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Interwar Luxembourg
Interwar Luxembourg
1918–1939
Location	Luxembourg
Monarch(s)	Marie-Adélaïde; Charlotte
Prime Minister(s)	Émile Reuter; Pierre Prüm; Joseph Bech; Pierre Dupong
World War I	World War II

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Revision as of 18:42, 19 April 2024

During the interwar period, Luxembourg faced a myriad of challenges that tested its identity and resilience as a small, sovereign state nestled among larger powers. Doubts loomed regarding its independence, particularly amidst the turbulence of global politics. The monarchy's survival was called into question, prompting profound reflections on its role in a rapidly evolving world. Economic uncertainties compounded with the aftermath of war and the onset of the Great Depression, thrusting Luxembourg into a struggle for survival. Simultaneously, the introduction of universal suffrage brought a new era of political engagement, albeit fraught with ideological conflicts and societal shifts. Against the backdrop of rising tensions fueled by Nazi Germany's expansionist ambitions, Luxembourg navigated a landscape marked by uncertainty, adaptation, and profound demographic changes.

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Background

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Political history

Reuter government

On 28 July and 4 August 1918, there were elections for a Chamber of Deputies that was to revise the Constitution.^[1]

After Léon Kauffman's resignation in September 1918, Émile Reuter of the Party of the Right formed a government that was a coalition between the four major parties represented in the Chamber (Right Party, Workers' Party, Liberals, People's Party).^[1]

Revolt, mutiny, republic, abdication, referendum

As soon as the German occupation had ended, the Reuter government faced an internal crisis.^[2] After the German withdrawal, on 10-11 November 1918, a Soviet was formed in Luxembourg City on the same model as the workers' and peasants' councils in Russia.^[2] In the Chamber of Deputies, the liberals and socialists demanded an end to the monarchy. They accused the Grand Duchess of intervening in the political arena in a partisan manner, and of having been too close to the German occupiers; their motion was narrowly rejected.^[2] The Grand Duchess and the government also faced hostilty on the international stage from the Allies due to their wartime attitude towards the Germans.^[2]

On 9 January 1919, the Company of Volunteers revolted and a Committee of Public Safety proclaimed a republic.^[2] These movements did not attract majority support, and were quickly repressed by the intervention of French troops.^[2] But the position of Grand Duchess Marie-Adélaïde was definitively compromised.^[2] The ministers convinced her that abdicating in favour of her younger sister Charlotte was the only means of saving the monarchy.^[2] On 15 January 1919, the new Grand Duchess swore her oath on the Constitution.^[2] The Reuter government had succeeded in managing the crisis.

In order to reinforce the legitimacy of Grand Duchess Charlotte, the government decided to have this decision confirmed by the voters.^[2] In a referendum on 28 September 1919, Luxembourgers were invited to express their wishes on the economic future of the country, the political regime (monarchy vs republic), and the Grand Duchess personally.^[2] A large majority (80%) pronounced themselves in favour of maintaining the monarchy, which could now rely on both constitutional and democratic legitimacy.^[2]

Constitution and universal suffrage

On 15 May 1919, the Chamber approved the law on the revision of the Constitution.^[1] The political stage of the country was to be changed forever by the introduction of universal suffrage for all Luxembourgish citizens, men and women, aged over 21 years; and the introduction of proportional representation.^[1] The proportion of those eligible to vote increased from 14% to 56% of the population.^[1] Universal suffrage put a definite end to the regime of the notables which had governed under a system of restricted suffrage, and introduced the era of party politics.^[1]

Elections: new political reality

This democratisation was to the advantage of the political right wing. This was a country where despite the Industrial Revolution, most of the population was attached to a rural, traditional and conservative mentality.^[3] Liberalism, which had dominated the political stage during the 19th century, lost ground.^[3]

The Party of the Right was the winner of the first elections held under the new system, in October 1919; they received 27 seats, and thus, an absolute majority in the 48-seat Chamber.^[1] Taking account of the new majority in the legislature, the ministers Collart, Liesch (liberal) and Welter (independent) tendered their resignations.^[3] However, the Grand Duchess and the Prime Minister refused to accept, as they wanted to maintain a national union government.^[3] Collart left the government in January 1920, Liesch and Welter in April 1921.^[3] From then on, the cabinet consisted only of right-wingers.^[3] This was not changed by the partial elections which took place in the constituencies of Centre and Nord on 28 May 1922.^[3]

Social policy

The development of mass trade unions, and the short-lived creation of a Soviet after the war, revealed a profound disquiet in Luxembourgish society.^[4] From 1914 to 1920, purchasing power shrank by 300%.^[4] It was essentially the workforce – workers, private employees, or civil servants – that were suffering from the price rises and food shortages.^[4] In order to defuse a possibly explosive situation in society, the Reuter government embraced concessions, with a social policy inspired by German legislation.^[4] Taking its lead from the demands of the workers' movement, it introduced the 8-hour working day without a reduction in pay, from December 1918.^[4] In April 1919, the government created factory councils in industrial companies with over 50 workers.^[4] This organ of conciliation allowed workers' representatives to negotiate better pay and working conditions.^[4] Torn between the conflicting interests of employers and employees, the government then started to backtrack.^[4] Consequently, after a large protest, it extended factory councils to all establishments with at least 15 workers.^[4]

Despite these measures, a crisis erupted in 1921.^[4] Reacting to massive lay-offs and pay cuts in the steel industry, the Mine and Metalworkers' Union (BMIAV) started a prolonged strike.^[4] The government initially refrained from intervening in the labour dispute.^[4] However, the strike movement started to take on revolutionary characteristics.^[4] On 1 March, the strikers occupied the factory in Differdange.^[4] Giving way to the fears of business-owners and under pressure from the French and Belgian ambassadors, Émile Reuter abolished the factory councils by decree of 11 March 1921.^[4] The government appealed for French troops to intervene, who managed to establish order in the mining area alongside Luxembourgish gendarmes and soldiers from the Company of Volunteers.^[5] The steelworkers' strike also failed because it was not able to mobilise workers in other industries.^[6]

After the war, the government gave private employees, civil servants, and railway workers a significant improvement in their working conditions.^[6] The law of 31 October 1919 gave private employees several advantages which distinguished them from manual workers: separate delegations, the 8-hour day, annual paid leave of 10 to 20 days dependent on length of service, and measures that gave security of employment.^[6] The Grand Ducal decree of 14 May 1921 gave railway workers a status similar to that of civil servants, especially with regards to pensions and security of employment.^[6] The civil servants, for their part, had their pay indexed with inflation.^[6] Drawing lessons from the strike, the government put in place various organs for discussion and consensus.^[6] The law of 4 April 1924 created five professional chambers: the Chamber of Commerce, the Chamber of Artisans, the Chamber of Work, the Chamber of Private Employees, and the Chamber of Agriculture.^[6]

Economic policy

Currency

The government took advantage of its exit from the Zollverein to create a proper national currency, a symbol of its sovereignty.^[7] A decree of 11 December 1918 regulated the exchange of the 200 million German marks in circulation, for Luxembourgish francs.^[7] This transaction brought about several logistical problems.^[7] The printing of new notes did not proceed fast enough, and the exchange rate of 1,25 was considered by some as an unjustified generosity towards investors by the state.^[7] The new franc was not backed by any gold reserves, and had no value abroad. The government also had the intention of creating a monetary union with Luxembourg's new economic partner.^[7] This partner's currency would be legal tender in the Grand Duchy.^[7] In 1921, the Grand Duchy borrowed 175 million Belgian francs.^[7]

Steel industry

The economic reorientation after the war affected the steel industry above all, in which French and Belgian capital now replaced German investors.^[7] German-owned factories were acquired by Franco-Belgo-Luxembourgish consortiums.^[7] Two new companies were created, Hadir and the "Société métallurgique des Terres rouges".^[7] The government barely intervened in the industrial restructuring, which was driven by the great captains of the steel-working industry such as Émile Mayrisch or Gaston Barbanson.^[7]

Railways

After the war, Luxembourgish railways also changed hands.^[8] After the armistice, French military authorities occupied the main network.^[8] The lines of Guillaume-Luxembourg were exploited for the benefit of the French state, as were the Chemins de fer d’Alsace et de Lorraine.^[8] On 19 December 1918, the Luxembourgish government withdrew from its railway treaty with Germany.^[8] However, Belgium was also interested in making use of the main Luxembourgish network.^[8] France agreed to withdraw if the Belgian and Luxembourgish governments reached an agreement, but continued to exploit Guillaume-Luxembourg in the meantime.^[8] The BLEU treaty stipulated that the question of railways be dealt with.^[8] In May 1924, Reuter signed a treaty with Belgium which required the unification of the Guillaume-Luxembourg and Prince-Henri networks under a Board of Directors where Belgian representatives would have a majority.^[8] On 20 January 1925, the Chamber of Deputies, moved by anti-Belgian feelings, rejected the treaty, provoking a government crisis.^[8] ARBED, which feared the influence of the Société Générale de Belgique on Luxembourgish railways, had also opposed the government's plans.^[8]

Prüm government

The Chamber of Deputies' rejection of the railway treaty with Belgium brought about the Reuter government's resignation.^[9] As it was not possible for a new government majority to be formed, the Chamber was dissolved and new general elections were called for 1 March 1925.^[9] The election saw various changes in the political landscape, as nine different political parties were henceforth represented in the Chamber.^[9] The right lost its absolute majority, and held on to 22 out of 47.^[9] But it refused to enter into coalition with any party that had voted against the railway treaty.^[9] Pierre Prüm, leader of the Independent National Party, was asked to form a new government, and relied on an eclectic alliance of liberals, socialists, and some Deputies on the right.^[9]

