Country Data Luxembourg
Luxembourg is a founding member of the European Union, with Luxembourg City as its capital and French and German as its official EU languages. The country has been part of the EU since 1 January 1958 and adopted the euro in 1999 as a founding member of the euro area. Luxembourg has also belonged to the Schengen area since 1995, playing a central role in the development of border-free travel within Europe. Despite its small geographic size and population, Luxembourg consistently ranks among the EU’s highest countries in GDP per capita measured in purchasing power standards, reflecting its strong economic performance.
Politically, Luxembourg is a parliamentary constitutional monarchy, officially known as the Grand Duchy. Executive authority is exercised by the government, led by the prime minister, while the Grand Duke serves as head of state with largely ceremonial functions. Legislative power lies with a single-chamber parliament, the Chamber of Deputies, whose 60 members are elected every five years. Administratively, the country is divided into four electoral regions, 12 cantons, and 105 communes, 12 of which have city status. Luxembourg City holds particular significance at the European level, as it is one of the three official seats of the EU institutions, alongside Brussels and Strasbourg. In addition to French and German, Luxembourgish is recognized as a national language, reflecting the country’s multilingual identity.
Luxembourg’s economy is highly developed and strongly service-oriented. In 2020, financial and insurance services formed the backbone of economic activity, underlining Luxembourg’s role as a leading European financial centre. Wholesale and retail trade, transport, accommodation, and food services also played a significant role, as did public administration, defence, education, healthcare, and social services. Trade is overwhelmingly oriented toward the European Union, which accounts for the vast majority of Luxembourg’s exports. Germany, France, and Belgium are the country’s most important trading partners, while exports to non-EU countries such as the United States and the United Kingdom represent a comparatively small share. Imports follow a similar pattern, with most goods sourced from neighbouring EU member states, particularly Belgium, Germany, and France, alongside limited volumes from countries such as the United States and Japan.
Within the European Union, Luxembourg is deeply embedded in institutional and political processes. It is represented by six Members of the European Parliament and actively participates in the work of the Council of the EU, where its government representatives contribute to the adoption of EU legislation and policy coordination. Luxembourg has held the rotating Presidency of the Council of the EU on several occasions, including during the early decades of European integration, highlighting its long-standing commitment to the European project.
At the level of the European Commission, Luxembourg is represented by its nominated Commissioner, currently responsible for jobs and social rights. The country is also active in EU advisory bodies, with five representatives each on the European Economic and Social Committee and the European Committee of the Regions, ensuring that social, economic, and regional perspectives are taken into account in EU decision-making.
Luxembourg maintains a permanent representation to the European Union in Brussels, which serves as the main channel for communication with EU institutions and for advancing national interests within the EU framework. As a highly prosperous member state, Luxembourg contributes to the EU budget in line with its economic capacity. These contributions help finance EU-wide programmes and projects that support employment, social cohesion, innovation, and sustainable development across all member states, reflecting Luxembourg’s strong commitment to shared European priorities.
