Luxembourg: Truth, Knowledge, History Of This European Nation

(THIS ARTICLE IS COURTESY OF THE CIA WORLD FACT BOOK)

 

Luxembourg

Introduction Founded in 963, Luxembourg became a grand duchy in 1815 and an independent state under the Netherlands. It lost more than half of its territory to Belgium in 1839, but gained a larger measure of autonomy. Full independence was attained in 1867. Overrun by Germany in both World Wars, it ended its neutrality in 1948 when it entered into the Benelux Customs Union and when it joined NATO the following year. In 1957, Luxembourg became one of the six founding countries of the European Economic Community (later the European Union), and in 1999 it joined the euro currency area.
History The recorded history of Luxembourg begins with the acquisition of Lucilinburhuc (today Luxembourg Castle) by Siegfried, Count of Ardennes in 963. Around this fort, a town gradually developed, which became the centre of a small state of great strategic value. In 1437, the House of Luxembourg suffered a succession crisis, precipitated by the lack of a male heir to assume the throne, that led to the territory being sold to Philip the Good of Burgundy.[3] In the following centuries, Luxembourg’s fortress was steadily enlarged and strengthened by its successive occupants, the Bourbons, Habsburgs, Hohenzollerns, and the French, among others. After the defeat of Napoleon in 1815, Luxembourg was disputed between Prussia and the Netherlands. The Congress of Vienna formed Luxembourg as a Grand Duchy in personal union with the Netherlands. Luxembourg also became a member of the German Confederation, with a Confederate fortress manned by Prussian troops.

The Belgian Revolution of 1830–1839 reduced Luxembourg’s territory by more than half, as the predominantly francophone western part of the country was transferred to Belgium. Luxembourg’s independence was reaffirmed by the 1839 First Treaty of London. In the same year, Luxembourg joined the Zollverein. Luxembourg’s independence and neutrality were again affirmed by the 1867 Second Treaty of London, after the Luxembourg Crisis nearly led to war between Prussia and France. After the latter conflict, the Confederate fortress was dismantled.

The King of the Netherlands remained Head of State as Grand Duke of Luxembourg, maintaining personal union between the two countries until 1890. At the death of William III, the Dutch throne passed to his daughter Wilhelmina, while Luxembourg (at that time restricted to male heirs by the Nassau Family Pact) passed to Adolph of Nassau-Weilburg.

Luxembourg was invaded and occupied by Germany during the First World War, but was allowed to maintain its independence and political mechanisms. It was again invaded and subject to German occupation in the Second World War in 1940, and was formally annexed into the Third Reich in 1942.

During World War II, Luxembourg abandoned its policy of neutrality, when it joined the Allies in fighting Germany. Its government, exiled to London, set up a small group of volunteers who participated in the Normandy invasion. It became a founding member of the United Nations in 1946, and of NATO in 1949. In 1957, Luxembourg became one of the six founding countries of the European Economic Community (later the European Union), and, in 1999, it joined the euro currency area. In 2005, a referendum on the EU treaty establishing a constitution for Europe was held in Luxembourg.

Geography Location: Western Europe, between France and Germany
Geographic coordinates: 49 45 N, 6 10 E
Map references: Europe
Area: total: 2,586 sq km
land: 2,586 sq km
water: 0 sq km
Area – comparative: slightly smaller than Rhode Island
Land boundaries: total: 359 km
border countries: Belgium 148 km, France 73 km, Germany 138 km
Coastline: 0 km (landlocked)
Maritime claims: none (landlocked)
Climate: modified continental with mild winters, cool summers
Terrain: mostly gently rolling uplands with broad, shallow valleys; uplands to slightly mountainous in the north; steep slope down to Moselle flood plain in the southeast
Elevation extremes: lowest point: Moselle River 133 m
highest point: Buurgplaatz 559 m
Natural resources: iron ore (no longer exploited), arable land
Land use: arable land: 27.42%
permanent crops: 0.69%
other: 71.89% (includes Belgium) (2005)
Irrigated land: NA
Total renewable water resources: 1.6 cu km (2005)
Freshwater withdrawal (domestic/industrial/agricultural): total: 0.06 cu km/yr (42%/45%/13%)
per capita: 121 cu m/yr (1999)
Natural hazards: NA
Environment – current issues: air and water pollution in urban areas, soil pollution of farmland
Environment – international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands
signed, but not ratified: Environmental Modification
Geography – note: landlocked; the only Grand Duchy in the world
Politics Luxembourg is a parliamentary democracy headed by a constitutional monarch. Under the constitution of 1868, executive power is exercised by the Governor and the cabinet, which consists of several other ministers. The Governor has the power to dissolve the legislature and reinstate a new one, as long as the Governor has judicial approval. However, since 1919, sovereignty has resided with the Supreme Court.