Social policy

Although the Socialist Party was not directly represented in the government, it constituted the Prüm government's main support, alongside the Independent National Party.^[10] Under the impetus of the socialists, the government took a number of social measures.^[10] One of its first acts was to re-establish the workers' delegations, in factories with over 20 workers.^[10] However, the bill on workers' holidays, which was debated in the Chamber from May 1926, divided the liberals and socialists.^[10] As it no longer had a parliamentary majority, the Prüm government resigned on 15 July 1926.^[10]

Bech government

After the Prüm government's resignation, the Grand Duchess had initially intended to confide the formation of a government to Hubert Loutsch, already a former prime minister.^[11] However, the man associated with the "coup d’état" of 1915 was unacceptable in the eyes of the left.^[11] Joseph Bech was chosen in the end.^[11] A pragmatic conservative, he managed to rapidly reach an agreement with the liberals.^[11] The coalition between the Party of the Right and the liberal movement lasted until 1937.^[11] The partial elections of 3 June 1928, 7 June 1931 and of 3 June 1934, did not change the power relations, although there were several ministerial reshuffles.^[11]

Economic policy

Belgian currency devaluation

The economic fluctuations of the inter-war period sorely put the UEBL to the test.^[12] Above all, the monetary policy of the Belgian partners caused constant concerns to the Luxembourgish government.^[12] On 25 October 1926, the Belgian government devalued the Belgian franc, to which the Luxembourgish franc was attached.^[12] Luxembourgish currency experienced the first devaluation in its history.^[12] The director-general of Finances, Pierre Dupong, immediately took measures to stabilise the franc, by aligning it with the pound sterling.^[a]^[12] He then sought advice abroad, consulting the president of the Reichsbank, Hjalmar Schacht, on the possibility of setting up an autonomous monetary system.^[12] This resulted in the law of 19 December 1929, which aimed to give the Luxembourgish franc a solid foundation, by defining it in relation to gold, and by creating a gold reserve.^[12] However, in late March 1935, the Belgian government, proceeded with another major devaluation of Belgian currency.^[12] While in Belgium, financial and economic difficulties justified such a measure, in Luxembourg, the public finances were balanced, and export industries such as steel benefited from this.^[12] The Luxembourgish government decided to only follow the Belgian devaluation of 28% with their own devaluation of 10%.^[12] In effect, Dupong refused to dispossess small investors and to effectively cut salaries through a too strong devaluation.^[12] From this moment and until 1944, the Luxembourgish franc was worth 1,25 Belgian francs.^[12] The abandonment of parity with Belgian currency complicated financial operations and disadvantaged Luxembourgish exports relative to international competition.^[12]

Stock exchange and holdings law

After the depression of the immediate post-war period, the Luxembourgish economy saw a phase of expansion from 1924 et 1929.^[13] The increase in financial and economic activity is shown by the creation of 829 new companies from 1919 to 1928. This required the creation of a stock exchange, which the Chamber of Deputies authorised in December 1927.^[13] The Bech government also introduced legislation in 1929 on financial holding companies, provided them with a very favourable fiscal framework. This had little effect at the time, but, in the 1970s, was to be one of the decisive factors in the growth of the financial services industry.^[13]

From 1930, the international crisis triggered by the Wall Street Crash of 1929, also affected Luxembourg and Belgium.^[13] Production and exports started to collapse.^[13] The crisis inevitably had repercussions for the functioning of the UEBL, as it provoked a return to protectionism in all countries.^[13] Belgium and Luxembourg each put in place protective measures without notifying the other: a quota for certain products, import licences, etc.^[13] An economic border was established again between the two countries.^[13] The rapid degradation of bilateral relations forced the two governments to start negotiations.^[13] On 23 May 1935, a group of treaties were signed in Brussels, which provided a solution to the deadlock.^[13] These agreements reaffirmed the principle at the root of the UEBL, namely free trade between the two countries, and instituted an administrative commission, composed in equal measure of Luxembourgers and Belgians, which became an essential instrument for Belgo-Luxembourgish cooperation.^[13] The agreements of 1935 also dealt with a number of monetary questions, and put a cap on the circulation of Luxembourgish currency.^[13] The Luxembourgish government succeeded in obtaining numerous concessions for its agriculture.^[13] Bech, who was also the Minister for Agriculture, wanted to protect this sector, which remained one of the pillars of Luxembourgish society (employing 30% of the active population in 1935) and was the main electoral base of the Party of the Right.^[14] However, these protective measures were to postpone necessary structural reforms, and made it all the more difficult to adapt to the international market.^[15]

Social policy

Although the crisis of the 1930s caused a slowdown in the Luxembourgish economy, the rate of unemployment remained relatively low: a maximum of 2,159 job-seekers in 1933.^[15] This was mostly due to the government's immigration policy.^[15] While foreigners constituted 40% of the steel industry's workforce in 1929, this had decreased to 10% by 1935.^[15] In the meantime, a large number of foreign workers were laid off, and sent back to their country of origin.^[15] Foreign workers played the role of a "safety valve".^[15]

However, while the crisis' effects on unemployment were softened, it had grave consequences for purchasing power.^[15] In the 1930s, the question of workers' salaries was again at the centre of social debate.^[15] The government advocated moderation and feared that a social policy that was too generous would damage the competitiveness of Luxembourgish industry.^[15] Business owners refused all negotiation on the question of salaries.^[15] The social struggle heated up in December 1935 when the government postponed the vote on a law that provided for the introduction of collective bargaining, and the creation of an organ of arbitration.^[15] The Christian and socialist trade unions united to mobilise the masses, demanding an increase in salaries and legal recognition of the unions.^[15] On 12 January 1936, a large protest attracted 40,000 participants.^[15] The Bech government decided to back off.^[15] A Grand-Ducal decree on 23 January 1936 created the National Labour Council, an arbitration organ which contained, under the direction of the government and on equal basis, representatives of business-owners and workers.^[15] The same year, article 310 of the penal code was abolished, and a law guaranteed union rights.^[15]

The social policy of the Minister for Social Welfare and for Work, Pierre Dupong, drew its inspiration from the Church's social doctrine, as defined in the encyclicals Rerum Novarum and Quadragesimo Anno; this doctrine rejected the socialist concept of class struggle.^[15] It was concerned with bringing about harmonious labour relations, by creating organs for conciliation and arbitration, and with achieving an improvement of workers' condition by prudent reforms.^[15]

Housing

The Bech government, in which Pierre Dupong represented the Christian social wing, had always attached great importance to the question of housing.^[16] Allowing workers or employees to become house owners seemed the most certain means of preventing workers' political radicalisation.^[16] The government also favoured the construction of individual houses instead of the collective rented housing that was so frequent in social accommodation.^[16] In 1929, it created the Service for Popular Housing which was attached to the National Society for Cheap Homes.^[16] This body allocated loans at a reduced interest rate for the acquisition of cheap housing, and for the hygienic improvement of homes. Numerous families received advantageous conditions.^[16] Until 1940, the Service funded more than 2000 new buildings.^[16]

Muzzle law

The crisis of the 1930s gave an impetus to the Communist Party, which had been born from the split of the Socialist Party in 1921.^[16] Revolutionary ideas gained in popularity among workers in the mining basin, causing concern in conservative circles.^[16] As a young Deputy, Joseph Bech had witnessed the unrest of 1917 to 1921, and this had left a profound impression on him.^[16] The Prime Minister was also influenced by authoritarian and corporatist tendencies which were growing in his own party, especially through the intermediary of Jean-Baptiste Esch, a young writer for the Luxemburger Wort.^[16]

When the Communists achieved their first electoral successes and in 1934 managed to get their general secretary Zénon Bernard elected to the Chamber of Deputies, Bech decided to act.^[16] The Chamber invalidated the election of the Communist Deputy under the pretext that as a revolutionary, he could not swear an oath on the Constitution.^[16] In his role as Minister of Education, Joseph Bech had two teachers who were also Communist Party members removed from their jobs.^[16] The government then prepared a bill "for the defence of political and social order", outlawing membership of any group whose "activity aimed to abolish or change the Constitution through violence or any other illicit means".^[16] The text was above all aimed at the Communist Party.^[16] In April 1937, the bill was passed by a large majority: 34 Deputies of the right and liberals, against 19 Deputies of the left and 1 abstention.^[16]

However, the law, termed the Maulkuerfgesetz by its opponents, ran into strong opposition outside parliament orchestrated by the Workers' Party, the unions and young liberals, who saw in this measure an attack on freedom of opinion.^[16] Believing that he had popular backing, Bech agreed to put the law to a referendum, at the same time as the legislative elections of 6 June 1937 in the Nord and Centre constituencies.^[17] To great surprise, 50,67% of electors voted "No".^[18] The Party of the Right managed to keep hold of all its seats in the elections, but the liberals experienced significant losses.^[18] The socialists were the winners of the election.^[18] Even though a continuation of the government coalition would have been theoretically possible, with 31 seats out of 55, Bech felt himself repudiated, and tendered his resignation.^[18]

