Polity: Parliamentary democracy
Population: 500,000
GNI/Capita: $50,061
Life Expectancy: 78
Religious Groups: Roman Catholic (predominant)
Ethnic Groups: Celtic, Portuguese, Italian, others
Capital: Luxembourg

Political Rights Score: 1
Civil Liberties Score: 1
Status: Free


Luxembourg further entered the embrace of a unified Europe early in 2002 after it adopted the euro as its official currency. However, it also faced intense criticism for blocking EU efforts to combat money laundering by maintaining its strict banking secrecy laws.

After centuries of domination and occupation by foreign powers, the small, landlocked Grand Duchy of Luxembourg was recognized as an autonomous, neutral state in 1867. After occupation by Germany in both world wars, Luxembourg abandoned its neutrality and became a vocal proponent of European integration. Luxembourg joined NATO in 1949, the Benelux Economic Union (with Belgium and the Netherlands) in 1948, the European Economic Community (later the EU) in 1957, and the European Monetary Union in 1999.

Luxembourg's multiparty electoral system is based on proportional representation. The prime minister and the cabinet exercise executive authority on behalf of the grand duke of Luxembourg. While the grand duke's role is largely ceremonial, he must sign all bills before they become law and he maintains the power to dissolve parliament. The government is appointed by the sovereign, but is responsible to the legislature. Luxembourg's current constitution, adopted in 1868, has been revised several times.

Grand Duke Henri officially opened a session of parliament in October 2001, the first time since 1877 that a member of the royal family has performed this duty. By the close of the year, Grand Duke Henri had received an 88 percent approval rating since his father abdicated his 36-year reign as constitutional monarch and handed over power to his son in September 2000.

In January, a French parliamentary committee criticized Luxembourg for blocking EU efforts to combat money laundering. They recommended the EU take action against Luxembourg to force it to reform its notoriously strong banking secrecy laws.

Political Rights and Civil Liberties

Luxembourgers can change their government democratically. Voting is compulsory for citizens, and foreigners may register to vote after five years of residence. The prime minister is the leader of the dominant party in the 60-member, unicameral Chamber of Deputies (parliament), for which popular elections are held every five years. The grand duke appoints the 21 members of the Council of State, which serves as an advisory body to the chamber. In the June 1999 parliamentary elections, the Christian Social People's Party (PCS) won 19 seats; the Democratic Party (PD), 15; the Socialist Workers' Party of Luxembourg (POSL), 13; the Committee for Democracy and Pensions (ADR), 7; the Green Alternative (PVA), 5; and the New Left Party (NL), 1.

The constitution provides for freedom of speech and of the press. Print media are privately owned, and all media are free of censorship. The government issues licenses to private radio stations. Radio and television broadcasts from neighboring countries are freely available. In April, the European Court of Human Rights ruled that the conviction and sentencing of Marc Thorne for quoting a newspaper report on corruption was a breach of Article 10 of the European Convention of Human Rights.

Although foreigners constitute one-third of the population, anti-foreigner incidents are infrequent. Luxembourg's population grew 12 percent in the 1990s, and it is expected to nearly double by 2025. EU citizens who reside in Luxembourg enjoy the right to vote and to run in municipal elections; minimum residency requirements are 6 years for voters and 12 years for candidates.

The constitution provides for freedom of religion, and the government respects that right in practice. Roman Catholicism is the predominant religion. There is no state religion, but the state pays the salaries of Roman Catholic, Protestant, Greek and Russian Orthodox, and Jewish clergy, and several local governments subsidize sectarian religious facilities. The Anglican Church and Muslim community applied for financial support, but after four years of government consideration, these religious groups have yet to receive any financial support.

All workers have the right to associate freely and to choose their representatives. Approximately 57 percent of the labor force is unionized. Unions operate free of governmental interference. The two largest labor federations are linked to, but organized independently of, the POSL and PCS. The right to strike is constitutionally guaranteed. The law mandates a maximum workweek of 40 hours for full-time employees.

The independent judiciary is headed by the Supreme Court, whose members are appointed for life by the grand duke. Defendants are presumed innocent. They have the right to public trials and are free to cross-examine witnesses and to present evidence in court.

Women are underrepresented in government and politics. They constitute approximately 16 percent of parliament, holding 10 of the 60 seats. Women constitute 38 percent of the workforce. The law mandates equal pay for equal work and encourages the equal treatment of women. According to the International Confederation of Trade Unions, however, Luxembourg, with the highest per capita income in the EU, has one of the widest gender-pay gaps in the EU. The differences are least in the highest-paid professions and more substantial at lower salary levels. To date, there have been no work-related discrimination lawsuits in the courts.

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