Freedom in the World
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In June 2004, the main party in Luxembourg's governing coalition did well at a general election, assuring the reelection as prime minister of Jean-Claude Juncker. However, the center-right junior party did poorly and was replaced by a center-left party in the new governing coalition. Juncker was also widely considered to be a strong candidate for president of the European Commission, the executive of the European Union (EU). However, having promised that he would stay on if he won the election, Juncker remained the Grand Duchy's prime minister.
The Grand Duchy of Luxembourg was established in 1815, after the Napoleonic wars. Following a brief merger with Belgium, it reemerged with its current borders in 1839. The country has always faced the possibility of domination by its neighbors - it was occupied by Germany during both world wars - and it abandoned neutrality in favor of joining NATO in 1949. After joining in an economic union with Belgium and The Netherlands in 1948, Luxembourg became one of the six founding members of the European Community (now the EU) in 1957. Because it has a small, open economy, Luxembourg's relationship with the EU is highly important in its politics; it adopted the euro as its currency in 1999. A former prime minister, Jacques Santer, served as president of the EU's commission from 1995 to 1999.
Over the course of 2003, the opinion-poll ratings of the center-right Democratic Party (PD) fell, while the opposition Socialist Worker Party of Luxembourg's (POSL) rose. It was therefore little surprise when the PD did poorly in the general election of June 2004, losing 5 of its 15 seats in parliament. The POSL gained a seat, holding 14 seats in the new parliament, and joined Juncker's Christian Social Party in government as a junior partner.
Luxembourg is a strong proponent of greater European integration through the EU. In 2004, the 25 member states of the EU finalized a new draft constitution for the EU, and simultaneously chose a new president for the European Commission, which serves as the EU's executive and civil service. Negotiations over both were difficult and sometimes bitter, but shortly after Luxembourg's own election, a text was completed which would strengthen European cooperation in many areas.
In the fraught negotiations over the choice of a new commission president, Juncker's name was often mentioned as a potential compromise candidate, as he is widely respected and offensive to none of the EU's biggest members. However, he had promised to remain prime minister if his party won the general election and kept that promise. Nonetheless, the new constitution, if ratified, would also create a new presidency of the European Council (representing the member states rather than the EU itself). Juncker has also been spoken of as a candidate for this job.
Luxembourgers can change their government democratically. The head of state is the unelected Grand Duke Henri, but his powers are largely ceremonial. The unicameral legislature consists of 60 deputies elected by proportional representation. Voting is compulsory for all who are registered. (Residents from EU countries may vote after six years' residence but are not obliged to do so; non-EU residents may not vote. Foreigners comprise a third of Luxembourg's population.)
The political party system is open to the rise of new parties, as seen by the growth of the Action Committee for Democracy and Pension Reform, originally a one-issue party focusing on higher pensions, which first had deputies elected in 1989 and is now a significant party. There are three traditionally strong parties in Luxembourg's politics: the Christian Social Party (PCS), traditionally aligned with the Catholic Church; the Democratic Party (PD), which favors free-market economic policies and a smaller welfare state; and the Socialist Worker Party (POSL), a formerly radical but now center-left party representing the working class. The current government, elected in 2004, is a coalition of the PCS, which has taken part in almost all governments in Luxembourg's modern history, and the POSL.
The government is largely free from corruption; Transparency International, a corruption watchdog, ranked Luxembourg the 13th cleanest of the 146 countries it surveyed in 2004.
Freedom of expression is guaranteed by the constitution, and Luxembourg has a vibrant media environment. A single media conglomerate, RTL, dominates the broadcast radio and TV market, and its broadcasts are popular in Luxembourg's neighboring countries. Newspapers represent a broad range of opinion. Internet access is unrestricted.
Roman Catholicism is the dominant religion, but there is no state religion and the state pays the salaries of ministers from a variety of religions. Students may choose to study either the Roman Catholic religion or ethics; most choose the former. Protestant education is available on demand.
Freedom of assembly and association is protected. Civic groups and NGOs may operate freely, and Luxembourgers may organize in trade unions. The right to strike is constitutionally guaranteed.
The judiciary is independent, but its judges are appointed by the grand duke. Prisoners are humanely treated in police stations and prisons. Luxembourg's Muslim minority, mainly of Bosnian origin, faces no official hostility but does experience some mild social racism.
In part because of its conservative social mores, women comprise just under 40 percent of the labor force, and there remains a significant gap between men's and women's wages. Though abortion law does not technically provide for abortion on demand, a woman who has had an abortion while under "distress" is considered not to have violated the law, and "distress" is interpreted liberally.