Luxembourg as a part of the European Union

In the aftermath of World War II, Europe was left devastated, economically, socially, and politically. The infrastructure was in ruins, economies had collapsed, and millions were displaced or impoverished. There were still significant political tensions, particularly between long-time adversaries such as France and Germany. Having experienced two world wars within thirty years, European leaders recognized the urgent need for a new system that could ensure lasting peace on the continent.

European leaders, influenced by the horrors of war, understood that extreme nationalism and isolationism had been key factors in the outbreak of conflicts. As a result, European leaders began to look for ways to avoid armed conflict in the future. The fundamental idea was that if European countries united their economies, it would become more difficult for wars to break out between them because they would have common interests.

One of the key figures in the founding of the European Union was Robert Schuman, a Franco-Luxembourgish politician and one of the "fathers" of European integration. Robert Schuman was born in 1886 in Luxembourg, he had a German-Luxembourg origin and grew up in the territory of Alsace-Lorraine, which had been annexed by the German Empire after the Franco-Prussian War of 1870. As a result, Schuman was educated under German authority, but after World War I, when Alsace-Lorraine was returned to France, he acquired French nationality. Schuman’s unique background, having lived in both France and Germany, gave him the insight to understand the importance of reconciliation between the two nations for the future of Europe.

In 1950, Schuman proposed a plan to pool French and German coal and steel production, industries critical to warfare, under a single authority. This proposal, known as the Schuman Declaration, laid the foundation for what would become the European Coal and Steel Community (ECSC), the first step towards European integration. Luxembourg, along with Belgium, Italy, the Netherlands, and the two key players, France and Germany supported this initiative.

The signing of the Treaty of Paris in 1951 officially established the European Coal and Steel Community (ECSC), institutionalizing Schuman’s vision. The ECSC was designed to create a common market for coal and steel, to prevent future wars by tying the economies of European countries together. Luxembourg was one of the original six members, known as "The Six," alongside Belgium, France, Germany, Italy, and the Netherlands.

This agreement marked the beginning of Luxembourg's formal participation in European cooperation. It benefited economically from the common market and politically by contributing to peace and stability in Europe.

The ECSC had succeeded in integrating several important sectors of the European economy and strengthening reconciliation between France and Germany, but there was a growing desire to extend cooperation to other sectors beyond coal and steel.

In 1957, the six founding members signed the Treaties of Rome, which established two new organizations: the European Economic Community (EEC) and the European Atomic Energy Community (Euratom). The EEC aimed to create a common market for goods, services, capital, and labor, while Euratom focused on the development of peaceful nuclear energy. 

Luxembourg played a vital role in these agreements, not only as a member but as a nation that continued to advocate for a stronger, unified Europe. 

A significant milestone in Luxembourg’s contribution to European integration came with the signing of the Schengen Agreement in 1985. Signed in the small Luxembourgish village of Schengen, the agreement initially involved five countries: France, West Germany, Belgium, the Netherlands, and Luxembourg. The Schengen Agreement eliminated border controls between the participating countries, allowing for the free movement of people.

The fact that this agreement was signed in Luxembourg is due to multiple factors. On the one hand, Luxembourg was to assume the temporary presidency of the EEC, so it would have the right to choose where the signing of the treaty would take place. On the other hand, Schengen is the only place where France and Germany share a border with a Benelux country, which made it a good choice.

The Single European Act, signed in 1986, marked the next step toward completing the internal European market. It aimed to remove barriers to the free movement of goods, people, services, and capital by 1992, thus paving the way for what we now recognize as the EU's single market. Luxembourg fully supported this development, which further enhanced its economic opportunities within Europe.

The Maastricht Treaty, signed in 1992 and coming into force in 1993, was one of the most critical moments in the history of European integration. It officially created the European Union, transforming the EEC into a political union and setting the framework for closer cooperation in foreign policy, security, and justice.

Luxembourg was one of the 12 original signatories, and the Maastricht Treaty introduced key innovations like European citizenship and laid the groundwork for the Economic and Monetary Union (EMU), which would eventually lead to the creation of the euro.

In 1999, the euro was introduced as a currency in the financial markets, and by 2002, euro notes and coins replaced national currencies in the participating countries, including Luxembourg. 

The Treaty of Lisbon, signed in 2007 and implemented in 2009, was another key reform of the EU, making its institutions more democratic and efficient. It also strengthened the role of the European Parliament, and Luxembourg once again supported the reforms, recognizing the importance of a more robust and representative European Union.

The EU continued to expand over the years. In 2004, it had one of its most important enlargements, with the entry of 10 countries, mostly from Central and Eastern Europe. In subsequent years, Romania, Bulgaria and Croatia also joined.