5 Euro – Grand Duchy of Luxembourg

In 2010, the Grand Duchy of Luxembourg was a fully integrated member of the Eurozone, having adopted the euro as its official currency on 1 January 1999. The country was therefore operating under the monetary policy of the European Central Bank (ECB), which set interest rates and managed the single currency for the entire bloc. This meant Luxembourg had relinquished control over its national monetary policy, a trade-off for the benefits of currency stability and deeper economic integration within the European Union, particularly with its key trading partners Germany, France, and Belgium.

The global financial crisis of 2007-2008 and the subsequent European sovereign debt crisis, which intensified in 2010, formed the crucial backdrop for Luxembourg's currency situation. While Luxembourg's own public finances remained relatively strong compared to other Eurozone members, the stability of the euro itself came under significant market pressure. Concerns over sovereign debt in Greece, Ireland, Portugal, and others led to volatility and a loss of confidence in the euro, affecting all member states. Luxembourg's economy, heavily reliant on its large financial sector, was particularly sensitive to this financial turbulence and the associated threats to the currency union's cohesion.

Domestically, the euro's stability was paramount. Luxembourg's economy, characterized by a high degree of openness, cross-border workers, and its role as an international financial centre, depended heavily on the predictability and credibility of the single currency. The 2010 period was thus marked by Luxembourg's active political support for stronger Eurozone governance and fiscal discipline mechanisms to safeguard the euro. The government, under Prime Minister Jean-Claude Juncker (who also chaired the Eurogroup), was a key advocate for the European financial stability facilities established in 2010, viewing the defence of the euro as essential for its own national economic security.