Dupong-Krier government

After the rejection in the referendum on the Maulkuerfgesetz, Joseph Bech presented his resignation to Grand Duchess Charlotte.^[19] However, she initially refused to accept it.^[19] In the face of an international situation that was growing more and more menacing, the idea gained ground that a coalition of the three main parties should be formed.^[19] But the socialists refused to join a government in which Bech served; the Catholics responded similarly with regards to the socialist René Blum.^[19] After five months of negotiations, Pierre Dupong formed a new government coalition, which was almost a national union government.^[19] Bech remained in the government, retaining the Foreign Affairs portfolio.^[19] Dupong became head of government.^[19] Two socialists joined the government: Pierre Krier, a trade unionist, and René Blum, a lawyer.^[19] The liberals were represented in the cabinet by Étienne Schmit, when he died in December 1937, no successor was acceptable to the other parties, so the liberals withdrew from the coalition in July 1939.^[19] The Workers' Party replaced René Blum with Victor Bodson in April 1940, weeks before the German invasion and the government's departure into exile.^[19]

The international situation continued to worsen, with war becoming a probability (see below). In the face of the international threat, the Chamber granted the government an extension of its power in order to allow it to take measures necessary to safeguard the interests of the state.^[20] Thus, on the basis of the laws of 28 September 1938 and of 29 August 1939, the government took a series of measures: a new declaration of neutrality, a ban on providing aid to the belligerent parties, increased monitoring of the borders, a ban on hunting in border areas, measures to save fuel and electricity, the creation of stocks of food and fuel, and monitoring of radio broadcasts and the press.^[20]

1939 independence centenary

In this context, the commemoration of the centenary of independence, in which the whole of Luxembourgish society participated, became a reaction against the German threat.^[20] In 1939, the government skilfully used the commemoration festivities to demonstrate to European public opinion the country's desire for independence.^[20] The commemoration succeeded in reconciling Luxembourgish society after it had been divided by the referendum of 1937, and reinforced national sentiments in the face of the external threat.^[20]

Foreign relations

After the armistice of 11 November 1918, German troops left the country, making way for the Allied armies which passed through Luxembourg to occupy the Rhineland.^[21] Allied forces were stationed in Luxembourg for six months, in order to maintain supply lines.^[21] This military presence was to prove a useful instrument for maintaining internal order. During the revolutionary period of January 1919, the government appealed to French troops to re-establish public order.^[21]

On the international stage, the government faced hostility towards the Grand Duchess. On 23 December 1918, the French government refused to receive the Luxembourgish ministers in Paris.^[2] Émile Reuter, Auguste Liesch and Nicolas Welter returned to Luxembourg with empty hands, where the troubles continued.^[2]

New economic partner

Germany's defeat in the war rendered Luxembourg's existing treaties obsolete.^[21] Under Allied pressure, on 19 December 1918 the Luxembourg government renounced its membership of the Zollverein, and ended German rights to its railways.^[21] As it was not capable of living in isolation for any length of time, Luxembourg had to find a new economic partner.^[21] Already in 1917, it had formed a commission to study the economic problems caused by the war and its consequences.^[21] The steel industry and farmers strongly preferred France as an economic partner.^[21] Only wine-growers were in favour of partnering with Belgium, where they could sell their products more easily.^[21] On 21 February 1919, the Reuter government started simultaneous talks with France and Belgium.^[21]

Negotiations with the Belgians were only undertaken with the intention of putting additional pressure on France, as a bargaining tool.^[21] However, negotiations with the French did not progress.^[21] The Reuter government decided to put the matter to a referendum.^[21] It was hoped that the voice of the people would make an impression, at a time when the war's victors were re-drawing the map of Europe according to principles of Wilsonian self-determination.^[21] On 28 September 1919, 73% of Luxembourgish electors voted for an economic union with France.^[21]

However, the Luxembourgish government had to wait several more months before the French laid their cards on the table. On 10 May, the French ambassador informed the Luxembourgish government that his country had no intention of forming an economic union, and advised it to seek an agreement with Belgium.^[21] Having succeeded in concluding a military pact with Belgium, France had no further need of Luxembourg.^[21] Since the beginning of the war, the Belgian authorities had shown annexationist tendencies towards the Grand Duchy.^[21]^[b] After the French announcement, the Luxembourgish government re-started negotiations with Belgium.^[22] These were slow-going, but resulted on 25 July 1921 in a treaty on a customs and monetary union between the two countries: the Belgium–Luxembourg Economic Union, which came into force in March 1922.^[22] This stipulated the abolition of customs barriers between the two countries, a common external tariff, a common trade policy led by Belgium and a currency association.^[22] The Belgian franc became the common currency, while Luxembourg however retained its right to print Luxembourgish notes.^[22] The economic union was never a perfect one, as the treaty did not require the harmonisation of tax systems.^[22]

League of Nations

Before World War I, Luxembourg had not led a real foreign policy, feeling bound by its neutral status and solidly anchored in the German sphere of influence.^[22] The violation of its neutrality in 1914 and the questioning of its independence during 1918-1919 showed the Luxembourgish government that it was necessary to play a role on the international stage.^[22] Luxembourg was not invited to the Paris Peace Conference and was not one of the founding members of the League of Nations established by the Treaty of Versailles.^[22] From 1919, the Reuter government took steps to have the Grand Duchy admitted to the League of Nations.^[22] Luxembourg's unarmed neutrality seemed at first to present an obstacle to its admission, as the League's charter provided for the passage of troops over member states' territory, and the participation in economic and financial sanctions against a hypothetical belligerent.^[22] At the same time, the United Kingdom considered that the small size of Luxembourg's territory was a problem.^[22] The Reuter government succeeded in overcoming these objections, partly by hinting at the possibility of a revision of the Luxembourgish Constitution.^[22] On 16 December 1920, a session of the League of Nations in Geneva voted unanimously to have Luxembourg admitted.^[22] Later, the Luxembourgish government, conscious of the population's attachment to the principle of neutrality, let the constitutional revision drag on; it would never come into force.^[22]

Railways

After the war, Luxembourgish railways also changed hands.^[8] After the armistice, French military authorities occupied the main network.^[8] The lines of Guillaume-Luxembourg were exploited for the benefit of the French state, as were the Chemins de fer d’Alsace et de Lorraine.^[8] On 19 December 1918, the Luxembourgish government withdrew from its railway treaty with Germany.^[8] However, Belgium was also interested in making use of the main Luxembourgish network.^[8] France agreed to withdraw if the Belgian and Luxembourgish governments reached an agreement, but continued to exploit Guillaume-Luxembourg in the meantime.^[8] The UEBL treaty stipulated that the question of railways be dealt with.^[8] In May 1924, Reuter signed a treaty with Belgium which required the unification of the Guillaume-Luxembourg and Prince-Henri networks under a Board of Directors where Belgian representatives would have a majority.^[8] On 20 January 1925, the Chamber of Deputies, moved by anti-Belgian feelings, rejected the treaty, provoking a government crisis.^[8] ARBED, which feared the influence of the Société Générale de Belgique on Luxembourgish railways, had also opposed the government's plans.^[8]

At the risk of provoking a break-up of the UEBL, Pierre Prüm sought a rapprochement with France.^[23] When he had only just taken office, the prime minister was received in Paris.^[23] On 9 October 1925, an agreement was reached with the Direction Générale des Chemins de fer d’Alsace et de Lorraine.^[23] This agreement gave France the provisional right to the Guillaume-Luxembourg network.^[23]

Bech's foreign policy: assuring security, maintaining neutrality

After World War I, the main priority of Luxembourgish foreign policy was to assure the security of the Grand Duchy in the new organisation of Europe.^[24] Situated as it was between the two great military powers of the continent, France and Germany, the country would risk seeing its existence endangered in the event of a new conflict between its neighbours.^[24] The warming of Franco-German relations since the Locarno Conference in 1925 was a positive sign.^[24] The Locarno Treaties provided for countries' security to be guaranteed by the development of procedures to resolve international differences peacefully.^[24] Although the Treaties came about without Luxembourgish participation, they marked an important date in the evolution of the Grand Duchy's defence policy.^[23] The fact that France and Germany guaranteed the inviolability of national borders, and agreed not to use war, consolidated Luxembourg's international situation.^[23] Pierre Prüm made use of Locarno's possibilities for international arbitration to start talks with the Belgian and French governments, and Luxembourg would eventually use its dispositions to conclude several treaties with other countries.^[25]

Joseph Bech became prime minister and foreign minister in 1926. He would continue Prüm's policy of bilateral agreements, and during his tenure, Luxembourg concluded treaties of conciliation and arbitration with several countries: Belgium and France in 1927; Spain and Poland in 1928; Portugal, Germany, Switzerland, the Netherlands, Czechoslovakia and the United States in 1929; Romania in 1930 and, finally, Italy and Norway in 1932.^[24]

More generally, Bech instituted a policy of maintaining a more active presence on the international scene. He regularly participated in meetings of the League of Nations in Geneva, was present at the Conference on Disarmament in The Hague in 1932, and took part in meetings of the Oslo Alliance, which contained the smaller states, Norway, Sweden, Denmark, Finland, the Netherlands, Belgium, and Luxembourg.^[24] From 1927, the Grand Duchy ratified most of the treaties signed under the auspices of the League of Nations.^[24] The Luxembourgish government also joined the Pact of Paris, in which the signatory countries agreed to renounce war as an instrument of policy, and the plan of Aristide Briand, who proposed a federal European union in 1930.^[24] In a note in 1937, Bech explained Luxembourg's interest in participating in the Concert of Nations: "Before the war, neutrality was synonymous with total abstention. Since the creation of the League of Nations, the situation has changed. The small countries have, thanks to Geneva, a podium from which their voice can be hear from afar. Whatever may be the flaws of this institution, it constitutes for the small states, whether they are armed or disarmed like us, the sole safeguard against abuses of power."^[24]