Legislative power is vested in the Chamber of Deputies, a unicameral legislature of sixty members, who are directly elected to five-year terms from four constituencies. A second body, the Council of State (Conseil d’État), composed of twenty-one ordinary citizens appointed by the Grand Duke, advises the Chamber of Deputies in the drafting of legislation.

The Grand Duchy has three lower tribunals (justices de paix; in Esch-sur-Alzette, the city of Luxembourg, and Diekirch), two district tribunals (Luxembourg and Diekirch) and a Superior Court of Justice (Luxembourg), which includes the Court of Appeal and the Court of Cassation. There is also an Administrative Tribunal and an Administrative Court, as well as a Constitutional Court, all of which are located in the capital.

People Population: 486,006 (July 2008 est.)
Age structure: 0-14 years: 18.6% (male 46,729/female 43,889)
15-64 years: 66.6% (male 163,356/female 160,425)
65 years and over: 14.7% (male 29,206/female 42,401) (2008 est.)
Median age: total: 39 years
male: 38 years
female: 40 years (2008 est.)
Population growth rate: 1.188% (2008 est.)
Birth rate: 11.77 births/1,000 population (2008 est.)
Death rate: 8.43 deaths/1,000 population (2008 est.)
Net migration rate: 8.54 migrant(s)/1,000 population (2008 est.)
Sex ratio: at birth: 1.07 male(s)/female
under 15 years: 1.06 male(s)/female
15-64 years: 1.02 male(s)/female
65 years and over: 0.69 male(s)/female
total population: 0.97 male(s)/female (2008 est.)
Infant mortality rate: total: 4.62 deaths/1,000 live births
male: 4.62 deaths/1,000 live births
female: 4.62 deaths/1,000 live births (2008 est.)
Life expectancy at birth: total population: 79.18 years
male: 75.91 years
female: 82.67 years

Italy’s Political Disaster Has World Financial Markets Running Scared

(THIS ARTICLE IS COURTESY OF CNBC)

 

Markets stabilize as Italian fears ease  

Political uncertainty in Italy has unhinged world markets, raising the specter of a euro crisis that could ripple across the global economy and even force the Federal Reserve to slow its rate-hiking plans.

Several strategists say there is little chance the euro zone’s third-largest economy will move to leave the single currency, creating a continent-wide crisis of confidence. But internal chaos and a new election could make for a rocky summer for markets and even put a dent in European economic growth.

Italy moved to the foreground as the latest source of angst for markets, after a weekend of drama in which President Sergio Mattarella on Sunday blocked the formation of a government that would have been decidedly against the euro.

Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange (NYSE), April 6, 2018 in New York City.

U.S. markets set to rebound amid Italy uncertainty  

The anti-establishment 5-Star Movement, Italy’s biggest party, and the far-right League party picked euro critic Paolo Savona as their economy minister. The two parties, both critical of Europe’s single currency, had won more than half the votes in March’s parliamentary elections. Mattarella vetoed the choice and instead asked Carlo Cottarelli, a former IMF official,toform a temporary government, but both parties object to him, and a new vote is now expected in late July.

The euro sank, losing 0.7 percent Tuesday to $1.1540, and investors dumped Italian bonds while seeking safety in U.S. Treasurys and German bunds. The 2-year Italian yield briefly snapped above 2.73 percent, a sharp move from just 0.48 percent on Friday and a negative yield earlier this month.

Global equity markets slumped, with the Dow tumbling more than 450 points. Banks led the selloff, and the S&P financial sector declined more than 3 percent. In Europe, yields on Italian bank debt spiked as bank shares sold off.

Chris Rupkey, chief financial economist at MUFG Union Bank, said a rash of recent data has already raised concerns about European growth. “This could be the straw that breaks the camel’s back in the case of prospects for Europe. It will spill over into the U.S. They won’t buy as many of our imports,” he said.

“When world economic growth has been threatened in the last three years, it was a concern. It hurts confidence on the economic outlook for the U.S.,” he said. “Given what we know right now, I would not be comfortable rushing out and forecasting a rate hike in September.”

But Rupkey also said the markets are reacting to news that occurred over a three-day holiday weekend in the U.S. and may not be as turbulent in upcoming sessions. “It’s not a full-blown European sovereign debt crisis yet. For one thing, the Italian 10-year yield is a little over 3 percent. Back in 2012, it was at 8 percent. It’s not the same situation yet.”

