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Luxembourg (country), officially Grand Duchy of Luxembourg, country in western Europe, bounded by Belgium on the north and west, Germany on the east, and France on the south. With Belgium and The Netherlands, Luxembourg forms the Low, or Benelux, Countries. The country has an area of 2,586 sq km (998 sq mi).

Topographically, Luxembourg consists mainly of the upper basins of the Sauer (Sûre) and Alzette rivers. The highest point is Buurgplaatz (559 m/1,834 ft), in the Ardennes Plateau in the north. The southern two-thirds of the country is a rolling plateau, the Bon Pays. Rich deposits of iron ore are found in the south. Luxembourg has a moderate climate with a mean annual temperature of 10�C (50�F) and a yearly rainfall of about 815 mm (about 32 in).

The inhabitants of Luxembourg are mostly of German and French background but have a distinct national consciousness. The population of Luxembourg (2001 estimate) is 442,972, giving the country an overall population density of 171 persons per sq km (444 per sq mi). The principal cities are centers of industrial production. The capital and largest city is Luxembourg City, also known as Luxembourg-Ville, with a population (1998) of 79,500. Other important cities are Esch-sur-Alzette (population, 1998 estimate, 24,600), Differdange (16,800), and Dudelange (16,400).

Roman Catholics are 97 percent of the inhabitants of Luxembourg. The national language, called Letzeburgesch (Luxembourgisch), is a Germanic language. French and German are also used in official publications and in schools. Education is compulsory for all children between the ages of 6 and 15, and illiteracy is almost nonexistent. The University Center of Luxembourg (1969) is situated in Luxembourg City, and the country also has several schools of music and technology.

Luxembourg is one of the world�s most industrialized countries and has a high standard of living. In 1999 the gross national product was $19.3 billion, or $44,740 per person. The national budget in 1997 included revenue of $7.5 billion and expenditure totaling $6.7 billion.

Banking, manufacturing, agriculture, and tourism are the most important economic sectors. Major manufactures include iron and steel, processed food, rubber and plastic products, metal and machinery products, paper and printing products, food products, and chemicals. In the early 1990s the annual production of pig iron totaled about 2.3 million metric tons and crude steel 3.1 million tons; dwindling iron resources and reduced demand for Luxembourg�s steel exports have weakened the metal industry since the mid-1970s. However, the growth of Luxembourg�s financial sector has compensated for the steel industry�s diminishing importance. Agriculture plays a minimal role in the country�s economy. Principal crops include barley, wheat, potatoes, oats, rye, and wine grapes. Substantial numbers of cattle, hogs, and poultry are also raised.

Luxembourg and Belgium conduct their foreign trade as a single entity. The two countries entered into a customs and currency union in 1922, and in 1948 they formed the Benelux Customs Union (now the Benelux Economic Union) with The Netherlands. Chief Belgo-Luxembourg imports include fuels, ores and minerals, chemicals, machinery and electrical equipment, motor vehicles, nonprecious metals, transportation equipment, clothing accessories, and foodstuffs. In 1999 total value was $161 billion. Exports are mainly iron and steel manufactures, textiles, chemicals, machinery and transportation equipment, food and livestock, and cut diamonds. Total value was $176 billion in 1999. Germany, France, the United Kingdom, and the United States are the principal trading partners of Belgo-Luxembourg. Luxembourg became a member of the European Coal and Steel Community (ECSC) in 1951. Six years later, Luxembourg, France, Belgium, West Germany, Italy, and The Netherlands signed two treaties creating the European Economic Community (EEC), now the European Union (EU), and the European Atomic Energy Community (Euratom).

The monetary unit of Luxembourg is the single currency of the EU, the euro (1.07 euros equal U.S. $1; 1999 average). Luxembourg is among 12 EU member states to adopt the euro. The euro was introduced on January 1, 1999, for electronic transfers and accounting purposes only, and Luxembourg�s national currency, the Luxembourg franc, was used for other purposes. On January 1, 2002, euro-denominated coins and bills went into circulation, and the Luxembourg franc ceased to be legal tender.

Luxembourg has about 275 km (about 170 mi) of railroad and 5,189 km (3,224 mi) of roads. In 1999 the country had 724 telephone mainlines for every 1,000 people. There were 683 radios and 391 television sets for every 1,000 residents in 1997. The principal daily newspapers were the Lëtzebuerger Journal, Luxemburger Wort/La Voix du Luxembourg, Le Républicain Lorrain, and Zeitung vum Letzeburger Vollek, all published in the city of Luxembourg, and the Tageblatt/Zeitung fir Letzebuerg, printed in Esch-sur-Alzette.

