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View of Luxembourg's City Center
Photo: ING Luxembourg
A lot of stereotypes are still circulating about the Grand Duchy of Luxembourg. Even the neighbouring countries of Belgium, France and Germany do not know the country. But what are the major beliefs people have about Luxembourg and to what extent they are true?
1. There is nothing to see and to do in Luxembourg
False. The country is far to be boring. Luxembourg City is an open-air museum and a UNESCO World Heritage Site because of its historic fortifications and old quarters. If you are instead an aficionado of edgy art, you will find plenty to satisfy your taste with more than a dozen contemporary art galleries. Star architects have made their mark on the capital, including the legendary, now deceased, I.M. Pei who designed the angular and avant-garde Contemporary Art Museum of Luxembourg (MUDAM). It is not by chance that Luxembourg City was the first to be listed twice as the European Capital of Culture. The city also has a vibrant bar culture. After work, people flock out to lively bars and pubs in the town for an extended “happy hour”.
Don’t think that outside Luxembourg City, there are only woods and lakes! The country is full of museums, monuments, castles and entertaining events. For nature lovers, there are countless hiking trails and biking tracks. Just take a look at the multilingual site of Visit Luxembourg, and you will be convinced.
2. French is the prevailing language in the Grand Duchy
It is a fact that a lot of people speak French in Luxembourg. It is one of the three official languages and the majority of cross-border workers are French-speaking. According to the National Institute of statistics and economic studies (Statec), 103,775 are coming from France and 47,156 from Belgium out of a total of 197,661. Besides, 46,938 French and 19,953 Belgian people are living in the Grand Duchy (more than 10% of total inhabitants). But these numbers do not mean that French is the dominant language everywhere in the country. In the North and the East, people speak rather Luxembourgish and German. In Luxembourg City, where the population is composed of 160 nationalities and in vast majority foreign-born (more than 70% in 2019), English is as much used as French.
3. Luxembourg is a tax haven
Not really. Everybody here pays taxes, including companies. Thinking that the corporate effective tax rates are close to zero in the Grand Duchy is wrong. For example, the overall standard tax rate applicable for companies in Luxembourg City stands at 26,01%, far beyond those applied in other European financial places such as Ireland (12%), the United Kingdom (19%) and Switzerland (18% in average).
4. There are only banks in the Grand Duchy
Of course, Luxembourg is well known to be the second largest investment fund centre worldwide after the United States. But this is just one of the aspects of the economic activities of the country. Luxembourg’s economy is robust and diversified. There is expertise in steel, polymers, composite materials, car-component manufacturing, logistics, digital services, satellite development and media production. The country also has the ambition to position itself as Europe’s next hub for technological innovation. Belval is the perfect symbol of this entire new neighbourhood erected by the government. Very close to Esch-sur-Alzette, the second largest city of the Grand Duchy, this former industrial area has undergone in only a few years an exemplary conversion into an international pole of knowledge and research. And - unbelievable but true! – Luxembourg has its space agency and is one of the top five per capita contributors to ESA (European Space Agency).
5. Everyone is rich in Luxembourg
If it could be true! Yes, OK, the Grand Duchy has the highest GDP per capita in the world - 112.846 USD in 2018 – as well as the highest minimum wage in the EU. But the risk of poverty exists in Luxembourg and is growing from year to year. A news bulletin published by the Statec in August 2019 shows that housing is amplifying inequalities in Luxembourg. Real estate prices have increased by almost 5.4% per year between 2011 and 2018. For residents, housing is the largest item of expenditure, and its weight has steadily increased in recent years. In 2017, 15,8% of the population was at risk of poverty. After the deduction of the cost of housing, this rate rose to 24%!
6. It always rains in the Grand Duchy
Indeed, in Luxembourg, the level of precipitations is abundant. Winters are generally harsh with a lot of snow and temperatures below zero. In other seasons, rains are frequent and the umbrella is more than necessary – it is almost an extension of your arm! That being said, sunny days in Luxembourg with a blue sky and high temperatures are not exceptional. And the country has so many advantages that newcomers quickly get used to the weather.
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