“I’m sure many American traders wish that Europe, in general, would stop having these mini referendums on whether the euro is going to survive,” said Rupkey. “It’s going to be really dragged out. I don’t think we can trade on this every day. I don’t think 10-year yields in Italy are going to go higher and higher every day, waiting for that vote. The focus is going to shift back pretty quickly to the U.S., which is employment and wage data on Friday.”

For some traders, the Italian political crisis is deja vu to the Greek debt crisis, which wound down three years ago after fanning fears that the whole financial and economic fabric of the euro zone could unravel.

“The chaos in Europe is pushing down U.S. interest rates so money is flowing to the U.S., fleeing Europe, making people think, that [with falling interest rates], coupled with the rising dollar, that the Fed responds by maybe having second thoughts about the trajectory of Fed policy,” said Marc Chandler, head of foreign exchange strategy at Brown Brothers Harriman. “It also is a risk to the real economy because Europe’s a big trading partner.”

The Federal Reserve, driven by a stronger U.S. economy, is on track to raise interest rates for a second time this year at its meeting June 13. The Fed has forecast three hikes for this year, but the markets had been expecting an added hike in September, in addition to December.

“The Fed is going to raise in June, raise in September and then they’re going to play it by ear,” said Peter Boockvar, CIO at Bleakley Advisory Group.

The U.S. 2-year Treasury yield, the most sensitive to Fed rate hikes, slipped to 2.38 percent, after touching 2.60 percent recently. The 10-year dipped to 2.82 percent from 3.12 percent just several weeks ago.

Chandler said he does not expect a new Italian government to push to exit the euro, though it could threaten other measures. Italy is the biggest debtor in the euro zone, with 2.3 trillion euros in debt, or 132 percent of GDP last year. That is double Germany’s level and well above the 87 percent of the euro zone.

“Their tactics would be to make some demands like: ‘Let’s cut taxes. Let’s use our t-bills to pay down our arrears. … Let’s keep challenging the EU,'” Chandler said. “That’s the back door to leave. You place demands on the EU.”

If this Italian situation gets worse, it could mean pain in the short term: Randy Warren

If this Italian situation gets worse, it could mean pain in the short term: Randy Warren  

He said the next coalition government could have a list of proposals to challenge the existing rules of the EU. “That’s why despite what their lips say, ‘We’re not looking to leave immediately,’ what it increases is the stress on the system, the demands they are placing,” Chandler said.

But the likelihood Italy leaves the euro are “slim to none,” he said.

Spain is another worry for markets, with a vote of confidence later this week on the administration of Prime Minister Mariano Rajoy because of a campaign finance scandal. That could force a new election for that country, which has already seen a deep divide over the Catalan region’s wish to split from Spain.

“The outcome in Italy is hard to see as an investment-friendly outcome. It’s much easier to see an investor-friendly outcome in Spain. Spain is bad, but Italy is a lot worse,” he said.

Chandler said one outcome in the next election is that Silvio Berlusconi, former prime minister, could run for office again. A court ruled that the three-time prime minister may again seek office, after being banned because of tax fraud for more than five years. Berlusconi has been supportive of a “parallel” currency to the euro, Chandler said.

Also unclear is how the European Central Bank will respond to the turmoil kicked up by Italy, and some strategists say ECB President Mario Draghi would be sure to retain stimulus as needed. The ECB is expected to announce in September that it will put aside its asset purchases, but if Italy’s woes spill into the broader economy, that could be in doubt.

“He’s completely lost control of the Italian bond market in two weeks,” said Boockvar. “I think he’s going to do his best to verbally calm nerves, but as far as legally using his balance sheet to help, I don’t see what he can do.”

But some traders appear to see the Italian situation as enough of a red flag to slow the Fed, particularly after the U.K. Brexit vote led to a market correction.

“The market is still pricing in a Fed hike for next month. It’s already in the cards. Why would the Fed not raise interest rates, given the kind of economic data we expect this week?” said Chandler. “Where I really see this having an effect is on the back end, the September hike.”

Robert Sinche, chief global strategist at Amherst Pierpont, does not see enough damage from Italy to slow the Fed.

“I think this will be a lot of noise, but I’ve seen this movie three or four times before. Italy stays in [the euro zone], and life goes on. There could be a little more uncertainty over the summer. They’ve realized that, which is why they pushed up the election to late July/early August,” he said.

“The ECB has been notoriously quiet because I think they like the signals the market is sending to Italy on the type of fiscal policies they’re talking about,” said Sinche. “I think we’ve had this spasm of risk off and in another couple of days we’ll be focused on some other bright light that comes along. I think what we’re seeing now is really a lot of liquidations of shorts in the bond market that were feeling pretty confident in Fed hikes and inflation.”