The Grand Duchy of Luxembourg is a constitutional hereditary monarchy. The constitution, proclaimed in 1868 and later amended (especially in 1919), provides for a democratic government, with legislative power vested in a unicameral chamber of deputies composed of 60 members elected at least every five years by universal suffrage of persons aged 18 and older. The sovereign (the grand duke or grand duchess) has the constitutional right to organize the government, which consists of a prime minister, who is head of the government, and at least three other ministers. A council of state, appointed for life by the sovereign, acts in an advisory capacity. The three major political parties are the Christian Social Party, the Socialist Worker Party, and the Democratic Party. The country is divided into 12 cantons, each of which is subdivided into communes. A member of the North Atlantic Treaty Organization (NATO), Luxembourg maintains a small volunteer army consisting of about 900 members.

Under Roman rule, Luxembourg was included in the province of Belgica Prima; later it became a part of the Frankish kingdom of Austrasia and of Charlemagne�s empire.

In 1060 the country came under the rule of Count Conrad, founder of the house of Luxemburg, which provided the Holy Roman Empire with four emperors in the 14th and early 15th centuries before being superseded in 1437 by the Habsburg dynasty. For the next four centuries, Spain and Austria alternately dominated the country. At the close of the Napoleonic Wars in 1815, Luxembourg was established as a grand duchy by the Congress of Vienna and placed under the rule of William I, king of The Netherlands. In 1830 the Belgian provinces of The Netherlands revolted, and the grand duchy joined them. By the end of that year, Belgium had become an autonomous kingdom, and Luxembourg remained a part of the new country until 1839, when its western portion was ceded to Belgium and the remainder was recognized as a sovereign and independent state. The Dutch king retained nominal authority as grand duke. In 1842 Luxembourg became a member of the Prussian-led German customs union called the Zollverein, and for the next quarter-century the grand duchy was under Prussian domination. Napoleon III, emperor of France, opened negotiations in 1866 with William III, king of The Netherlands, for the purchase of Luxembourg, but the proposal provoked a dangerous crisis in Franco-Prussian relations. War was averted by an international conference held in London in May 1867, which adopted a treaty guaranteeing the independence of the grand duchy and providing for its perpetual neutrality. With the death of William III in 1890 the grand ducal crown passed to Adolf of the German house of Nassau.

German military forces occupied Luxembourg in August 1914, at the outbreak of World War I, and retained control of the country for the duration of the war. The grand duchy joined the League of Nations in 1920.

During World War II (1939-1945) Luxembourg was invaded by Germany on May 10, 1940. The reigning grand duchess, Charlotte, subsequently established a government-in-exile in London. In August 1942 the Germans proclaimed the grand duchy a part of the Third Reich.

Allied military forces liberated Luxembourg in September 1944, and the country was restored to civilian control. On June 26, 1945, it became an original member of the United Nations. An agreement establishing the Benelux Customs Union (now the Benelux Economic Union) among Belgium, The Netherlands, and Luxembourg, took effect on January 1, 1948. Under the terms of a constitutional amendment adopted later in 1948, Luxembourg abrogated its traditional neutrality. The same year the country became a founding member of the Brussels Treaty Organization and a participant in the European Recovery Program; it joined the North Atlantic Treaty Organization in 1949. Luxembourg signed the 1951 treaty creating the European Coal and Steel Community. In 1956 France agreed to assist in the electrification of the Luxembourg railroads; in exchange, the grand duchy permitted France to construct a canal along the Mosel River, which forms part of the Luxembourg border. Early in 1957, France, West Germany (now part of the united Federal Republic of Germany), and Luxembourg founded an international company to canalize the Mosel River. On January 1, 1958, the European Community (now called the European Union) went into effect, with Luxembourg as a founding member. In elections in 1959, the Christian Social Party won a plurality in the legislature, and Pierre Werner, a Christian Socialist, formed a coalition cabinet. Treaties transforming the Benelux nations into a full economic union went into effect on November 1, 1960. On May 4, 1961, Prince Jean, the heir apparent, was sworn in as governor by his mother, Grand Duchess Charlotte. The duchess abdicated on November 12, 1964; immediately afterward, Jean became grand duke.

The government of Prime Minister Werner resigned on October 29, 1968. In general elections in December, the Democratic Party made strong gains, and Werner formed a new government of Christian Socialists and Democrats. In general elections in 1974 the Democrats and Socialists made strong gains, and Gaston Thorn, a Democrat, became prime minister at the head of a Democratic-Socialist coalition. Werner headed another coalition government from 1979 to 1984, a period marked by a prolonged recession. After elections were held in June 1984, a Christian Social-Socialist Worker coalition led by Jacques Santer took office. Santer remained prime minister, but with a reduced majority after the elections of June 1989 and June 1994. In 1995 Santer resigned as prime minister and replaced Jacques Delors as president of the European Commission. Santer was succeeded by Jean-Claude Juncker as prime minister. Juncker has been returned to office in subsequent elections.