Economic history of Luxembourg
The changes in the Luxembourg economic structure from the 19th century to the present can be described as a radical and extremely rapid change away from the dominant steel industry (1975: 25% of the total of all value added, 2001: 2%) to a service society. Today, Luxembourg is an important financial center and has the highest gross domestic product per inhabitant in the world (2002).
1839-1885
In 1840 Luxembourg was a small farming country. To break out of this poverty, Luxembourg joined the German customs union in 1842 . The construction of railway lines gave Luxembourg better transport links to Germany , Belgium and France .
1886-1918
In the south of Luxembourg there are plenty of iron ore deposits ( minette ), which could not be used efficiently until 1886, until the Englishman Sidney Thomas developed the Thomas process , which made it possible to melt iron ore rich in phosphorus . 1886 marked the start of the modern steel industry in Luxembourg. German capital and German labor helped build the industry. So slowly an agricultural state became an industrial state .
1919-1945
80% of industrial production was exported. As a member of the Zollverein, Luxembourg exported mainly to Germany. But after the First World War, Luxembourg had to give up this customs union for political reasons.
So in 1919 Luxembourg had to look for a new economic partner. In the referendum of September 20, 1919, the Luxembourgers were asked, among other things, to choose France or Belgium as their new economic partner. 73% of the population were in favor of France. But things turned out differently, on May 10, 1920, France informed the Luxembourg government that it had no intention of entering into an economic union with Luxembourg. So Luxembourg was forced to negotiate with Belgium. After lengthy negotiations, the UEBL (Union economique belgo-luxembourgeoise) was founded in 1921. It officially came into force in 1922. The UEBL led, among other things, that Luxembourg entered a monetary union with Belgium, which lasted until the introduction of the euro in 1999.
The Luxembourg iron industry had to adapt to the new circumstances. First, the companies' capital was restructured. German shareholders got out and Belgian and French shareholders joined them. As a result, the whole industry had to convert from a large domestic market (the market of the Zollverein) to a world market. 1929, the year of the Great Depression, was an important year for Luxembourg because, on the one hand, the Luxembourg Stock Exchange (Bourse de Luxembourg) was founded and, on the other hand, the Parliament (Chambre des Députés) passed a law on tax reductions for holding companies . This legislation provided the basis for what would later become the financial center of Luxembourg.
The 1930s are overshadowed by economic, social and political crises. Unions are formed, mass strikes are organized and the government tried to ban the communist party with the muzzle law.
1946-1949
In 1947 Parliament ratified the BENELUX Treaty, which led to the establishment of a customs union between Belgium, the Netherlands and Luxembourg.
1950-1974
As one of the most important steel producers in Europe, Luxembourg was a founding member of the ECSC ( European Coal and Steel Community ) in 1951 . France, Germany, Italy , the Netherlands, Belgium and Luxembourg agreed to place their coal and steel production under a supranational control body based in Luxembourg.
Since 1975
The economic structure, which used to be characterized by heavy industry and agriculture , had changed considerably since the early 1970s. The main employer at the time was the steel company ARBED , which was able to survive the steel crisis at the cost of reducing the workforce (from the beginning of the 1970s 27,000 to currently approx. 6,700) and rigorous modernization. Before the foreseeable decline in the importance of heavy industry, the Luxembourg government has consciously and successfully pursued a policy of diversification since 1975 , established new industries and, above all, promoted the banking and insurance sector with great success . Luxembourg has been a signatory to the Agreement on the European Economic Area ( EEA Agreement ) since January 1st, 1994 . In 2002 the euro was introduced as a means of payment. In January 2002, ARBED merged with USINOR (F) and ACERALIA (SP) to form the second largest steel group in the world, ARCELOR .
In 2006, after turbulent negotiations , the steel group ARCELOR merged with the steel giant MITTAL STEEL , creating by far the world's largest steel group. The seat remained in Luxembourg.
literature
- Marc Hübsch: Economic spatial possibilities and limits of an economic policy for the Grand Duchy of Luxembourg. RWTH Aachen 2004. ISSN 0587-4068