After
World War II, Luxembourg abandoned its politics of
neutrality, when it became a founding member of the
North Atlantic Treaty Organization (NATO) and the
United Nations. It is a signatory of the
Treaty of Rome, and constituted a monetary union with Belgium (
Benelux Customs Union in 1948), and an economic union with Belgium and the Netherlands, the so-called
BeNeLux. Between 1945 and 2005, the economic structure of Luxembourg changed significantly. The crisis of the metallurgy sector, which began in the mid-1970s and lasted till the late 1980s, nearly pushed the country into economic recession, given the monolithic dominance of that sector. The Tripartite Coordination Committee, consisting of members of the government, management representatives, and trade union leaders, succeeded in preventing major social unrest during those years, thus creating the myth of a “Luxembourg model” characterised by social peace. Although in the early years of the 21st century Luxembourg enjoyed one of the highest GNI per capita in the world, this was mainly due to the strength of its financial sector, which gained importance at the end of the 1960s. Thirty-five years later, one-third of the tax proceeds originated from that sector. The harmonisation of the tax system across Europe could, however, seriously undermine the financial situation of the grand duchy. Luxembourg has been one of the strongest advocates of the
European Union in the tradition of
Robert Schuman. It was one of the six founding members of the European Coal and Steel Community (ECSC) in 1952 and of the
European Economic Community (EEC) (later the European Union) in 1957; in 1999 it joined the
euro currency area. Encouraged by the contacts established with the Dutch and Belgian governments in exile, Luxembourg pursued a policy of presence in international organisations. In the context of the Cold War, Luxembourg clearly opted for the West, having joined NATO in 1949. Engagement in European reconstruction was rarely questioned subsequently, either by politicians or by the greater population. Despite its small size, Luxembourg often played an intermediary role between larger countries. This role of mediator, especially between the two large and often bellicose nations of Germany and France, was considered one of the main characteristics of its national identity, allowing the Luxembourgers not to have to choose between one of these two neighbours. The country also hosted a large number of European institutions such as the
European Court of Justice. Luxembourg's small size no longer seemed to be a challenge to the existence of the country, and the creation of the
Central Bank of Luxembourg (1998) and of the
University of Luxembourg (2003) was evidence of the continuing desire to become a “real” nation. The decision in 1984 to declare
Luxembourgish the national language was also a step in the affirmation of the country's independence. In fact, the linguistic situation in Luxembourg was characterised by trilingualism: Luxembourgish was the spoken vernacular language, German the written language, in which Luxembourgers were most fluent, and French the language of official letters and law. Between 1984 and 1986, the country became victim to a
mysterious bombing spree, which was targeted mostly at electrical masts and other installations, without claiming any lives. The perpetrators of what would become known as the "Bommelëer Affair" were never identified. In 1995, Luxembourgish Prime Minister
Jacques Santer was appointed
president of the
European Commission as a compromise candidate after the nomination of Belgian Prime Minister
Jean-Luc Dehaene was vetoed by
John Major. Santer and his commission later had to resign in March 1999 over corruption accusations against some commission members. Prime Minister
Jean-Claude Juncker, followed this European tradition. On 10 September 2004, Juncker became the president of the group of finance ministers from the 12 countries that share the euro, a role that led him to be dubbed "Mr Euro". On 24 December 1999,
Grand Duke Jean announced his decision to abdicate the Luxembourgish throne in favour of his son,
Henri, who had already served as regent since 4 March 1998. Henri was sworn in as Grand Duke on 7 October 2000, ending the 36-year reign of Jean, over which Luxembourg had seen major transformations. On 10 July 2005, after Prime Minister Jean-Claude Juncker had threatened to resign in case of a victory of the "no" vote, the proposed
European Constitution was approved by 56.52% of voters in a
referendum. In November 2012,
RTL and
d'Lëtzebuerger Land made allegations concerning misconduct and disorganisation within the
State Intelligence Service (SREL), including the transcript of a covertly recorded 2008 conversation between Juncker and SREL head Marco Mille which mentioned links between Grand Duke Henri,
MI6 and the Bommelëer Affair. The Chamber of Deputies then opened a parliamentary inquiry which revealed further misconduct, including illegal wiretapping operations, and concluded that Juncker should bear political responsibily for the SREL's actions. After the
LSAP pulled from Juncker's
coalition government on 10 July 2013, he announced his resignation and the organisation of
a snap election. Following the election, although Juncker's CSV remained the largest party, a coalition between the
DP,
LSAP and the
Greens was formed, with the CSV entering the opposition for the first time since 1979. The DP's
Xavier Bettel was sworn in as prime minister on 4 December 2013, succeeding Juncker - who at the time was the EU's longest serving leader - and becoming the world's
third openly gay head of government. In July 2014, the European Parliament elected Juncker as
President of the European Commission, making him the third Luxembourger to hold the post. He succeeded Portugal's
José Manuel Barroso, who had held the post since 2004, on 1 November 2014. Following the narrow victory of his liberal-led coalition in the
2018 general election, Xavier Bettel was sworn in for a second term in December of that year. The following year was marked by the death of
Grand Duke Jean on 23 April 2019 at age 98, which was followed by a 12-day period of national mourning and a funeral at
Luxembourg Cathedral. On 29 February 2020, in accordance with its 2018 coalition accord, the
Bettel II Government implemented
free public transport across Luxembourg, making it the first country in the world to implement the measure nationwide. The
October 2023 general election was marked by a sharp electoral defeat for the Greens, which failed to compensate for the DP and LSAP's gains and led to the Bettel II Government losing its majority. With the CSV having once again won the most seats, its leader, former minister
Luc Frieden, who returned to politics after a decade-long hiatus, was invited to form a government. The CSV formed a coalition with the DP, with Frieden being sworn in as Prime Minister on 17 November and Bettel remaining in government as
Foreign Minister and
Deputy Prime Minister. ==See also==