Country Details

The Luxembourg Stock Exchange (French: Bourse de Luxembourg) is a stock exchange based in Luxembourg City, in southern Luxembourg.

The Exchange is located at 35A boulevard Joseph II. The Chairman of the Board is Frank Wagener and the President of the Executive Committee and Chief Executive Officer is Robert Scharfe.

The Exchange has pre-opening sessions from 07:15am to 09:00am and normal trading sessions from 09:00am to 05:35pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.

It specialises primarily in the listing of international bonds, in which it is ranked first in Europe, with 26,684 debt securities listed on the Exchange as of 2013. The Luxembourg Stock Exchange was the first exchange to list a Eurobond, with the issue of Italian Autostrade bonds in 1963, and, to this day, Luxembourg has maintained a dominant position in European bond issues, with approximately 40% of all cross-border securities in Europe being listed in Luxembourg. Seventy countries list at least some of their sovereign debt in Luxembourg, whilst Luxembourg is also a market for debt from the EBRD, European Commission, European Investment Bank, and World Bank.

Financial Crisis

Little Luxembourg was badly shaken both by the global financial crisis and by the home-made constitutional crisis in the last quarter of 2008.

The international financial crisis nearly threw into bankruptcy the two biggest private banks of the country. Both banks represented not only national pride in finance matters: long expertise and a high prestige doped with ‘ triple A’-ratings. “Dexia-Bil”, the oldest bank of the Grand Duchy, and “Fortis” formerly “Banque Générale du Luxembourg” are of focal importance for the national economy. Had they disappeared, the consequences for the national economy could not have been worse, as Jean-Claude Juncker put it in a TV address to his fellow citizens. In both cases, heavy losses of the Belgian or French mother agencies brought their Luxembourg daughter agencies big trouble. Only concerted action by the Belgian and Luxembourg government and at a certain moment also by the Dutch government – did save those two banks from bankruptcy. A strong public intervention could persuade new investors to take participation in the banks’ capital. Hence, the Luxembourg state became a major shareholder of the banks and could rely on accurate public reaction to sign public bonds in order to finance the operation, at least partially.

Luxembourg’s Treasury Minister, Luc Frieden, also had to deal with the problems of the Luxembourg daughter agencies of the bankrupt Icelandic banks in order to help the employees and save the saver’s interests. Most recently, Luxembourg’s investment fund industry, one of the best performing in Europe, has come into troubled waters with the ‘ Madoff financial scandal’ At this moment it is still too early to foresee and document all the consequences and implications.

Until the very last moment, Luxembourg bank managers tried to make the larger public believe that the international banking crisis could be confined to the US. Unfortunately, this policy soon revealed to be a fairy tale and had to be attributed to a certain extent to some bank managers’ incompetence. In this way, the financial crisis might have been foreseeable, but the constitutional crisis hit Luxembourg totally unprepared.

Luxembourg’s monarchs, unlike Britain’s or Monaco’s royals, do not usually appear in the yellow press. Since the 1919 constitutional reform, when universal suffrage was introduced, the country has been a full-scale democratic state: a constitutional monarchy where the sovereign is supposed to reign, but not to govern.

Since the implementation of the 1868 constitution (when Luxembourg still was united with the Netherlands in a personal union – the Dutch King was at the same time Grand Duke of Luxembourg) the Grand Duke signed the laws and ordered their application through publication in the official bulletin. By signing a law already voted on in parliament, the monarch approved it ipso facto. By refusing to sign a bill already voted on, he could veto it and thereby prevent its implementation. Since the late 19th century, the written constitution is no longer in harmony with the current practice in Luxembourg, as the reigning Grand Dukes never used their right to veto a law already voted on.

In February 2008, a new law was passed in parliament making euthanasia, in certain controlled cases, legal. The Greens, Liberals and most Socialists approved it, whereas the Christian Democrats voted against it and were defeated, although they were a part of the ruling coalition. The Catholic church opposed the law all together with the most influential newspaper, the “ Luxemburger Wort” A few days before the second reading of the law, Grand Duke Henri informed the political leaders of the country that he would not sign the bill “ for reasons of conscience” Traditionally, the sovereigns have always maintained a position of political neutrality. This was the first time in Luxembourg’s history that a sovereign attempted to block a decision which had been agreed on in parliament.

The Prime Minister, who had been informed earlier about the Grand Duke’s decision, tried to convince the monarch to stick to the normal constitutional unwritten practice that his predecessors had always respected. Apparently, the Grand Duke’s decision was irrevocable. Juncker responded quickly by saying the country would change its constitution to reduce the powers of the sovereign: “Because we wish to avoid a constitutional crisis, but at the same time respect the opinion of the Grand Duke, we are going to take the term of ‘approve’ from article 34 out of the constitution and replace it with the word ‘promulgate’. The French newspaper “Le Figaro” called Juncker’s act a “constitutional Coup d’Etat”. The decision came after two hours of emergency talks with the political leaders who gave their support to the measure taken. A constitutional change would require a two-thirds majority in parliament. Being also opposed to the euthanasia bill, Juncker said: “ I believe that if parliament votes a law, it must be brought into force” Luxembourg’s Minister of Justice, Luc Frieden, said that the Grand Duke would no longer participate in the legislative process; he would just sign the law to mark the completion of the procedure”

Parliament passed a historic vote on 11 December 2008: with 56 votes and one abstention the revision of the article 34 of the constitution was approved. The amendment voted reads as follows: “ The Grand Duke enacts laws within three months of the vote of the house” According to article 114 of the constitution, any change in the constitution must be adopted by the “ Chamber of Deputies” in two successive votes with a minimum of a two-thirds majority and with an interval of at least three months between them. The text adopted at the first reading may, under certain circumstances, be subject to a referendum, which will replace the second vote of the house.

