Luxembourg Recent History

From a small state to an important promoter of European integration

After initially approved by Bismarck, but then unsuccessful attempts at affiliation by Napoleon III. which almost led to a war between France and Prussia (Luxembourg question), Luxembourg was neutralized by the great powers in the London Treaty of May 11, 1867. A large part of the fortifications was razed (1867–83). Until 1919, Luxembourg remained in the Zollverein with the German Empire. As with Grand Duke Wilhelm III. the Ottonian line of the House of Nassau-Orange died out, followed in 1890 by Duke Adolf von Nassau from the Walramian line (annulment of the personal union with the Netherlands). With Wilhelm IV. (1905–1912), the son of Adolf, this line also became extinct in the male line of succession. His daughter Marie Adelheid succeeded the throne in 1912, but abdicated in 1919 in favor of her sister, Grand Duchess Charlotte (1919-64). In 1921, Luxembourg concluded a customs and economic union with Belgium.

In violation of Luxembourg’s neutrality, German troops occupied the country in both world wars (1914-18 and 1940-44). In contrast to the First World War, the grand ducal family and the state government went into exile in 1940 (mostly staying in London). Luxembourg was added to the Gau Moselland by the National Socialist regime. Liberated by Allied troops in 1944, the country was hit again by the German Ardennes offensive (1944/45) and suffered severe damage. In April 1945 Grand Duchess Charlotte returned to Luxembourg.

A member of the UN since 1945, according to Allcitycodes, Luxembourg became a founding member of the Brussels Pact (1948), the OEEC (1948) and the OECD that emerged from it (1960). After relinquishing its neutrality obligation (1948), Luxembourg joined NATO and the Council of Europe in 1949 and was a co-founder of the coal and steel union in 1951 and of the EEC and EURATOM in 1957. In 1964, Grand Duke Jean became head of state. After four cabinets under the Christian-social politician P. Werner(Prime Minister 1959-74), a social-liberal coalition ruled under G. Thorn (1974-79); after the election victory of the PCS / CSV was Werner 1979–84 again head of government, replaced by his party colleague J. Santer (1984–95). In March 1993 the parliament passed a new banking law (combating money laundering, restrictions on banking secrecy). When Santer became President of the European Commission in 1995, J.-C. Juncker (PCS / CSV) succeeds him as Prime Minister.

After the governing coalition of PCS / CSV and POSL / LSAP lost votes in the parliamentary elections on June 13, 1999, Juncker initially announced his resignation, but was again entrusted with the office of head of government (from August 1999 at the head of a coalition of PCS / CSV and PD / DP).

Grand Duke Jean, one of the longest serving monarchs in Europe, abdicated on October 7, 2000, followed by his eldest son Henri as head of state. Junckers’s party, the PCS / CSV, also emerged victorious from the 2004 and 2009 parliamentary elections; both times he formed a coalition as head of government with the POSL / LSAP. On February 19, 2008, the Chamber of Deputies made active euthanasia with strict conditions unpunished. Grand Duke Henri conscientiously refused to approve the law in December 2008. In order to avoid a constitutional crisis, he proposed an amendment to the constitution, with which the Grand Duke’s previously formally existing right of veto against laws was repealed.

Due to the global economic and financial crisis, the gross domestic product shrank by 3.4% in 2009. In order to reduce the national debt, Prime Minister Juncker announced on May 5th, 2010 a rigorous austerity program. In October 2011, Luxembourg provided part of the guarantees for a bad bank, into which risk papers from the Belgian-French bank Dexia are being outsourced. The governments of Luxembourg, Belgium and France agreed to break up and partially nationalize the financial institution.

In 2012, the heir to the throne of Luxembourg, Hereditary Grand Duke Guillaume (* 1981) married Countess Stéphanie de Lannoy (* 1984) from Belgium.

After a secret service affair and the lack of support from the coalition partner POSL / LSAP, Juncker proposed to Grand Duke Henri on July 11, 2013 that parliament should be dissolved in order to bring about early elections. In the election on October 20, 2013, the PCS / CSV was able to assert itself as the strongest force with 33.7% (2009: 38%). On October 25, 2013, Grand Duke Henri entrusted the chairman of the PD / DP, X. Bettel, with forming a government. He was sworn in as the new Prime Minister on December 4, 2013 at the head of a coalition of POSL / LSAP, PD / DP and Déi Gréng / Die Grünen.

In the European elections on May 25, 2014, the PCS / CSV prevailed as the strongest force, as in 2009, and increased its share of the vote from 31.1 to 37.7%.

The so-called »Luxembourg Leaks Affair«, which was triggered by the publication of tax agreements between Luxembourg and international corporations by investigative journalists, intensified criticism of the country’s tax policy. The accusation was raised that Luxembourg favored or promoted tax avoidance strategies of companies. In this context, J.-C. Juncker, now President of the EU Commission, is under political pressure. In November 2014, a motion of no confidence against him in the European Parliament failed. The EU Commission had already initiated an investigation against Luxembourg in June 2014. In 2015, Luxembourg abolished banking secrecy and also participated in the EU-wide exchange of information on savings tax.

In a referendum held on June 7th, 2015, a majority of Luxembourgers rejected the government’s support for the introduction of the right to vote for foreigners. A lowering of the voting age from 18 to 16 years was also refused. In the 2018 parliamentary elections, all major parties (PCS / CSV, POSL / LSAP and PD / DP) recorded losses, while Déi Gréng (The Greens, + 5 percentage points to 15.1%) rose. The right-wing conservative ADR was the fifth strongest force (8.3%). PD / DP, POSL / LSAP and Gréng agreed on December 3, 2018 to continue their coalition under X. Bettel (PD / DP).

In the European elections on May 26th, 2019, PD / DP and Gréng won additional votes (+6.7 to 21.4% and +3.9 to 18.9%), while the conservative PCS / CSV, which had always been the strongest up until then Party in those elections was down 16.5 percentage points of the vote to 21.1%.

Luxembourg Recent History