 m above sea level.
The climate is modified continental, producing mild winters and cool summers. Flooding, especially along the Moselle and Sauer/Sûre rivers, remains a recurrent hazard. Though historically reliant on iron ore mining, Luxembourg’s natural resources today centre on arable land and forests, which cover 34.5% of its area. Agricultural land (51.3%) supports crops such as cereals, grapes, and pasture for dairy farming.
Environmental policy is tightly linked to EU standards. Key issues include urban air and water pollution, soil degradation, and flood management. The country recycles approximately 42% of municipal solid waste (2022) and participates in multiple environmental conventions addressing climate change, biodiversity, and transboundary pollution.

Demographics and Society

Luxembourg’s population (2024) is 671,254, comprising 338,702 males and 332,552 females, with a median age of 39.9 years. The age profile shows 16.7% aged 0–14, 67.1% aged 15–64, and 16.1% aged 65 and older. A population growth rate of 1.52% and net migration of 10.8 per 1,000 reflect the country’s attraction to EU mobile workers and international professionals, compensating for a low fertility rate of 1.63.
Luxembourg is notably multinational: Luxembourgers (52.9%), Portuguese (14.5%), French (7.6%), Italian (3.7%), Belgian (3%), German (2%), and others (14%). Luxembourgish, the national language, is used in administration and everyday communication; French and German are co-official for legislation, while English, Portuguese, and Italian are also widely spoken.
The population is primarily Christian (70.6%), predominantly Roman Catholic, with Muslim (2.3%), other (0.4%), and non-religious (26.7%) groups.
Public health indicators are high:

• Life expectancy: 83.4 years (men 80.9; women 85.9)
• Infant mortality: 3.2 per 1,000 live births
• Maternal mortality: 12 per 100,000
• Health spending: 5.5% of GDP (2022)

Access to clean water and sanitation is virtually universal. Social health challenges include adult obesity (22.6%) and tobacco use (21%). Urbanisation stands at 92.1%, and school life expectancy averages 14–15 years, supported by education expenditure of 4.7% of GDP.

Government and Politics

Luxembourg is a constitutional monarchy, officially styled the Grand Duchy of Luxembourg (Grand Duché de Luxembourg). The 1868 Constitution, extensively amended, provides for a unicameral Chamber of Deputies with 60 members elected by proportional representation for five-year terms.

• Head of State: Grand Duke Henri (since 2000)
• Head of Government: Prime Minister Luc Frieden (since 17 November 2023)

Constitutional amendments require a two-thirds parliamentary majority, confirmed by two readings three months apart, and may trigger a referendum. The Council of State, composed of 21 members, advises on legislation.
The judiciary follows the civil law system, led by the Supreme Court of Justice (Court of Appeal and Court of Cassation) and a Constitutional Court. Judges are appointed for life by the monarch. The nation is divided into 12 cantons.
Suffrage is universal and compulsory from age 18. Citizenship is primarily by descent, though dual nationality is permitted and naturalisation is available after seven years’ residence.

Economy

Luxembourg maintains one of the highest per-capita GDP levels in the world and is a key international financial centre. Its economy is service-oriented (81.9% of GDP, 2024), anchored by banking, investment funds, and corporate finance.
Economic indicators (2024):

• GDP (PPP): $86.9 billion
• Real GDP growth: 1.0%
• GDP per capita (PPP): $128,200
• Inflation: 2.1%
• Unemployment: 6.0%; youth unemployment: 20.2%
• Public debt: ~23% of GDP
• Tax revenue: 27.2% of GDP

Luxembourg’s exports equal 218% of GDP, while imports represent 187%, underscoring its open economy. The current account surplus reached $12.9 billion (2024).
Principal industries:

• Financial services and banking
• Construction, real estate, IT, and logistics
• Chemicals, steel, glass, tyres, and biotechnology
• Agriculture (milk, cereals, grapes, pork, beef, rapeseed)

Trade partners:

• Exports: Germany (18%), France (15%), Belgium (8%), Netherlands (7%), Italy (6%)
• Imports: Belgium (26%), Germany (23%), France (10%), Netherlands (5%), USA (4%)

Despite high incomes, income inequality (Gini 34.1) and a poverty rate of 17.3% persist. Fiscal management remains prudent, maintaining low debt and high public revenues.

Energy and Infrastructure

Luxembourg’s electricity access is universal. Installed capacity in 2023 totalled 2.21 million kW, with 5.87 billion kWh consumption. As a net importer, it integrates electricity flows with neighbours, importing 6.39 billion kWh and exporting 1.19 billion kWh.
Energy composition:

• Wind: 55.6%
• Solar: 37.2%
• Biomass/waste: 32.5%
• Fossil fuels: 10.5%
• Negative net hydro capacity: −35.8% (reflecting pumped-storage flows)

Natural gas consumption: 557 million m³ (2023)Refined petroleum consumption: 51,000 barrels/day (2024)
Energy policy focuses on renewables, efficiency, and European grid integration.

Communications and Media

Luxembourg enjoys near-universal internet coverage (99%, 2024), with broadband penetration around 250,000 subscriptions. Fixed lines total about 260,000, and mobile subscriptions approach 961,000 (2023).
The country is home to the RTL Group, Europe’s largest private broadcasting network, and SES, one of the world’s leading satellite operators, cementing Luxembourg’s global influence in media and space communication.

Transport

Luxembourg possesses a dense and modern transport system integrated with neighbouring states. Railways extend 271 km, with 262 km electrified, linking major cross-border commuter routes to Belgium, France, and Germany.
There are 3 airports and 11 heliports (2025), and the merchant fleet registers 147 vessels (2023), primarily cargo and specialised ships. Luxembourg’s central European location supports significant logistics and motorway infrastructure, complemented by shipping access via the Moselle River.

Defence and Security

The Luxembourg Army, established in 1881, is a volunteer force of about 900 personnel (2025). There is no conscription, abolished in 1969. Recruitment is open to EU citizens resident for at least three years.
The armed forces contribute to NATO missions, EU operations, and UN peacekeeping, notably within the NATO battlegroup in Lithuania. Benelux air policing, operational since 2017, provides joint air-defence coverage. Defence spending, historically low, is projected to rise to 2% of GDP by 2025, aligning with alliance commitments.

Space Activities

The Luxembourg Space Agency (LSA), created in 2018, advances a commercially oriented space sector focusing on satellite operations, space communications, remote sensing, robotics, and data-driven services. Through programmes such as LuxIMPULSE, Luxembourg supports startups and global partnerships with ESA, the EU, and agencies in the US, Japan, and UAE.
The initiative builds upon the success of SES, positioning Luxembourg as a European leader in private-sector space innovation.

International Relations, Symbols, and Heritage

Luxembourg’s foreign policy is deeply multilateral, anchored in membership of the EU, NATO, OECD, IMF, World Bank, WTO, and the Schengen Area. Its compact size belies extensive diplomatic outreach, including embassies across Europe, the Americas, and Asia.
National Day (23 June) marks the Grand Duke’s official birthday. The flag features horizontal red, white, and light blue stripes, and the red rampant lion serves as the national emblem. Luxembourg maintains two anthems: Ons Heemecht (1864) as the national anthem and De Wilhelmus (1919) as the royal anthem.