10 Euro Cents – Grand Duchy of Luxembourg

In 2007, the Grand Duchy of Luxembourg was a fully integrated member of the Eurozone, having adopted the euro as its sole legal tender on 1 January 1999 (for electronic transactions) and seeing the introduction of euro banknotes and coins in 2002. This move permanently replaced the Luxembourgish franc, which had been pegged to the Belgian franc since the 1920s under the Belgium-Luxembourg Economic Union (BLEU). Consequently, by 2007, Luxembourg's monetary policy was entirely set by the European Central Bank (ECB) in Frankfurt, with the country participating in the common interest rate and exchange rate regime aimed at price stability across the Eurozone.

The domestic currency situation was characterized by robust economic health, with Luxembourg enjoying one of the highest GDP per capita rates in the world, driven by its dominant banking, financial services, and steel sectors. This prosperity, coupled with its status as a founding EU member, solidified its commitment to the euro project. The Central Bank of Luxembourg (BCL) operated as part of the Eurosystem, responsible for implementing ECB policy, ensuring financial stability, and issuing euro coins (with the Luxembourgish national side). Notably, Luxembourg, like other Eurozone members, did not have the autonomy to devalue its currency to gain competitive advantage, relying instead on fiscal policy and structural reforms.

However, 2007 marked the beginning of the global financial crisis, which would soon test the Eurozone's framework. While the immediate currency situation in Luxembourg appeared stable, the underlying vulnerabilities in international banking systems—highly relevant to Luxembourg's economy—were starting to surface. The year ended with growing uncertainty, setting the stage for the severe financial storms of 2008 that would challenge the stability of the euro itself and Luxembourg's financial-centric economy, despite the solidity of its currency union membership.