Luxembourg: Facing up to harder times
Luxembourg was in at the start of European unity and is as committed to it as ever. But the things that have made the Grand Duchy great - tax advantages, strict banking secrecy, the Luxfranc bond market and the absence of minimum bank reserve requirements - look likely to be swept away by the tide of EU harmonization. Philip Eade reports on Luxembourgeois bankers' bullishness in the face of adversity
The Grand Duchy of Luxembourg, strategically placed at the conjunction of the most prosperous parts of Belgium, France and Germany, has long benefited from this culturally neutral niche. It is also proud of its role as one of the six founders of the EU. But as Luxembourg and the other qualifying EU member states prepare for monetary union, there are undercurrents of concern in the Grand Duchy about the threat to its thriving financial centre from a single currency and other harmonization proposals.