Luxembourg's active participation in the work of the League of Nations did not mean that it was abandoning neutrality, however.^[24] For the politicians of the inter-war period, maintaining this regime seemed the only means of guaranteeing the security of the country and avoiding being caught up in a war.^[24]^[12] Joseph Bech took every opportunity to underline that "the collaboration which it [the Grand Duchy] may bring to the great work of Geneva shall not constitute a modification of of its constitutional and conventional policy of neutrality".^[12]

Maintaining the UEBL

When he arrived at the Ministry of Foreign Affairs, Bech was confronted with the worrying deterioration of Belgo-Luxembourgish relations.^[12] The Belgium–Luxembourg Economic Union (UEBL), concluded in 1921, had got off to a bad start.^[12] On the Luxembourgish side, the memory of Belgian annexationism was still alive.^[12] On the Belgian side, the Prüm government's overtly displayed sympathies for the French had caused displeasure.^[12] During his whole time in office, the foreign minister tried to re-establish these relations with Belgium.^[12]

The economic fluctuations of the inter-war period sorely put the UEBL to the test.^[12] Above all, the monetary policy of the Belgian partners caused constant concerns to the Luxembourgish government.^[12]

From 1930, the international crisis triggered by the Wall Street Crash of 1929, also affected Luxembourg and Belgium.^[13] Production and exports started to collapse.^[13] The crisis inevitably had repercussions for the functioning of the UEBL, as it provoked a return to protectionism in all countries.^[13] Belgium and Luxembourg each put in place protective measures without notifying the other: a quota for certain products, import licences, etc.^[13] An economic border was established again between the two countries.^[13] The rapid degradation of bilateral relations forced the two governments to start negotiations.^[13] On 23 May 1935, a group of treaties were signed in Brussels, which provided a solution to the deadlock.^[13] These agreements reaffirmed the principle at the root of the UEBL, namely free trade between the two countries, and instituted an administrative commission, composed in equal measure of Luxembourgers and Belgians, which became an essential instrument for Belgo-Luxembourgish cooperation.^[13] The agreements of 1935 also dealt with a number of monetary questions, and put a cap on the circulation of Luxembourgish currency in the Grand Duchy.^[13] During the negotiations, the Luxembourgish government succeeded in obtaining numerous concessions for agriculture in the Grand Duchy.^[13] Joseph Bech, who was also the Minister for Agriculture, wanted to protect this sector, which remained one of the pillars of Luxembourgish society (employing 30% of the active population in 1935) and which was the main electoral base of the Party of the Right.^[13]^[15] However, these protective measures were to postpone necessary structural reforms, and made it all the more difficult to adapt to the international market.^[15]

Relations with Nazi Germany: growing tensions

Hitler's rise to power in Germany marked the beginning of a new era of tension in Europe. Hitler's foreign policy plans, namely the unification of all Germans and all Germanic minorities from various European countries into a "Greater Germany" and the conquest of "living space" (Lebensraum) to be achieved by expanding into the rich lands of Poland and Ukraine, would inevitably lead to a new conflagration in Europe.^[26]

The Grand Duchy, surrounded by its powerful neighbours, viewed the looming threat of war with concern. Certainly, its independence and territorial integrity had been recognised by the great powers in the Treaties of London of 1839 and again in 1867. For too long, the geographical location and strategic importance of the fortress of Luxembourg had subjected the country to formidable foreign competitions. The danger of a war between France and Germany in 1867 over Luxembourg showed the need for the complete independence of Luxembourg and its neutrality under the guarantee of the great powers. However, this neutrality seemed to hold little value against the thinly veiled threats of the Nazi leaders who, despite the words of appeasement towards the Luxembourgish government, considered Luxembourg to be historically German territory. There was also the precedent that Germany had invaded Luxembourg in 1914, ignoring its neutral status. This raised questions as to how Hitler could be trusted, a man who throughout his career violated multiple existing treaties.^[26]

The remilitarisation of the Rhineland, from 1936, reduced the safety buffer between France and Germany to the small territory of Luxembourg.^[27] The presence of foreign troops in the Grand Duchy in case of a Franco-German war once again became a probability.^[27] The other Western neighbour of Germany, Belgium, reacted by pulling out from the military agreement with France, and by adopting a "policy of free hands".^[27] The Luxembourgish government likewise sought safety in a policy of neutrality.^[27] To consolidate the international position of Luxembourg, the Minister of Foreign Affairs, Joseph Bech, imagined a diplomatic operation: the signatory states to the Treaty of London of 1867 were to reaffirm the perpetual neutrality of Luxembourg by a common declaration.^[27] However, Belgium and the United Kingdom equivocated.^[27] In the absence of a multilateral agreement, Bech tried to obtain a simultaneous undertaking from France and Germany.^[27] While Germany had no problem in expressing towards Luxembourg all the promises that had been requested, France hesitated to commit itself.^[27] The French headquarters wanted to retain a right of passage across the Grand Duchy in case of German aggression.^[27] Thus, in spring 1939, with the spectre of war hovering over Europe, the government did not succeed in obtaining any formal guarantees.^[27] A surprise invasion without a reaction from the other powers became probable.^[27]

In this context, in 1939 the commemoration of the centenary of independence, in which the whole of Luxembourgish society participated, became a reaction against the German threat.^[20] The government skilfully used the commemoration festivities to demonstrate to European public opinion the country's desire for independence. The commemoration succeeded in reconciling Luxembourgish society after it had been divided by the referendum of 1937, and reinforced national sentiments in the face of the external threat.^[20]

As a member of the League of Nations, Luxembourg thought itself safe from foreign designs, as Article 10 of the League of Nations charter reaffirmed the formal recognition of the territorial integrity and political independence of its member states. But when, in March 1936, Nazi Germany denounced the Locarno agreements, the principle of collective security was gradually abandoned by all states. While the great powers sought to ensure their security through a policy of alliances, small states sought to protect themselves through a policy of independence and neutrality.^[26]

Thus, the Luxembourgish government resumed its own negotiations with Germany and France to obtain guarantees of non-intervention in the event of armed conflict. Arduous talks took place in 1938 and 1939, both in Berlin and Paris. However, they did not result in the signing of agreements due to the Czechoslovak (October 1938) and Polish (September 1939) crises. Nevertheless, these talks had the merit of clarifying the policy of respect and guarantee that Germany and France intended to practice regarding the independence of the Grand Duchy. Despite the assurances given by Luxembourg's two neighbours, the fears of the Luxembourgish government had by no means completely disappeared. Indeed, it was scarcely imaginable that in the event of war between France and Germany, Luxembourg would remain out of the war. The country formed a convenient invasion corridor towards France. Moreover, it was served by an admirable road and rail network and was a major producer of steel, which in the event of conflict, was not to be underestimated.^[26]

Throughout the period mentioned, bilateral relations between Germany and the Grand Duchy remained very tense. It was understood that, for its own defence, Luxembourg had only its neutrality status, which the government attempted to scrupulously respect.^[26]

Trade unions and politics

From 1930, Europe was suffering the effects of the world economic crisis, and Luxembourg was not spared. However, the unemployment numbers in Luxembourg were kept at a tolerable level, at least until 1933, as since the 1920s boom large numbers of foreign workers had been brought in; when the downturn came, they were the first to be laid off, and were removed to their home countries.^[28] Consequently, they did not appear in Luxembourg's unemployment statistics.^[28] This situation applied particularly to the steel industry. In 1929, foreign workers made up 29,9% of the working population, but by 1939 this was down to 19,1%.^[28]

The Bech government (1926-1937) stood for a classic liberal economic policy and declined to intervene in the employment market in any way; it rebuffed the Workers' Party's suggestions of a minimum wage, unemployment insurance, or public investments programme.^[28] In 1932, Luxembourgers also started to be laid off, and the number of unemployed was estimated at 2,000.^[28] At the same time, due to pay decreases and unpaid furloughs, workers' purchasing power declined, so that businesses also suffered from the crisis.^[28] These developments had consequences both for politics and trade unions.

Communist successes

In 1928, the Communist Party of Luxembourg (KPL) had 200 members, hardly any of them Luxembourgish.^[28] For this reason, the government had never taken specific measures against the KPL.^[28] The depression after 1929 led to an upswing in the party's fortunes, which took place first at the trade union level. From the 1920s, the Communist International saw social democrats as the main enemy of the revolutionary working classes (whom the Communists believed they represented).^[28] Based on this, the KPL founded the Revolutionäre Gewerkschaftsopposition (RGO), the "Revolutionary Trade Union Opposition", to counter the socialist trade unions, especially the Luxembourg Mining and Metalworkers' Union (LBMIAV).^[28] The RGO achieved success especially with the miners, who were traditionally the most militant.^[28]

The rise of National Socialism in Germany, Clerical fascism in Austria, and rise of fascist movements in parliamentary democracies such as Belgium, France and elsewhere led the Comintern to change attitudes. Assuming that splitting the workers' movement would enable fascism, Communists embraced the popular front policy. The RGO in Luxembourg was disbanded in August 1934.

At the Chamber elections of 3 June 1934, a Communist Deputy was elected for the first time, Zénon Bernard, and the KPL only just missed out on a second seat, with 7,2% of the votes in the South constituency. This came as a shock both to the government and the Worker's Party.

The Bech government reacted harshly to the KPL's success. Bech, who as also the Education Minister, first dismissed two teachers, who were KPL members. On 27 November 1934, the election of Bernard was declared invalid, and the seat allocated to the Workers' Party.