Henri’s the choice to refuse to put his signature to the law brought the Luxembourg’s monarchy question back into the discussion. The most recent polls in December 2008 show that only 62 percent of the Luxembourgers still want the monarchy to be preserved. Just after World War I, and a failed proclamation of the republic in 1919, a referendum proved that 80 percent of the Luxembourg people voted in favor of the new Grand Duchess Charlotte, the grandmother of the present Grand Duke, thus saving the monarchy. In 2005, 82 percent of the Luxembourg population could not even imagine living in a republic. In his New Year’s address Grand Duke Henri proclaimed: “ It was never my intention to stand against the will of the majority of the people’s representatives. That is a right to which I am not entitled!” Henri also dismissed the initiative of a citizens committee to organize a referendum on the constitutional amendment stripping the Grand Duke of his rights. He declares to support the constitutional reform fully. 

Luxembourg, once part of Charlemagne's empire, became an independent state in 963, when Siegfried, count of Ardennes, became sovereign of Lucilinburhuc (“Little Fortress”). In 1060, Conrad, a descendant of Siegfried, took the title count of Luxembourg. From the 15th to the 18th century, Spain, France, and Austria held the duchy in turn. The Congress of Vienna in 1815 made it a grand duchy and gave it to William I, king of the Netherlands. In 1839, the Treaty of London ceded the western part of Luxembourg to Belgium. The eastern part, continuing in personal union with the Netherlands and a member of the German Confederation, became autonomous in 1848 and a neutral territory by decision of the London Conference of 1867, governed by its grand duke. Germany occupied the duchy in World Wars I and II. Allied troops liberated the enclave in 1944.

Luxembourg joined NATO in 1949, the Benelux Economic Union (with Belgium and the Netherlands) in 1948, and the European Economic Community (later the EU) in 1957. In 1961, Prince Jean, son and heir of Grand Duchess Charlotte, was made head of state, acting for his mother. She abdicated in 1964, and Prince Jean became grand duke. Luxembourg's parliament approved the Maastricht Accord, paving the way for the economic unity of the EU in July 1992. Crown Prince Henri was sworn in as grand duke in Oct. 2000, replacing his father, Jean, who had been head of state for 26 years.

Famous People

The Luxembourgish franc (more commonly Luxembourg Franc or LUF, French: franc luxembourgeois, Luxembourgish: Lëtzebuerger Frang, German: Luxemburger Franken) was the currency of Luxembourg between 1854 and 1999 (except during the period 1941-44). The franc remained in circulation until 2002, when it was replaced by the euro. During the period 1999–2002, the franc was officially a subdivision of the euro (1 euro = 40.3399 francs) but the euro did not circulate. Under the principle of "no obligation and no prohibition", financial transactions could be conducted in euros and francs, but physical payments could only be made in francs, as euro notes and coins were not available yet.

The franc was subdivided into 100 centimes.

The conquest of most of western Europe by Revolutionary and Napoleonic France led to the French franc's wide circulation, including in Luxembourg. However, incorporation into the Netherlands in 1815 resulted in the Dutch guilder becoming Luxembourg's currency. Following Belgium's independence from the Netherlands, the Belgian franc was adopted in 1839 and circulated in Luxembourg until 1842 and again from 1848. Between 1842 and 1848, Luxembourg (as part of the German Zollverein) used the Prussian Thaler.

In 1854, Luxembourg began issuing its own franc, at par with the Belgian franc. The Luxembourg franc followed the Belgian franc into the Latin Monetary Union in 1865. In 1926, Belgium withdrew from the Latin Monetary Union. However, the 1921 monetary union of Belgium and Luxembourg survived, forming the basis for the full Belgium-Luxembourg Economic Union in 1932. In 1935, the link between the Luxembourg and Belgian francs was revised, with 1 Luxembourg franc = 1 1?4 Belgian francs.

In May 1940, the franc was pegged to the German Reichsmark at a rate of 4 francs = 1 Reichsmark. This was changed to 10 francs = 1 Reichsmark in July 1940. On 26 August 1940, the Reichsmark was declared legal tender in Luxembourg and on 20 January 1941, the Reichsmark was declared the only legal tender and the franc was abolished.[3] The Luxembourg franc was reestablished in 1944, once more tied to the Belgian franc at par.

The Luxembourg franc was fixed at 1 euro = 40.3399 francs on 1 January 1999. Euro coins and banknotes were introduced on 1 January 2002. Old franc coins and notes lost their legal tender status on 28 February 2002.