LUXEMBOURGH ECONOMY

Luxembourg Economy

Introduction

Situated at the heart of Europe, Luxembourg is the smallest member of the European Union and the only Grand Duchy in the world. Independent since 1839, it is a constitutional monarchy, governed by Prime Minister Jean-Claude Juncker. The head of state is Grand Duke Henri.

As founding member of the European Union, Luxembourg is a member of all the principle international organisations. It combines strategic location and openness towards the outside world, with political, economic and social stability with a high quality of life. With its small territory of just 2.586 square km and a population of 509.000 with more than 40% foreigners, Luxembourg has established a highly industrialised and an increasingly service-based economy. Among those services, the financial services sector stands out and stirs the economy. The success of the financial sector is grounded in the social and political stability of the Grand Duchy and in a modern legal and regulatory framework that is continuously updated by regular consultation between the government, the legislator and the private sector. As a result the biggest share of Luxembourg GDP comes from the finance sector (Sheehan, 2009).

At the same time, Luxembourg acts as gateway into Europe for new businesses. Many of those operating in leading sectors of the economy such as ICT, e-commerce and media-businesses have already settled in this particularly business friendly climate. Political stability, good communication infrastructure, state-of-the-art and ultra-secure connectivity infrastructure, easy access to other European centres and skilled multilingual workforce have helped Luxembourg's increasingly service-based economy to maintain its health.

Luxembourg Economy

Luxembourg owes its economic expansion to the steel industry which dominated the economy of the country from the beginning of the 20th century until the 1970s. Today, the country is still an important player in the world steel market, since the capital hosts the seat of Arcelor-Mittal, the number one steel producer in the world. Since the 1950s, international industrial groups such as Goodyear, Guardian Luxguard, Delphi Automotive or DuPont de Nemours have set up business in Luxembourg.

Service sector

Today, Luxembourg is an important media and communications centre, hosting the seat of RTL Group, the premier audiovisual group in Europe with 45 television channels, 31 radio stations in 11 countries, and SES Global, which, with a fleet of more than 40 satellites, is the largest satellite operator in the world. Luxembourg has transformed itself into one of Europe's top locations for ICT infrastructures.

E-commerce

Luxembourg was also the first country to ...