In the local elections of October 1934, the Communists had taken seats in several communal councils. In Esch the KPL (with only one seat) even held the power to tip the scales. The KPL, following the popular front tactic, declared its intent to support a minority mayoral government of the Workers' Party. The Interior Minister Dumont however refused to appoint the mayor under these circumstances.

The need to create a legal basis to act against the KPL was becoming more and more urgent. An order law had first been proposed by Bech in 1933, and this was discussed at length by the government parties. The planned law was only shelved when in July 1935 the Workers' Party, Party of the Right and the Radical-Liberals agreed to a local coalition in Esch under the Worker's Party. Zénon Bernard was the sole councilmember in opposition.^[29]

It is highly likely that the Workers' Party in this way deliberately prevented the introduction of an order law (for a while). The trade union wing around Pierre Krier that dominated the Workers' Party was at this time not interested in a polarisation of the political fronts. The free (socialist) unions, on a reformist course, sought legal recognition by the public authorities and the right to negotiate as social partners with business owners over pay and working conditions. The Workers' Party and free trade unions therefore rejected outright any cooperation with the KPL in the 1930s.^[29]

In December 1934 the free trade unions and the Luxembourg Confederation of Christian Trade Unions agreed to establish a trade union Wages Commission for major industry. The goals of this cooperation were to achieve recognition as negotiating partners with employers, being able to engage in collective bargaining and collective agreements, and pay demands. In 1935 the unions went on the offensive with a demand for a minimum wage of 250 francs per week.

The employers' association refused any talks. The trade unions, whose presidents, Pierre Krier (LBMIAV) and Jean-Baptiste Rock (LCGB), were Deputies, now demanded a legal basis for their negotiation demands. There had been several parliamentary initiatives in this direction, including one by Pierre Dupong (Right Party). But it was only at the end of 1935 that the government was willing to debate it in the Chamber. A bill was drafted for the introduction of collective agreements. At the end of the discussions in the plenary (December 1935), Prime Minister Bech, after several previous attempts to delay, dropped one last bombshell. He requested the adjournment of the discussion due to alleged differences of opinion within the government coalition. The industrial lobby had indeed exerted such strong pressure, especially on the Radical Liberals, whose president was ARBED director Alphonse Nickels, that Bech once again backed down. The government won the subsequent vote of confidence.

The response from the trade unions came soon. In January 1936, a mass demonstration of 20,000-40,000 took place in the capital despite the freezing cold. To assess this success, it is important to know that as of January 1935, major industry employed 17,511 people. However, they found broad support, even among the middle class. Such a show of power came as a complete surprise to the Right, as they had always assumed that the trade unions were only strong as long as they did not need to show their strength.

In January 1938, the Chamber of Deputies once again debated the collective bargaining law. However, the provision that was supposed to introduce collective agreements was not passed by the (right-wing) majority in the Chamber. A "Conseil National du Travail" (National Labour Council) was established by grand-ducal decree, composed of representatives from employers, the government, and trade unions, which was to act as an arbitrator in collective labour disputes. In this respect, the trade unions were at least implicitly recognised as negotiating partners.

A logical consequence was that in March 1936, the Penal Code was finally amended, which had until then criminalised the formation of trade unions and any call for strikes.

The further development was strongly influenced by the neighbouring countries. In May 1936, the Popular Front won the parliamentary elections in France, and a large wave of strikes began to enforce social demands, affecting Lorraine in particular. In the Luxembourgish mines, which extended partly into French territory, secondary strikes took place to prevent the supply of Luxembourgish ore to French plants. In June, the Blum government was formed in Paris, and the "Matignon agreements" were concluded, providing for wage increases. Soon, the 40-hour workweek, paid holidays, and the right of collective bargaining were introduced. The French labour movement's achievements ignited a similar dynamic of demands in the Luxembourg worker milieu, which had close contact with colleagues in Lorraine.

In Luxembourg, negotiations for the miners were scheduled for early July. Since they had ended inconclusively on 9 July, the unions decided to call a strike for the first time in years. The strike vote on 11 July yielded a 99% approval rate. On 14 July, the strike commenced everywhere. The work stoppage was used to discuss the acceptance of the compromise. The strikers accepted the government's proposal, which closely approached the maximum demands of the unions. Thus, the first collective agreement in the Luxembourg heavy industry was reached, despite the lack of a legal basis. This resulted in a wage increase of 6%, the introduction of minimum wages, and the indexation of wages (which had previously only been applied to civil servants).

Following this breakthrough in mining, the industry could no longer fundamentally oppose collective bargaining negotiations. By 1939, approximately 60 such agreements had been concluded.

Order law

Throughout this entire period of intense social conflict, the project for an order law remained in the drawer. Bech resurrected it at the end of 1936. On 20 October 1936, the Luxemburger Wort. once again called for a ban on the KPL. At the opening of the parliamentary session, Bech demanded swift adoption of the order law. It remained on the parliamentary agenda until its vote on 23 April 1937.

An explicit connection between the events on the social front in the first half of 1936 and Bech's renewed initiative cannot be proven in the sources. Nevertheless, it is unlikely that Bech randomly resurrected the project just a few months later. Bech belonged to the socio-reactionary wing of the Right Party and had always been an avowed enemy of the trade unions. Like his coalition partner, he was very close to the leading circles of big industry. Furthermore, he was not a man for public appearances or grand speeches where he would have disclosed his motives. He preferred conversations in small circles with some notables of his class.

The breakthrough achieved by the unions in 1936 inspired them to new demands for 1937: a 40-hour work week, extension of paid vacation, increase in pensions, tax reform, etc. The positive economic situation since late 1936, thanks to the Luxembourg steel sector's deliveries to the German armaments industry, gave them new momentum. However, the employers were not interested in such demands. An order law would not only be a useful weapon in general in the social struggle but could also help further improve relations with the German Reich. This was understandable due to the steel industry's dependence on exports; a quarter of steel exports went to Germany in 1936. Furthermore, the right-wing parties and the industrial employers were deterred by the developments in France, which had significantly contributed to the social policy successes in Luxembourg.

Economy and society

Economic history

Luxembourg's economic history between the wars is marked by the following key periods: the 1920-1921 world crisis, the 1924 recession, the 1929-1933 decline, and the recovery of 1938.^[30] In interwar Luxembourg, two socio-economic worlds were in collision: the world of industry, and a more traditional one, the world of agriculture.^[31] It was a country that exported steel products, and imported finished consumer goods. Its heavy industry, making up for its enormous trade deficit in consumer objects, was compelled to export almost the entirety of its production.^[32] Out of an active population of 80,000 in 1929, more than half lived directly from the heavy export industries (iron and steel).^[32] It was an "open micro-economy", characterised by: 1) weak or non-existent domestic demand for certain products due to low population, making exportation necessary; 2) limited natural, human and financial resources that were insufficient and not varied enough to satisfy the panoply of national needs, leading to a need to import.^[33] The economy was dominated by the mining and steel industries, which depended in large part on the European and world markets.^[34]

Luxembourg's exit from the customs union with Germany brought about a profound restructuring of the Luxembourgish economy, especially with regards to currency.^[7] Until 1918, it was mostly German money that circulated in Luxembourg, while Luxembourgish francs only played a small role.^[7] The question of currency occupied a central place in the negotiations which led to the Belgium–Luxembourg Economic Union.^[7]

The years 1919-1922 were marked by unemployment, strikes, and lockouts. The economy picked up again in late 1923, leading to a few years of prosperity (1924-1929).^[35]

It was from the mid-1920s that economic growth became very significant. While the general world economic outlook is one explanation, equally this growth was also facilitated by the stabilisation of the franc (October 1926) and of the steel market (International Steel Agreement).^[36]

In 1922-1929, in the steel industry, production increased by 9.9% per year on average, while steelworkers' pay increased by 2.3% per year. The period saw workers' purchasing power effectively stagnate, alongside significant employment growth in the industry, and a remarkable increase in production. Productivity grew strongly. However, the expansion of the industry hardly improved the situation of workers.^[37]

It was not until 1935/36 that the recovery of the steel industry became a reality, and this due to sustained growth of exports. Industrial exports to a Nazi Germany pursuing a rearmament policy caused exports to Germany to reach 30% of the total.^[38] For the short period of 1935-1938, steel sector growth, sustained growth in productivity and real salaries, and a slight growth in the price of agricultural products, helped to possibly attenuate socio-economic conflicts.^[38]

Luxembourg's economy in the 1920s experienced important growth, of which the main beneficiaries were industrial employers rather than workers, especially in the steel industry.^[39] These same years of growth highlighted the tensions and socio-economic contradictions of interwar Luxembourg.^[39] These were not, then, revealed by the 1930s economic crisis, though it did consolidate and reinforce them, perpetuating them until 1936.^[39]

Long-term trends

In the long term, several industries in Luxembourg struggled with the sudden breaking of economic ties with Germany and the Zollverein immediately after World War I, having been hitherto dependent on German capital and expertise, as well as the German markets. Some industry sectors were successful in this struggle for survival, and some not. The drapery and glove industries in Luxembourg stagnated, then shrank, then disappeared.^[40] The leathermaking and clothesmaking industries went from crisis to crisis, and would eventually disappear after World War II.^[40] A large number of small or medium businesses, oriented entirely towards the German market, failed to find other outlets in the 1920s-1930s world marked by protectionism and dumping.^[40] Two recurring factors here are: 1) the disappearance of a very large protected market (German Zollverein), which could not be replaced by Belgium, as a much smaller and traditionally free-trade country; 2) the high cost of labour, due to the presence of a large and prosperous steel industry.^[40]

