In 1957, Luxembourg became a founding member of the European Economic Community, the forerunner to the European Union (EU), and has since remained a keen supporter of European integration. The nation’s capital, the city of Luxembourg, has risen to prominence as the host to several key EU institutions including the European Investment Bank, the European Court of Justice, the Court of Auditors and, along with Strasbourg, the European Parliament. The city is also home to approximately 20 per cent of the total population and is, unsurprisingly, the country’s principal economic and administrative centre.

As specified in the 1984 Language Act, French is the language of legislation in Luxembourg, while German and the official national language, Luxembourgish, are also permitted for administrative and judicial use. In reality, Luxenbourgish, although widely spoken, is rarely used for written communication, while French and German are employed extensively for business and in the press, government and civil service. English is also taught in schools and is quite widely understood.

Luxembourg enjoys a stable economy, with low inflation and low unemployment and, according to figures published by the World Bank in autumn 2004, has the highest Gross National Income per capita in the world. During the last few decades there has been significant diversification within the industrial sector, which was previously based largely on iron and steel production, to include, most notably, chemicals and rubber. In addition, the overall contribution of the industrial sector to the economy has declined with the growth of the service sector, which is now responsible for employing over two-thirds of the workforce. In particular, Luxembourg is known for its financial services sector, which has developed at an unparalleled rate and is now the main driving force of the economy.

The country’s small domestic market inevitably means that Luxembourg is highly dependent on trade. In fact, exports account for approximately 90 per cent of output. The economy also depends heavily on other countries for workers, with nearly a third of the workforce being comprised of foreign and trans-border workers.

Luxembourg's international airport, Findel, is situated about 6 kilometres to the northeast of the capital and caters for flights to and from destinations throughout Europe, as well as in North America and Russia.