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Economy & Finance
The economic performance of the Grand Duchy was among the best in Europe during the second half of the 20th century. Luxembourg owes its wealth to the discovery of iron ore in the southern area of the country called the Minett. Today, the vibrant expansion of the financial centre, the emergence of new service activities and leading-edge industrial companies characterize Luxembourg’s economy. The economy is also characterized by a calm and peaceful social climate.
The importance of agriculture, wine growing and forestry for the Grand Duchy’s economy has steadily declined over the years. Statec figures for 2005 show Luxembourg’s agriculture accounting for just 0.4% of the total value added at market prices, while it amounted to around 4% a quarter of a century ago. Nevertheless, the output of this sector has almost tripled in the past 25 years.
Moreover, this phenomenon is not peculiar to Luxembourg’s agriculture, but can also be observed in the European Union as a whole. The shrinking role played by agriculture in Luxembourg’s GDP is mainly due to the expansion of the service sector and particularly, banking, telecommunications, air-transport and audio-visual services. Today’s agriculture is more aware of environmental issues and contributes to protecting the natural habitat.
The early stages of Luxembourg’s industrial development were dominated by the steel industry in the mid-19th century. This domination continued until the 1974-1975 oil crisis, which transformed Luxembourg’s industrial habits and encouraged a service economy.
The emergence of the service sector was accelerated by the trend towards outsourcing, which involves shifting certain services to specialist sector companies.
Industrial diversification seems to be establishing itself as a permanent objective of economic policy. It has encouraged the emergence of a second industrial pole that includes the chemical industry and that of rubber and plastics.
In 2001, Arbed, Usinor and Aceralia merged and together they became the first steel industry in the world : Arcelor. In 2006, Arcelor merged with Mittal Steel to form the new global steel giant Arcelor-Mittal.
The media, communication and the audiovisual industry
As a multilingual country located at the crossroads of the French- and German-speaking cultures, Luxembourg plays a special role on the European media scene. The Grand Duchy is home to two giants in the world of audiovisual communication : Europe’s leading commercial broadcaster RTL Group, and the satellite company Société européenne des satellites (SES), which operates the Astra satellites.
Many small and medium-sized businesses, active in the converging fields of multimedia and telecommunications, have been set up in Luxembourg around these two pillars of audiovisual communication, forming a network of skills that is driving future economic development.
Besides the small and medium-sized businesses, some multinational companies of the New Economy, like AOL, Amazon and iTunes Music Store established their offices in Luxembourg in 2004.
The Luxembourg government is pursuing an active policy of developing audiovisual and communication services under the banner of Mediaport Luxembourg. To this end, the potential offered by the movement towards liberalising the European telecommunications market and the progress of technology are lending support.
As part of this proactive policy, Luxembourg adopted a number of public support schemes in the early 1990s to encourage the development of audiovisual production.
A financial centre
The establishment of the Luxembourg Stock Exchange and the 1929 laws on holding companies marked the beginning of international development in the financial sector. The Eurobond market of the 1960s contributed to the emergence of real banking know-how in Luxembourg.
The country’s current cash and asset management activities testify to Luxembourg’s adaptable approach to its development as a financial centre. The real expansion of Luxembourg’s collective investment undertakings (organismes de placement collectif – OPC) dates from 1983, with the first law regarding unit trust companies (sociétés d’investissement à capital variable – sicav).The net assets of collective investment undertakings rose from 2 billion euros in 1970 to 1 702.2 billion euros in April 2006 (Source : CSSF), taking Luxembourg to the first place in Europe for unit trust asset management.
Economy and Finances in Luxembourg
Ministry of Economy
Ministry of Finacne
Ministry of Labour
Luxembourg for Finance
Chamber of Commerce
Doing business in Luxembourg
The History of Industry in Luxembourg