Country Analysis of Luxembourg Essay
The purpose of this essay is to discuss the history, economy and politics of Luxembourg.First I will start by briefly discussing the history of Luxembourg and the recent economic trends and political structure of Luxembourg.Then I will discuss the country's attitude towards integration and whether it was a good idea for them to join the Euro, and finally conclude with my own views of Luxembourg and Europe.I have been asked to write this essay by my lecturer and this is to be submitted by the 19th April 2002.
Background on the economics and politics of Luxembourg
Luxembourg has shown an outstanding performance in terms of growth and virtually all other macroeconomic indicators in the last decade.It is the smallest, but by far the richest country in Europe.
Unemployment is virtually non-existent at less than 2% and its government, alone in the EC, does not need to borrow to cover expenditures.In the last decade Luxembourg's economic growth factors which generated the constant improvement in the standard of living over a century and a half are quite specific.The origin of the incipient industrial development lies in a single sector, the steel industry.However, the country outpaced all other EC countries with a growth rate of 4.1%.
From 1989, the inflationary trends resumed, with petroleum products again contributing to this.The trend in consumer prices hence exceeded 3% until 1993.Although in 1992 and 1993 Luxembourg's performance does not seem to be as satisfactory as that of some of its partners, this is attributable above all to the effects of the adaptation of indirect taxes to the Community standards which started in 1992 with thefirst adjustment of the VAT rates.
The adaptations of the thresholds laid down by the EU in the indirect taxation field having been accomplished, the inflation rate fell again to 2.2% in 1994.At the end of 1994, Luxembourg is in the second position among the EU …