Luxembourg perceived as a tiny state with deep pockets


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(AFP/ADW) As the national elections approach for Luxembourg this coming Sunday, all eyes turn to the country as it is put under the international media spotlight. 

One of the smallest countries in Europe as well as being perceived as one of the richest in the world, here's how Luxembourg is viewed from outside it's borders:

The country is the world's last Grand Duchy, smaller than Samoa or the US state of Rhode Island, and unfamiliar often even to those living in large neighbouring states like France and Germany not living near the border.

ECONOMY: As a major financial centre, with banking and insurance services, Luxembourg underpins a sector that accounts for about 27 percent of gross domestic product (GDP) according to the CIA World Factbook.

Tax advantages that were extensively used in the past by foreign banks and residents have been trimmed back under pressure from the European Union and the Organisation for Economic Cooperation and Development (OECD) however.

The Grand Duchy has been chosen as a global or European headquarters site by companies like Amazon, ArcelorMittal and Skype, and has solid industrial and information technology sectors based on communications, media, transport and logistics, steel production and trade.


Photo: Shutterstock

Gross national income (GNI) was $65,190 in 2012 based on purchasing power parity data from the World Bank, ranking Luxembourg seventh worldwide.

Overall GDP amounted to $57 billion, dropping it in a much more modest 72nd place, just behind Sudan.

EU data put unemployment at 6.9 percent in August 2013, less than half the 17-nation eurozone average of 12 percent.

Of Luxembourg's total workforce, 41.5 percent is comprised of people who live in neighbouring countries, and a full 65 percent are foreign born.

The total population was 537,039 in January 2013, of which more than 44 percent were foreigners, the highest proportion of any EU country.

HISTORY: The country formed part of the Holy Roman Empire until it was conquered by the French in 1795. In 1815 the Grand Duchy was formed under the house of Orange-Nassau, also sovereign of the Netherlands. In 1839 the Walloon (French)-speaking area was joined to Belgium. The link with the Netherlands was broken in 1890. Luxembourg has been a member of the Benelux grouping since 1947 and is one of the six founding members of the EU.

The European Court of Justice buildings in Kirchberg
Photo: Shutterstock

POLITICS: Luxembourg is a constitutional monarchy. Grand Duke Henri appoints a prime minister who commands a majority in parliament.

The current prime minister Jean-Claude Juncker, 58, is Europe's longest-serving leader who first took office in 1995.

Juncker is leading the battle for his Christian Social People's party in the forthcoming election. The party has been in power uninterruptedly since its creation in 1944, except for a brief period in opposition in the mid-1970s.

Luxembourg is also a founder member of the North Atlantic Treaty Organisation (NATO). It is home to the secretariats of the European Parliament, the European Investment Bank and the European Court of Justice.

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