WATCH: Costa says Italian political risk way overdone

Italian political risk way overdone: Costa

Italian political risk way overdone: Costa  

French President Hollande Says French Values Must Be Defended In Cold War Climate

(THIS ARTICLE IS COURTESY OF BLOOMBERG NEWS)

Hollande Says France Must Defend Values in Cold War Climate

December 31, 2016, 3:03 PM EST
  • Outgoing French president sees democracy, freedom at risk
  • Final New Year’s address targets National Front’s Le Pen

French President Francois Hollande tells the French they have values to defend in the context of a new Cold War — a reference to both geopolitics and the country’s looming presidential election.

“There are moments in history when everything can be toppled. We are living through one of those periods,” Hollande said in a televised speech from Paris. “Democracy, freedom, Europe and even peace — all of these things have become vulnerable, reversible. We saw it with Brexit and with the U.S. election in November.”

Hollande, who came to power in May 2012, bowed out of France’s 2017 presidential race earlier this month, meaning today’s New Year’s eve address to the nation will be his last as head of state. The Socialist leader insisted to French voters that they have a responsibility on the global stage when they cast their ballots.

“France is open to the world, it is European,” Hollande said. “It is not possible to imagine our country crouching behind walls, reduced to its domestic self, returning to a national currency and increasingly discriminating based on peoples’ origins. It would no longer be France. That is what is at stake.”

Those remarks directly targeted the policies of National Front leader Marine Le Pen, who is committed to pulling France out of the euro, increasing restrictions on immigration, as well as putting up tariff barriers.

“Our main enemy is our doubt. You must have confidence in yourselves,” Hollande said.

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The Yuan Joins Elite Class Joining The International Monetary Fund

(This article is the courtesy of the Shanghai Daily News)

Yuan joins elite club of reserve currencies

THE yuan’s inclusion in the International Monetary Fund’s elite reserve currency basket on Saturday was hailed by Chinese businesses and analysts as a “historic moment.”

“Ten years ago, the yuan could hardly go out of the country. But now China’s opening-up and huge economic size has made it more and more popular in the international market,” said Lu Jian, vice president of Guangdong Guangken Rubber Group Co Ltd.

Early this year, Guangken Rubber launched a US$270 million bid for Thailand’s Thai Hua Rubber, the world’s third-largest rubber producer.

The company then sought loans from domestic and overseas banks, with some offering to fund its bid in yuan.

The acquisition in yuan helps reduce foreign exchange risks as well as fund-raising costs, said Lu.

“Ten years ago, all our overseas business was conducted in the US dollars and we often did not have yuan clearing banks. It’s quite a different scenario now,” he said.

Today, China has 21 overseas yuan clearing banks across the world.

“Despite the fluctuations in the exchange rate, the international market has not lost interest in the yuan and on the contrary, global demand is increasing,” Lu said.

On Friday, the IMF announced the launch of its new Special Drawing Right basket, including the yuan, effective from Saturday, saying it was a “historic milestone” for China, the IMF and the international monetary system.

The inclusion makes the yuan one of the five reserve currencies fully endorsed by the 189-member organization, joining the US dollar, the euro, the Japanese yen and the British pound.

Now, the yuan accounts for the third-largest share of the new SDR basket with 10.92 percent, following the US dollar’s 41.73 percent and the Euro’s 30.93 percent.

“The yuan’s inclusion reflects the progress made in reforming China’s monetary, foreign exchange and financial systems and acknowledges the advances made in liberalizing and improving the infrastructure of its financial markets,” IMF Managing Director Christine Lagarde said.

The yuan has moved into the top 10 but still trails the other major currencies, according to the Bank for International Settlements.

Created in the 1960s, the “Special Drawing Right” is a unit of account used by the IMF as a foreign exchange reserve asset and is not a freely traded currency. To help manage financial crises, the IMF issues loans to member countries denominated in SDRs.

In July 2009, China approved pilot program for cross-border trade settlement in yuan, embarking on the internationalization process of the currency.

The yuan was the fifth most active currency for global payments by value in July, with a share of 1.9 percent, an increase from 1.72 percent in June, according to data from global transaction services organization SWIFT.

China’s central bank said on Saturday that the country will continue to push forward financial reforms and market opening after the yuan’s inclusion.

Zhang Lijun, a partner with Price Water House Coopers China, said the yuan’s inclusion was of similar significance to China’s joining the World Trade Organization.

“The two cases also have shown that China helped to improve rather than topple global rules and this has positive significance for the coordination of global economic governance,” said Zhang.