On the other hand, the main industry of the country, steel, managed to survive the transition from the Zollverein to the world markets. The separation from the German market was, certainly, a terrible blow. The fact that it was not a mortal one had several reasons. For one, steel was a fungible product, with no brand or trademark or national particularities.^[40] After a few years, Luxembourgish steel managed to set up a worldwide sales network.^[40] It also helped that in the 1920s and 1930s, the world was desperate for steel, and Europe was its principal exporter.^[40] In terms of raw materials, for steel, Luxembourg possessed its only natural resource, the Minette iron ore.^[40] When it came to coal, ARBED could still use its old links with Germany to secure coal supplies.^[40] The owners of capital remained foreign. The German owners had been expropriated, and their capital was taken over by French interests which invested them in Luxembourgish companies.^[40] Belgian capital on the other hand was spread widely spread out among the public.^[40] By 1937, ARBED had effectively become a public company from a financial standpoint, whose shares were mostly held by small investors.^[40] This was true to a lesser extent for HADIR. French and Belgian shareholders had been forced by circumstances to accord a large degree of latitude to company managers, such that one could from now on truly speak of a "Luxembourgish steel industry".^[40]

Population and demographic problems

Migration

Italian workers had left Luxembourg at the outbreak of World War I. While the economic situation was bleak immediately after the war, the economy recovered again from the mid-1920s. With the high economic activity, the Italians returned. They numbered 14,050 in 1930 compared to 10,138 just before World War I. Although they were more numerous, they did not regain their predominant position in the steel industry: while in 1913, 54.8% of Italians worked in the steel industry, they accounted for only 25.2% in 1930. The decline in the proportion of foreign workers in the steel industry was indeed a general phenomenon.^[35]

The decline of foreigners in the steel industry was compensated by their rise in the building and crafts sector. These post-war years were also marked by bitter internal disputes that tore apart the Italian community following the rise to power of fascism in Italy.^[35] According to a 1924 police report, "almost all Italians arriving in the country belong to the Communist party."^[41] These were, on the one hand, people fleeing their homeland because of their political beliefs, or otherwise who were expelled from France and Belgium due to their political activities. Communist elements were in a position of strength and took reprisal actions against the fascists. The Luxembourg authorities were concerned about this escalation of violence and the activities of a secret society called "la cravate rouge" (the red tie). The government showed vigour in repressing communists, with the most active ones being expelled. It was more lenient towards the fascists, as the steel industry and construction sectors were beginning to have an increasing need for Italian labour. It was necessary to avoid displeasing the new government in Rome for fear that it would prohibit emigration to Luxembourg.^[42]

Economic crisis and departure of foreign workers

In 1930, the number of inhabitants in Luxembourg reached the record figure of 299,782. Five years later, the 1935 census recorded for the first time in the demographic evolution of contemporary Luxembourg a decline: the population had decreased by nearly 3,000 compared to the 1930 census. This general demographic decline is explained by the significant decrease in the number of foreigners (55,831 foreigners in 1930, 38,369 in 1935, a decrease of 17,382), while the number of Luxembourgers increased by 14,382. The most significant demographic declines mainly affected the industrial cities of the Esch canton. While in 1930, the canton of Esch still accounted for more than a third of the total population of the country of Luxembourg, this was no longer the case in 1935. The explanation for this demographic regression lies mainly in the severity of the great global economic crisis. The economic crisis hit Luxembourg from early 1931, albeit with some delay compared to neighbouring countries. Exporting almost all of its production to an international market in full recession, the Luxembourg steel industry saw its production capacity decrease by about 40% (1930-36). The crisis was therefore also reflected in the decline in jobs in the steel industry. In 1929, the Luxembourg steel and mining industry employed 28,938 workers; in 1935, the workforce barely exceeded 17,500. However, this impressive decline did not result in a high percentage of unemployment.^[43]

The explanation for this specifically Luxembourgish socio-economic phenomenon lies in the significant percentage of foreign workers employed in the Luxembourgish industry: in 1930 the share of foreign workers in the total workforce exceeded 40%; by 1937, it had decreased to only 22%. The economic crisis therefore primarily affected foreign workers. When they were laid off, with no real prospects of re-employment, they left the country. Thus, it was the significant percentage of foreign workers that played a "safety valve function", since Luxembourgish social legislation required that most foreigners could only work in the country on the basis of an annual work permit. This protected Luxembourgish workers from foreign competition.^[43]

The use of foreign labour as a safety valve largely explains why the native Luxembourgish population was less severely affected than the populations of neighbouring countries. Additionally, the exodus of foreign workers (especially Italians) significantly strengthened the socio-cultural homogeneity of the Luxembourgish working class. In 1929, 65% of the workers employed in the national territory were of Luxembourgish origin; by 1937, this had increased to 80%. There was, then, a structural change in the mid-1930s of paramount importance both in the Luxembourgish working class and in society as a whole.^[44]

Rural exodus

In addition to this outflow of foreign workers, there was a second exodus that had been influencing the demographic and social structures of the Luxembourgish population since the end of the 19th century: the rural exodus. Between 1931 and 1935, the cantons where emigration far exceeded immigration were, in order of importance: Clervaux, Redange, Wiltz, Echternach, Grevenmacher, Capellen, Diekirch, Mersch, Remich, Luxembourg-campagne, and Vianden.^[c] As the canton of Esch also experienced a significant demographic decline, Luxembourg City was the only geographical entity whose population had increased (1931-1935: +7.34%). There was notably an increase in the number of foreigners by 1,200. On the other hand, during the same period, the capital attracted 2800 people from the Luxembourgish countryside. Thus, amid an economic crisis, the rural population continued to leave the countryside in favour of the city, and the canton of Esch. Therefore, only the capital and the canton of Esch showed an increase in population due to migration. The total population of the City of Luxembourg and the canton of Esch constituted more than 52% of the total population of the country, despite the departure of foreign workers from the industrial centres of the Upper Alzette. In other words, the bipolarisation of Luxembourgish society between the canton of Esch and Luxembourg City on the one hand, and the countryside on the other, was not called into question by the economic crisis.^[45]

Society and social structures

Economic sectors

In 1935, 30.2% of the workforce were engaged in agriculture (primary sector), and 43.2% were employed in industry (secondary sector), accounting for more than 2/3 of the workforce. The previous professional census, conducted in 1907, estimated the agricultural workforce at 43.2% and the secondary sector workforce at 38.4%. Between 1907 and 1935, the secondary sector (industrial) surpassed agriculture "which, despite the nearly 20% increase in population, saw a considerable decrease in its relative share, and even its absolute numbers." During this 30-year phase, the secondary sector certainly surpassed agriculture, but quantitative progression proved to be quite slow (+4.8% in 30 years). The rural and working-class worlds thus seemed to quantitatively dominate Luxembourgish society in the 1930s. The former had been in socio-economic decline since the end of the 19th century, while the latter had just been strongly shaken by the economic crisis.^[45]

Workforce by sector (%)
	Agriculture	Industry	Tertiary
1907	43.2	38.4	18.4
1935	30.2	43.2	25

The tertiary sector had been underdeveloped at the end of the 19th century and was developing at the beginning of the 20th century (18.4%). It grew considerably between 1907 and 1935. By the mid-1930s, 25% of the workforce were engaged in "services" (18.2% in trade, transport, hotels, and cafés; 6.8% in public and private services); the number of civil servants and employees increased from 5,500 to 18,382 in 28 years.^[45]

The strengthening of the tertiary sector, which sociologically determined the emergence of the middle classes, deserves some explanation. Economist C. Hemmer explains the increase in the distributive function by "the progressive concentration of the population in urban centres." This phenomenon, according to him, "led to a proliferation of retail stores and beverage outlets." Hemmer also emphasises that the development of tourism during the interwar period "caused a progressive multiplication of hotels, restaurants, and guesthouses." To explain the numerical increase in "white-collar workers," Gilbert Trausch identified the following factors: "due to the late establishment of the Luxembourgish state, the establishment and expansion of administrative services largely occurred in the 20th century. The extent of industrialisation, the rise of education, the increasingly interventionist policy of the state ... require a continuous growth of services."^[45]

The rural world

In 1938, the number of main agricultural farms was 12,038. In 1934, 45% of farmers owned one horse, while 30% owned two. 80% of farmer-operators worked alone or were assisted by family members. These figures confirm the predominance of small family farms in rural society. However, the small family farm, the cornerstone of the rural world between the wars, was in crisis. Several factors contributed to this: the world economic crisis, poor profitability of farms, and archaic agrarian structures largely explain the persistence of rural exodus, despite the strengthening of the protection regime for Luxembourgish agriculture by a benevolent government. And it was the young who left, abandoning a declining world for a world in crisis.^[46]

The working world

Young rural dwellers were leaving their villages for industrial centres, yet they often remained in close contact with the old world. German geographers Quasten and Schmithüsen, as well as historian Gilbert Trausch, have emphasised the importance of accessory farms as a link between the industrial world and the Luxembourgish countryside. A significant portion of workers from Luxembourgish rural areas owned small plots of land, typically less than 2 hectares. These farms were very common in the industrial region of the country (Esch canton). According to Gilbert Trausch, "a solid core of worker-farmers" had formed there. In cases where the worker gave up their accessory farm, they seemed to prefer renting out their land rather than selling it outright. The phenomenon of land ownership in the Luxembourgish working class constitutes, according to H. Quasten, a specifically Luxembourgish socio-economic characteristic. Quasten claims that: "the most important features of an industrial proletariat -propertylessness, high number of children-, were never exhibited by the industrial population of the Minett." This statement thus attempts to challenge the phenomenon of proletarianisation of the Luxembourgish working class. An enticing assertion... but dangerous due to its overly exclusive nature. The socio-economic complexity of the working-class world therefore remains an open problem for Luxembourgish historical research. At present, one can only affirm that behind the unifying term of "working world" lies a great diversity of conditions.^[47]

Conclusion

The two socio-economic pillars of Luxembourgish society in the 1930s were the rural world and the working world. One was in decline, the other in crisis; both the rural world and the working world were the two major "sick men" of Luxembourgish society in the 1930s. While farmers seemed to benefit from the financial support of a benevolent government, the working world, on the other hand, constituted a socially marginalised and politically dominated class. It was only around the mid-1930s that the working world timidly began its social and political integration into Luxembourgish society:

The departure of foreign workers during the economic crisis years favoured the socio-cultural consolidation of the working world.
The major struggles jointly led by the two main unions (socialist and Christian) for union freedoms and to obtain a collective contract system (for example: the major protest on 12 January 1936) simultaneously strengthened the socio-political cohesion of the working world.

