Luxembourg

Political relations

Luxembourg, which widely shares its culture, history and language with the Germanic world, is also very close to France. There is regular contact at ministerial, prime ministerial and Head of State levels.

Bilateral relations with Luxembourg are close and excellent. Our cross-border cooperation is a priority and is bolstered by the Franco-Luxemburgish Intergovernmental Commission (IGC) that was created in 2010. It meets annually and involves all cross-border cooperation actors, including ministers, prefects and local elected officials.

The intergovernmental seminar during the state visit to France by TRH the Grand Duke and Grande Duchess of Luxembourg in March 2018 saw the signing of further agreements which are followed up in this framework.
Following the 2020 renewal of the IGC for 10 years, the latest meetings have been held in Esch-sur-Alzette (October 2021) and Thionville (17 April 2023), bringing progress in the fields of mobility, teleworking, healthcare, training and culture.

Economic relations

France and Luxembourg maintain close economic relations, with significant flows of foreign direct investment in both directions. France has a significant business presence in Luxembourg, and has a significant place in the financial sector and labour market.

The COVID-19 pandemic did however affect the volume of trade in goods between the two countries, which fell by 17% in 2020 before recovering significantly in 2021 (31%) and 2022 (13%, bringing the total to €5 billion), due to strong inflationary pressure. The French trade surplus fell by half between 2019 and 2020 to €416 million (as against €910 million in 2019), before returning to pre-COVID-19 levels in 2021 and exceeding them in 2022 (€1.1 billion).

France is Luxembourg’s third-largest supplier and second-largest customer. When it comes to services, volumes have more than doubled since 2012 (€16.3 billion in 2021), and are more than four times higher than those of goods, with France producing a record surplus of €2.4 billion in 2021.

The stock of Luxemburgish foreign direct investment in France has been rising since 2000, reaching the record level of €163 billion in 2021. Luxembourg remains the leading investor in France as immediate investing country, but is in eighth place as ultimate investing country (€35 billion). France also has a significant presence in Luxembourg (€51 billion in outward foreign direct investment stock in 2021), particularly in financial services (around 15 banks). In addition to financial services, French subsidiaries in Luxembourg are primarily active in retail (17%, with Galeries Lafayette, Fnac and Auchan, for example) and information and communication technologies (8.5%).

Trade in goods between France and Luxembourg is primarily inter-industry and industrial goods are central: the most important sectors are basic metal products and ferroalloys, non-dangerous industrial waste and air- and spacecraft.
French cross-border workers also represent 25.1% (122,000) of Luxembourg’s workforce and more than half (54% at end 2022) of the 221,600 cross-border workforce. Luxembourg therefore makes a positive contribution to the French trade balance, despite small trade volumes. Two French companies are among the country’s 20 leading employers: BGL BNP Paribas and Sodexo.