Luxembourg

The Grand Duchy of Luxembourg is a small country, landlocked by Belgium, France and Germany, and its history has been inextricably linked with that of its far larger neighbours.

Despite declaring its neutrality, Luxembourg was occupied by Germany during both World Wars.

Attempts to escape German influence initially led to an economic union with Belgium in 1921.
After renewed occupation in World War II, Luxembourg abandoned its neutrality and became a front-rank enthusiast for international co-operation.

Luxembourg became a founder member of a customs union with Belgium and the Netherlands in 1948, and of the European Economic Community, a fore-runner of the European Union, in 1957. Around one-third of Luxembourg's population are foreigners.

Luxembourg's prosperity was formerly based on steel manufacturing. With the decline of that industry, Luxembourg diversified and is now best known for its status as a tax haven and banking centre.

But Luxembourg's strict laws on banking secrecy mean the system can be exploited for the purposes of tax evasion and fraud.

Luxembourg's politics are characterised by stability and long-serving administrations.