It was thus both socio-cultural homogeneity and socio-political cohesion that enabled the working world to emerge from its isolation. Despite the significance of these upheavals, Luxembourgish society overall presented an image of a sick, stagnant, and blocked society. Such was the social framework in which the referendum of 6 June 1937 took place.^[47]

Culture and leisure

Tourism

Tourism experienced significant growth in Luxembourg in the late 19th century and just before World War I. Im 1907, the number of foreigners who spent more than one day in Echternach, for example, was 2,600, and by 1909 this number was 4,530.^[48] Tourism was facilitated by new technologies. The invention and spread of railways and bicycles, and later, of automobiles and motorbicycles, made travel for leisure easier and more comfortable, providing a great impetus to tourism — also in Luxembourg. Travellers came from many locations to spend holidays in the small country which had been mentioned of several famous writers who had stayed there. Due to this advertising, as well as that of official tourist organisations, Luxembourg was gradually becoming a centre of attraction for foreign tourists. This development saw a sudden end with the advent of Word War I and four years of fighting.^[48]

In the event, tourism recovered rapidly after the end of the war. People who had been forced to stay put due to the hostilities had a strong desire to return to their pre-war habits of holidays and traveling. There was also a need to forget the sad times they had experienced, and to celebrate having survived the long war years. Tourist numbers in Luxembourg showed strong growth up until 1930. Numbers then wavered, before remaining relatively stable, until the eve of World War II. The slowdown of 1930 was due to the world economic crisis and monetary imbalances.^[48]

In the 10 years after 1918, the number of hotels grew considerably, with some large modern hotels being built in Luxembourg City, Mondorf and Echternach. In addition, many people became aware of the possible profits from the hotel industry, and set themselves up running a hotel or guesthouse part-time. In 1939, there were 275 hotels and guesthouse in the country.^[48]

At the same time as this growth, tourism also became more diverse. Alongside tourism by car, walking tourism and cycling tourism had many followers. To this was added nautical tourism.^[48]

Cinema

The number of sound films shown in Luxembourg went up significantly from September 1930.^[49] Sound films turned out to be profitable for cinemas. In the bigger cities, audiences had a selection of two or three sound films per week, while it took the smaller cinemas another one or two years to acquire sound equipment.^[49] In 1930 Luxembourgish audiences could see – among others – the following sound films in cinemas: Le Collier de la Reine, Nuits de Prince, Weary River, Spite Marriage, Say it with Songs, All Quiet on the Western Front, King of Jazz, Melodie des Herzens, Der unsterbliche Lump, Der Korvettenkapitän, and Das Rheinlandmädel.^[50]

In 1931, 17 of the 36 Luxembourgish movie theatres had the equipment to show sound films. By next year, this figure had increased to 24.^[51]

Luxembourg had specific language conditions that allowed for a rich and diverse range of movies to be shown. In the 1920s, there was a relative balance between American, German and French films.^[51]

Civil society

Media

Newspapers

While the First World War unquestionably shook both the traditions of Luxembourgish society and its faith in progress, unlike the Second World War it did not cause a profound break in the evolution of the press. Under German occupation, Luxembourgish institutions continued to function, and newspapers continued to appear. The struggle between the political parties continued. At the same time, the first modern mass trade unions appeared during the war, and the workers' movement became radicalised but also divided. At the end of the war, Luxembourg experienced a profound political crisis that shook its institutiions and political culture. Universal suffrage and proportional representation were introduced, and a referendum decided the future of the monarchy and economic union.^[52]

The press had already become radicalised previously during the Kulturkampf period, and continued to do so during the interwar period with the split in the workers' movement, the proclamation of a Republic, and finally the rising fascist movement and controversy surrounding the "muzzle law" (Maulkuerfgesetz). Even before the end of the First World War, the first trade union newspapers were created, followed by the first women's magazines.^[52]

In late 1927, Paul Schroell sold his Escher Tageblatt newspaper and printing press for one million francs, to the Luxembourg Mining and Metalworkers' Union and the National Association of Luxembourgish Railway Workers. They began publishing the Escher Tageblatt on 14 December 1927. Following this transaction, the Socialist Party abandoned its own party organ. In April 1933, Germany brought two lawsuits against Escher Tageblatt, leading to its publication being banned within its territory, for insulting Hitler.^[53]

Already in 1913, the liberal Luxemburger Zeitung experienced a significant drop in its circulation after being banned by Bishop Jean-Joseph Koppes. The introduction of universal suffrage in 1919 further weakened the liberal party of the notables and its press. Publisher Émile Schroell consequently sold the majority of the newspaper, which had become unprofitable, to a group of shareholders around Émile Mayrisch, the general manager of ARBED. The repeated splits within the liberal party and the undeniable dependence of the Luxemburger Zeitung on heavy industry further weakened and discredited the newspaper.^[53]

Radio

From 1928, inhabitants of Luxembourg could listen to the first regular radio programmes, broadcast from Belgium.^[54] In 1930, Pierre Dupong, the Minister of Finance, signed a concession agreement with the newly founded Société luxembourgeoise d’études radiophoniques, run by French businessmen, which was awarded the monopoly over radio broadcast rights from the Grand Duchy.^[54] In 1931, this became the Compagnie luxembourgeoise de radiodiffusion. Its entertainment and advertising programming was broadcast in French or English.^[54] In 1939 its broadcasts were made to cease, in order to not endanger Luxembourg's neutrality in the tense international atmosphere of the time.^[54]

Church

Notes

^ Decrees of 27 August and 27 October 1927
^ In 1917, France had renounced any ambitions with regards to Luxembourg, but kept this secret from the Luxembourgish government, in order to conceal the intentions of the French negotiators. After the war, France intended to take advantage of the Luxembourg question, by obtaining from Belgium the conclusion of a military pact.
^ The deficit in Clervaux was 4,004; Redange: 3559; Wiltz: 3,154; Echternach: 3,023; Grevenmacher: 2,973; Capellen: 2,564; Diekirch: 1,974; Mersch: 1,945; Remich: 1,613; Luxembourg-campagne: 1,013; Vianden: 904

References

^ ^a ^b ^c ^d ^e ^f ^g Thewes 2011, p. 76.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ Thewes 2011, p. 81.
^ ^a ^b ^c ^d ^e ^f ^g Thewes 2011, p. 78.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o Thewes 2011, p. 82.
^ Thewes 2011, p. 82-83.
^ ^a ^b ^c ^d ^e ^f ^g Thewes 2011, p. 83.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ Thewes 2011, p. 84.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q ^r ^s ^t Thewes 2011, p. 85.
^ ^a ^b ^c ^d ^e ^f Thewes 2011, p. 88.
^ ^a ^b ^c ^d ^e Thewes 2011, p. 90.
^ ^a ^b ^c ^d ^e ^f Thewes 2011, p. 92.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q ^r ^s ^t ^u ^v Thewes 2011, p. 95.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q ^r ^s ^t ^u ^v ^w ^x Thewes 2011, p. 96.
^ Thewes 2011, p. 96-97.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q ^r ^s ^t Thewes 2011, p. 97.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q Thewes 2011, p. 98.
^ Thewes 2011, p. 98-99.
^ ^a ^b ^c ^d Thewes 2011, p. 99.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j Thewes 2011, p. 104.
^ ^a ^b ^c ^d ^e ^f ^g Thewes 2011, p. 107.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q ^r Thewes 2011, p. 79.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ Thewes 2011, p. 80.
^ ^a ^b ^c ^d ^e ^f Thewes 2011, p. 89.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k Thewes 2011, p. 94.
^ Thewes 2011, p. 89, 94.
^ ^a ^b ^c ^d ^e Hoffmann 2002, p. 2.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k Thewes 2011, p. 106.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k Lentz & Pauly 1987, p. 37.
^ ^a ^b Lentz & Pauly 1987, p. 38.
^ Wey 1990, p. 352.
^ Wey 1990, p. 340.
^ ^a ^b Wey 1990, p. 342.
^ Wey 1990, p. 343.
^ Wey 1990, p. 345.
^ ^a ^b ^c Trausch 1981, p. 466.
^ Wey 1990, p. 362.
^ Wey 1990, p. 359-360.
^ ^a ^b Wey 1990, p. 369.
^ ^a ^b ^c Wey 1990, p. 371.
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m von Kunitzki 1988, p. 5.
^ Trausch 1981, p. 466-467.
^ Trausch 1981, p. 467.
^ ^a ^b Wey 1987, p. 13.
^ Wey 1987, p. 13-14.
^ ^a ^b ^c ^d Wey 1987, p. 14.
^ Wey 1987, p. 14-15.
^ ^a ^b Wey 1987, p. 15.
^ ^a ^b ^c ^d ^e Anders 1960, p. 9.
^ ^a ^b Lesch 2005, p. 47.
^ Lesch 2005, p. 47-48.
^ ^a ^b Lesch 2005, p. 48.
^ ^a ^b Hilgert 2004, p. 173.
^ ^a ^b Hilgert 2004, p. 174.
^ ^a ^b ^c ^d Gordet, Yves (30 October 1979). "RTL: Satellit als Herausforderung". Luxemburger Wort (in German). p. 15.

