1839-1914 - Economic and Political Development
FA favorable combination of circumstances enabled the Grand Duchy firstly to see the light of day, and subsequently to increase its autonomy. During the 19th century, however, this tiny country, never failing to arouse the envy of its neighbours, was given but a small chance of survival by international observers. Contrary to all expectations, however, the Luxembourg people were to succeed in building a sovereign state, endowed with a true national cohesion and founded on a solid economic basis.
The country's first task consisted in defining an institutional framework. Three successive constitutions dated 1848, 1856 and 1868 conferred a structure upon the young state and established a fair balance between the powers of the sovereign, responsible for appointing and dismissing the government, and those of the Chamber of Deputies (Parliament), responsible for passing laws. The political regime of the Grand Duchy was that of a representative democracy in the form of a constitutional monarchy. Yet true democracy did not occur until 1919, when universal suffrage for men and women alike was introduced. Previously, the right to vote had been granted on the basis of fiscal criteria.
Political life intensified on the eve of the First World War with the emergence of political parties: the socialist party in 1902-1903, the liberal league in 1904 and the party of the right in 1914. The communist party did not form until 1921 following a split from the socialists. The Luxembourg political landscape has been characterised by an extraordinary stability. Since 1919, all the governmental coalitions - with the exception of two short periods (1925-1926 and 1974-1979) - have been led by the party of the right, which became the Christian-Social Party after 1945.
After 1839, the most challenging task consisted in providing the young state with viable economic foundations. Initially, Luxembourg was an agricultural country with outdated structures. It was home to a handful of small industries - tanneries, textile plants, potteries, traditional forges, paper mills, breweries - but these were scattered and not on a large scale. Luxembourg was suffering from its economic and geographical isolation.
Economic development thus meant the country had to open up. In 1842, the Grand Duchy entered the Zollverein. This union, which provided access to the market across the Rhine, proved to be beneficial for Luxembourg. Germany supplied it with the capital and labour required to develop its heavy industry. But in order for economic trade to take place, good communication routes were necessary. The construction of the railway lines - the first connection from Luxembourg to Thionville was inaugurated in 1859 - linked the Grand Duchy to the outside world, while also unifying the national territory.
Membership in the Zollverein and the construction of the railway network created favorable conditions for economic takeoff. But it was the discovery of iron ore deposits in the south of the country during the early 1840s that allowed Luxembourg to launch its industrial revolution. From 1870 onwards, large-scale steelworks were erected in the mineral basin. Called "minette" due to its low iron content, the Luxembourg mineral contained a lot of phosphorus, which initially was a disadvantage. The acquisition of the Thomas-Gilchrist process by Luxembourg steel producers in 1879 enabled the conversion of phosphorous pig iron into steel.
Henceforth, the Luxembourg steel industry was able to hold its own on an international level. On the eve of the First World War, Luxembourg ranked among the world's six largest producers. In 1911, several companies fused to create ARBED (Aciéries réunies de Burbach, Eich et Dudelange / Integrated steelworks of Burbach, Eich and Dudelange), which became the main player of the Luxembourg steel industry.
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