Travel TipsLuxembourg

ECONOMY

Luxembourg is one of the most prosperous countries in Western Europe. Two very different industries – banking and steel – have historically been the mainstays of the economy. The steel industry has ceased to be as dominant as other industries, notably chemicals, rubber, plastics, metal products and light manufacturing (textiles, paper, electronic equipment) have prospered. The banking and finance sector is also in a healthy condition: companies originally attracted to Luxembourg by favorable banking secrecy laws and low taxation have prospered despite the gradual harmonization of taxes and tariffs across the EU. There is also a small but healthy agricultural sector mainly producing crops. During 2001 and 2002, the economy grew at around 5 per cent annually – twice the average EU rate, with inflation of 3 per cent. The Luxembourgeois economy has long been linked with that of Belgium, initially through the 1921 economic union, supplemented by a further treaty in 1958 and latterly, by mutual membership of the EU. Luxembourg was an inaugural adopter of the Euro at the beginning of 1999. Belgium is the largest single trading partner, followed by The Netherlands and France.