Contemporary history of Europe

Luxembourg: A Country Survey

Beginning in the 20th century, Luxembourg experienced several periods of transition. The largely agriculture-based economy became industrialized, driven by a powerful steel industry which remained the dominant sector from the immediate post-Second World War years to the mid-1970s. The country had a considerable competitive advantage in this respect owing to iron ore deposits in Luxembourg itself and in the neighbouring French region of Lorraine. The industrial flagship was Aciéries Réunies de Burbach-Eich-Dudelange (ARBED), founded in 1911, which developed its production in Europe and established a global network of sales outlets. Between 1953 and 1968 the steel industry contributed approximately 25% of the country’s GDP growth, while steel production represented 50% of its added industrial value. Over the same period, the nominal wage grew by 29.3%. The improvement in living standards led to the emergence of the middle class and to an increase in urbanization. The Government improved the social security regime and extended it to all workers, thus helping to close the gap in social equality, raise living standards further and boost social cohesion in the country over the long term.

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