20 Francs – Grand Duchy of Luxembourg

In 1980, the Grand Duchy of Luxembourg was a full and active participant in the European Monetary System (EMS), which had been launched in March 1979. This system aimed to create a zone of monetary stability in Europe by reducing exchange rate volatility. Luxembourg's currency, the Luxembourg franc, was firmly pegged to the Belgian franc at a 1:1 parity through the Belgium-Luxembourg Economic Union (BLEU), an arrangement dating back to 1921. Consequently, the Luxembourg franc did not float independently but moved in lockstep with the Belgian franc within the EMS's Exchange Rate Mechanism (ERM), which allowed for limited fluctuations against other European currencies like the German Deutsche Mark.

Domestically, this arrangement provided significant economic stability for Luxembourg's small, open, and highly trade-dependent economy. The fixed link to the Belgian franc, and by extension the broader EMS framework, facilitated seamless cross-border transactions with its largest trading partner, Belgium, and helped control inflation. The Luxembourg franc itself existed primarily as banknotes and accounting units; Belgian franc banknotes circulated freely within the Grand Duchy, though Luxembourg issued its own distinct franc coins for everyday use.

Looking forward from the 1980 perspective, Luxembourg's currency situation was one of embedded integration, setting a clear trajectory toward deeper European monetary union. The stability of the EMS and the BLEU peg were seen as foundational steps. While the Luxembourg franc remained a national symbol, its practical operation was already deeply intertwined with European partners, laying the groundwork for Luxembourg's later enthusiastic adoption of the single European currency, the euro, decades later.