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Invaded by Germany during both World Wars, the Grand Duchy amended its "perpetually neutral" status in 1948. A hub of the European Union, Luxembourg has helped guide Europe toward political and economic integration and is one of the 11 countries that participate in the euro currency. One of the main bases of the EU, the country is home to more than 220 banks, including the European Investment Bank. Although small in size, Luxembourg's central location, political stability, and multilingual population, along with tax incentives, have proved advantageous to it as a financial center. Foreign investment in light manufacturing and services has offset the decline in steel, once the nation's major industry.

The motto of the EU's smallest member, "Mir wëlle bleiwe wat mir sin-We want to remain what we are," reflects Luxembourg's strong sense of identity as an independent nation since 1839.