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The Foundation of Luxembourg

The name Luxembourg first appeared in 963, in a barter between Count Sigefroid and the Saint Maximin abbey in Trier. Sigefroid became the owner of a rock on which he had a fortified castle built. A city grew around this site and then a country, so that Sigefroid is considered the founder of Luxembourg.Luxembourg remained a relatively independent principality attached to the German Empire until 1354. The country then lost its status as earldom and was elevated to that of duchy, also and importantly acquiring the earldom of Chiny. From the 13'th century, Luxembourg started to develop into a true principality.

From the dukes of Burgundy to the Netherlands

The dynasty of the counts of Luxembourg died out in 1437 and the flame passed on to the Hapsburgs of Spain. Luxembourg’s acquisition by Philip the Good of Burgundy in 1443 proved decisive in its destiny. Incorporated in the Burgundian state and then in the Netherlands, Luxembourg became an intermediary between the kingdom of France and the German Empire. The death of Charles the Bold, Philip the Good’s son, put an end to the Burgundian era, and the principalities of the North passed to the Austrian Hapsburgs in 1715. They formed a confederation called the Netherlands, to which Luxembourg belonged until 1839. Luxembourg was incorporated into the French Republic in 1795, and was given the name “Département des Forêts” (Department of the Forests). It had already been under French occupation during the reign of Louis XIV, during which time Vauban fortified the City of Luxembourg.

Luxembourg as an Independent Country

The Congress of Vienna elevated the Duchy o Luxembourg to the rank of Grand Duchy in 1815, theoretically making it independent, while linking it by personal union to the Netherlands. The two were recognized as separate countries but ruled by the same sovereign: William I of Orange-Nassau, King of the Netherlands, Grand Duke of Luxembourg. The 1839 Treaty of London marked the starting point of Luxembourg’s history as an independent country. It cut Luxembourg in two, giving the French-speaking half to Belgium, while the German-speaking half continued to form the Grand Duchy. It was from that moment on that Luxembourg’s national identity truly came to be forged, in particular with the appearance of its first national anthem in 1859. But Luxembourg realized it could not be self-sufficient. So William II integrated it into a customs union with Germany, the “Zollverein” in 1842.

The Progress of the Grand Duchy up to World War II

The country enjoyed strong economic growth during this period, with the discovery of mining fields and the building of railways to carry coal (Luxembourg forms a large coal basin with Lorraine). The rising demand for labour led to heavy immigration. The personal union between Luxembourg and the Netherlands ended in 1890 with the death of the last male descendant of the Orange-Nassau line, and the crown passed to the Nassau-Weilburg branch, the only Nassovian line with a male descendant. It was then that Luxembourg finally gained its own dynasty, with Grand Duke Adolf as the country’s first representative. Germany’s unsuccessful attempt to annex Luxembourg in 1914, which risked violating the neutrality of the country had enjoyed since 1867, incited Luxembourg to gain its independence and to leave the Zollverein. The Grand Duchy thus entered into an economic union with Belgium in 1921, known as the Belgo-Luxembourg Economic Union (BLEU). It subsequently adopted the Belgian franc as the Union’s currency, while keeping the Luxembourg franc in limited issue.

The Interwar Years

The economic depression of the immediate postwar years was followed by a period of prosperity. But from 1929, Luxembourg was affected by the world economic crisis. In the steel sector, it looked, above all, to France as a supplier of iron ore, and to Germany as a market for its steel products.

World War II and reconstruction within the European Union

During the Second World War, Luxembourg suffered forced germanization at the hands of its German occupier. Moreover, 2% of the total population lost their lives during World War II (1,5% in France). This trauma was the source of a powerful desire for regeneration. Economic opening to the outside world became the Grand Duchy’s priority. Needing to form part of a larger market, Luxembourg abandoned its neutrality, becoming a founding member of UNO in 1945 and a member of NATO in 1949. The Belgo-Luxembourg Economic Union, which had come to an end under the occupation, was reinstated after the liberation. Luxembourg became member of the European Coal and Steel Community (ECSC) in 1951 – since the steel industry accounted for 75% of its industrial output – and of the European Economic Community (EEC) in 1957. The ECSC became the foundation for a new period of growth, while membership of the EEC marked the starting point of economic expansion. As the first workplace of the ECSC, the City of Luxembourg became one of the three headquarters of the European Union, alongside Strasbourg and Brussels. The birth of a large financial centre, accompanied by the intensification of Luxembourg’s integration in the European Union, made it one of Europe’s most cosmopolitan cities from the 1960s onwards. Luxembourg’s financial centre also enabled the country to overcome the 1974-75 steel crisis. Today, Luxembourg is strongly represented on the international stage, where it plays an active role, particularly in the field of cooperation with aid to developing countries. Foreigners account for 38% of Luxembourg’s population. It is also considered a microcosm of Europe and a model of opening to the outside world.