50 Francs – Grand Duchy of Luxembourg

In 1989, the Grand Duchy of Luxembourg was a fully integrated participant in the European Monetary System (EMS), established a decade earlier. Its currency, the Luxembourg franc (LUF), was permanently and irrevocably fixed at a 1:1 parity with the Belgian franc (BEF) through the Belgium-Luxembourg Economic Union (BLEU), a partnership dating back to 1922. This meant that while Luxembourg issued its own coins and banknotes, they circulated interchangeably with Belgian francs in both countries, with the Belgian central bank effectively guaranteeing the convertibility. Monetary policy for the franc zone was thus set primarily by Belgium's National Bank, albeit with Luxembourgish representation.

The domestic currency situation was exceptionally stable but lacked independent monetary tools. Luxembourg's economy, heavily focused on banking, steel, and emerging EU institutions, benefited from the fixed exchange rate which eliminated transaction costs and currency risk with its largest trading partner. However, this arrangement also meant Luxembourg had to align its interest rates and follow Belgium's lead on monetary matters, a trade-off for deep economic integration. The system functioned smoothly in 1989, providing a solid foundation for Luxembourg's thriving financial centre.

Crucially, 1989 was a pivotal year within the broader European context, setting the stage for profound change. The Delors Report, published in April, outlined a three-stage plan for achieving Economic and Monetary Union (EMU). As a founding and enthusiastic member of the European Community, Luxembourg was a committed advocate for this deeper integration. Therefore, while the franc zone provided stability in the short term, Luxembourg's financial and political authorities were already looking toward the future replacement of the Luxembourg franc with a single European currency—a process that would culminate a decade later with the introduction of the euro.