Bibliography

Anders, Jérôme (21 October – 11 November 1960). "Le Tourisme Luxembourgeois depuis cent ans". d'Letzeburger Land (in French). No. 43, 46. p. 9.{{cite news}}: CS1 maint: date format (link)

Hilgert, Romain (December 2004). Les journaux au Luxembourg 1704-2004 (PDF) (in French). Service information et presse du gouvernement luxembourgeois. pp. 172ff. ISBN 2-87999-136-6.
Hoffmann, Serge (2002). "Les relations germano-luxembourgeoises durant les années 30" (PDF). Ons Stad (in French) (71): 2–4.
von Kunitzki, Norbert (15 April 1988). "Dieu est-il luxembourgeois? Heurs et malheurs d'une micro-économie (1re Partie)". d'Letzeburger Land (Dossier) (in French). pp. 1ff.

Lentz, Marc; Pauly, Michel (June 1987). "Der sozialpolitische Kontext des "Maulkorb"-Gesetzes: Die Arbeiterbewegung im Aufbruch" (PDF). Forum. No. 97.
Lesch, Paul (2005). "The Transition from Silent to Sound Film in a Small, Multi-Lingual Country. Luxembourg as a Case Study". Cinéma & Cie. Film and Media Studies Journal. 5 (6): 42ff.
Thewes, Guy (2011). Les gouvernements du Grand-Duché de Luxembourg depuis 1848 (PDF) (in French). Luxembourg: Le Gouvernement du Grand-Duché de Luxembourg - Service information et presse. ISBN 978-2-87999-212-9.
Trausch, Gilbert (1 October 1981). "L'immigration italienne au Luxembourg des origines (1890) à la grande crise de 1929". Hémecht (in French). 33 (4): 443ff.
Wey, Claude (June 1987). "La société luxembourgeoise 1930-1937" (PDF). Forum (in French). No. 97. pp. 13ff.
Wey, Claude (1 July 1990). "Le Luxembourg, une petite économie ouverte pendant l'entre-deux-guerres: Essais sur l'histoire économique du Luxembourg contemporain: I. — Croissance et crise en économie luxembourgeoise (1918-1940)". Hémecht (in French). 42 (3): 337ff.

@@ Line 40: / Line 40: @@
 ===== Currency =====
-Luxembourg's exit from the customs union with Germany brought about a profound restructuring of the Luxembourgish economy, especially with regards to currency.{{Sfn|Thewes|2011|p=84}} Until 1918, it was mostly German money that circulated in Luxembourg, while Luxembourgish francs only played a small role.{{Sfn|Thewes|2011|p=84}} The government took advantage of its exit from the Zollverein to create a proper national currency, a symbol of its sovereignty.{{Sfn|Thewes|2011|p=84}} A decree of 11 December 1918 regulated the exchange of the 200 million German marks in circulation, for Luxembourgish francs.{{Sfn|Thewes|2011|p=84}} This transaction brought about several logistical problems.{{Sfn|Thewes|2011|p=84}} The printing of new notes did not proceed fast enough, and the exchange rate of 1,25 was considered by some as an unjustified generosity towards investors by the state.{{Sfn|Thewes|2011|p=84}} The new franc was not backed by any gold reserves, and had no value abroad. The government also had the intention of creating a monetary union with Luxembourg's new economic partner.{{Sfn|Thewes|2011|p=84}} This partner's currency would be legal tender in the Grand Duchy.{{Sfn|Thewes|2011|p=84}} The question of currency occupied a central place in the negotiations which led to the Belgium–Luxembourg Economic Union.{{Sfn|Thewes|2011|p=84}} In 1921, the Grand Duchy borrowed 175 million Belgian francs.{{Sfn|Thewes|2011|p=84}}
+The government took advantage of its exit from the Zollverein to create a proper national currency, a symbol of its sovereignty.{{Sfn|Thewes|2011|p=84}} A decree of 11 December 1918 regulated the exchange of the 200 million German marks in circulation, for Luxembourgish francs.{{Sfn|Thewes|2011|p=84}} This transaction brought about several logistical problems.{{Sfn|Thewes|2011|p=84}} The printing of new notes did not proceed fast enough, and the exchange rate of 1,25 was considered by some as an unjustified generosity towards investors by the state.{{Sfn|Thewes|2011|p=84}} The new franc was not backed by any gold reserves, and had no value abroad. The government also had the intention of creating a monetary union with Luxembourg's new economic partner.{{Sfn|Thewes|2011|p=84}} This partner's currency would be legal tender in the Grand Duchy.{{Sfn|Thewes|2011|p=84}}  In 1921, the Grand Duchy borrowed 175 million Belgian francs.{{Sfn|Thewes|2011|p=84}}
 ===== Steel industry =====
@@ Line 194: / Line 194: @@
 Luxembourg's economic history between the wars is marked by the following key periods: the 1920-1921 world crisis, the 1924 recession, the 1929-1933 decline, and the recovery of 1938.{{Sfn|Wey|1990|p=352}} In interwar Luxembourg, two socio-economic worlds were in collision: the world of industry, and a more traditional one, the world of agriculture.{{Sfn|Wey|1990|p=340}} It was a country that exported steel products, and imported finished consumer goods. Its heavy industry, making up for its enormous trade deficit in consumer objects, was compelled to export almost the entirety of its production.{{Sfn|Wey|1990|p=342}} Out of an active population of 80,000 in 1929, more than half lived directly from the heavy export industries (iron and steel).{{Sfn|Wey|1990|p=342}} It was an "open micro-economy", characterised by: 1) weak or non-existent domestic demand for certain products due to low population, making exportation necessary; 2) limited natural, human and financial resources that were insufficient and not varied enough to satisfy the panoply of national needs, leading to a need to import.{{Sfn|Wey|1990|p=343}} The economy was dominated by the mining and steel industries, which depended in large part on the European and world markets.{{Sfn|Wey|1990|p=345}}
 [[File:Banco Spuerkeess, ciudad de Luxemburgo, Luxemburgo, 2023-12-17, DD 81.jpg|thumb|The former [[ARBED building|headquarters of the ARBED steel company]], constructed in 1919-1921, during a period of turbulence and uncertainty as to the status of Luxembourg's economy and its steel industry in particular]]
-Luxembourg's 1918 exit from the customs union with Germany brought about a profound restructuring of the Luxembourgish economy.{{Sfn|Thewes|2011|p=84}} Until 1918, it was mostly German money that circulated in Luxembourg, while Luxembourgish francs only played a small role.{{Sfn|Thewes|2011|p=84}} The government took advantage of its exit from the {{Lang|de|Zollverein|italic=no}} to create a proper national currency, a symbol of its sovereignty.{{Sfn|Thewes|2011|p=84}} The government also had the intention of creating a monetary union with Luxembourg's new economic partner.{{Sfn|Thewes|2011|p=84}} This partner's currency would be legal tender in the Grand Duchy.{{Sfn|Thewes|2011|p=84}} The currency question occupied a central place in the negotiations which led to the Belgium–Luxembourg Economic Union.{{Sfn|Thewes|2011|p=84}} In 1921, the Grand Duchy borrowed 175 million Belgian francs.{{Sfn|Thewes|2011|p=84}}
+Luxembourg's exit from the customs union with Germany brought about a profound restructuring of the Luxembourgish economy, especially with regards to currency.{{Sfn|Thewes|2011|p=84}} Until 1918, it was mostly German money that circulated in Luxembourg, while Luxembourgish francs only played a small role.{{Sfn|Thewes|2011|p=84}} The question of currency occupied a central place in the negotiations which led to the Belgium–Luxembourg Economic Union.{{Sfn|Thewes|2011|p=84}}
 The years 1919-1922 were marked by unemployment, strikes, and lockouts. The economy picked up again in late 1923, leading to a few years of prosperity (1924-1929).{{Sfn|Trausch|1981|p=466}}

Revision as of 18:42, 19 April 2024

Background

Political history

Reuter government

Revolt, mutiny, republic, abdication, referendum

Constitution and universal suffrage

Elections: new political reality

Social policy

Economic policy

Currency

Steel industry

Railways

Prüm government

Social policy

Bech government

Economic policy

Belgian currency devaluation

Stock exchange and holdings law

Social policy

Housing

Muzzle law

Dupong-Krier government

1939 independence centenary

Foreign relations

New economic partner

League of Nations

Railways

Bech's foreign policy: assuring security, maintaining neutrality

Maintaining the UEBL

Relations with Nazi Germany: growing tensions

Trade unions and politics

Communist successes

Order law

Economy and society

Economic history

Long-term trends

Population and demographic problems

Migration

Economic crisis and departure of foreign workers

Rural exodus

Society and social structures

Economic sectors

The rural world

The working world

Conclusion

Culture and leisure

Tourism

Cinema

Civil society

Media

Newspapers

Radio

Church

See also

Notes

References

Bibliography

Further reading