Luxembourg and European integration: from the ECSC to the euro

A quarter of the exam questions cover history and European integration, and this last part is particularly rewarding: the facts are few, clearly dated, and Luxembourg plays a central role that gives the whole thing meaning.

Why Luxembourg committed so early#

Two occupations in thirty years, despite a neutrality written into the Treaty of London of 1867, provided a brutal demonstration: for a small state, isolation is not protection.

After 1945 the country therefore abandoned neutrality and joined everything available in terms of cooperation:

• Benelux — customs then economic union with Belgium and the Netherlands, prepared during exile;
• the United Nations, 1945;
• NATO, 1949;
• the Council of Europe, 1949;
• the Marshall Plan — American aid for reconstruction.

See: Luxembourg during the two world wars.

1951 — The ECSC, the first stone#

The Treaty of Paris of 1951 created the European Coal and Steel Community, bringing together six states: France, West Germany, Italy, Belgium, the Netherlands and Luxembourg.

The founding idea was as simple as it was effective: place under a common authority the two resources essential to a war industry — coal and steel — so as to make a new conflict between these countries materially impossible.

For Luxembourg, whose economy then rested largely on steel, the stakes were direct. The country hosted the High Authority of the ECSC, its first executive institution. That is the origin of the lasting European presence in the capital.

Typical question: "Which organisation, the ancestor of the European Union, brought six states together around coal and steel?" — Answer: the ECSC. The alternative options offered are often NATO or the Council of Europe, which have nothing to do with it.

1957 — The Treaties of Rome#

The Treaties of Rome extended the ECSC's logic to the economy as a whole:

• the European Economic Community (EEC), with a common market;
• the European Atomic Energy Community (Euratom).

The same six states were signatories. This was the move from sectoral integration to general economic integration.

1985 — The Schengen Agreements#

On 14 June 1985, five states signed, in Schengen, a Luxembourg wine-growing village on the border with France and Germany, an agreement providing for the progressive abolition of checks at internal borders.

The choice of location was symbolic: a meeting point of three countries, on the Moselle. These agreements gave their name to the free-movement area that today covers much of the continent.

Remember: the Schengen Agreements were signed in Luxembourg. This is a national fact that is frequently tested.

1992 — The Maastricht Treaty#

The Maastricht Treaty created the European Union proper. Three major contributions appear on the syllabus:

1. European citizenship, which is added to the nationality of a member state without replacing it;
2. the commitment to a single currency;
3. the extension of cooperation to new fields, beyond the economy.

European citizenship has concrete effects: freedom of movement and residence, the right to vote and stand in municipal and European elections in the state of residence, and diplomatic protection.

1997 and 2007 — Amsterdam and Lisbon#

The Treaty of Amsterdam (1997) strengthened fundamental rights and cooperation in justice and home affairs.

The Treaty of Lisbon (2007, in force in 2009) reformed the Union's institutional functioning and gave the Charter of Fundamental Rights the same legal value as the treaties.

1999-2002 — The euro#

The euro was introduced as a book currency in 1999, then coins and notes entered circulation in 2002. The Luxembourg franc disappeared.

For Luxembourg, long tied to the Belgian franc through the UEBL, the euro confirmed a monetary integration that was already old in practice.

European institutions in Luxembourg#

The city of Luxembourg is one of the Union's three institutional hubs, alongside Brussels and Strasbourg. It notably hosts:

• the Court of Justice of the European Union;
• the European Court of Auditors;
• the European Investment Bank;
• the Secretariat-General of the European Parliament;
• several Commission directorates and Eurostat.

This is the direct legacy of 1951: the country that hosted the ECSC's High Authority has never stopped hosting European institutions.

The Union's institutions in brief#

The syllabus asks you to know the broad outlines:

Institution	Role
European Commission	Proposes texts, ensures the treaties are applied
European Parliament	Directly elected, co-legislator, scrutiny
Council of the European Union	Brings together member states' ministers, co-legislator
European Council	Brings together heads of state or government, sets direction
Court of Justice of the EU	Interprets and applies Union law

Three "councils" not to confuse: the Council of the European Union (ministers), the European Council (heads of state or government) and the Council of Europe (an organisation separate from the EU, human rights, Strasbourg). It is the nastiest vocabulary trap in the syllabus.

The EU and the Council of Europe: the decisive distinction#

	European Union	Council of Europe
Purpose	Economic and political integration	Human rights, democracy, rule of law
Rights text	Charter of Fundamental Rights	European Convention on Human Rights
Court	Court of Justice of the EU, in Luxembourg	European Court of Human Rights, in Strasbourg
Currency, common market	Yes	No

This distinction comes up in the "fundamental rights" questions as well as in the "history" ones. Mastering it earns marks in both blocks.

See: Who protects fundamental rights.

Revision card#

Year	Event
1949	NATO and Council of Europe
1951	Treaty of Paris: ECSC, High Authority in Luxembourg
1957	Treaties of Rome: EEC and Euratom
1985	Schengen Agreements, signed in Luxembourg
1992	Maastricht Treaty: European Union, European citizenship
1997	Treaty of Amsterdam
2002	Euro coins and notes
2007	Treaty of Lisbon

Test these dates on the free simulator, then revisit the complete timeline.