With a finance sector that accounts for a quarter of its GDP, Luxembourg is arguably as famous for its bankers as for its multilingualism. The Grand Duchy, with a population of just over 600,000, is home to 141 banks as well as the European Investment Bank, and its investment funds manage over EUR 4 trillion, making it the world’s second-largest investment center and the largest in Europe.
Luxembourg’s eponymous capital city forms the epicenter of its finance industry, but a mere 15 kilometers down the Alzette river lie the remnants of another pillar of its prosperity in days gone by. In the south of the country, along the French border, lie the Terres Rouges – roughly translated as “Red Lands” or “Land of the Red Rocks” – named after the iron ore deposits that painted a rusty facade over the region’s terrain and gave rise to the steel industry.
It was regions like the Terres Rouges that gave rise to the European Coal and Steel Community, one of the forerunners of today’s European Union. In 1960, at the height of a postwar economic boom driven by steel production, the iron and steel industry contributed 31 percent of Luxembourg’s GDP – more than finance does today – and steel production grew sixfold between 1945 and 1974. But the steel crisis of the 1970s drove many steel producers out of business, and Luxembourg started to shift the weight of its economy towards finance and its center of gravity towards the capital.
Yet it’s also the Terres Rouges that’s now playing host to an up-and-coming third pillar of Luxembourg’s economy: research and innovation. The last steel blast furnaces, located in the Belval neighborhood of Luxembourg’s second-largest city, Esch-sur-Alzette, closed in 1997, leaving behind 120 hectares of brownfield land. What followed was one of the country’s most ambitious revitalization projects to create the Cité des Sciences (City of Science), home to the main campus of the University of Luxembourg since 2015, as well as a startup incubator and a number of other research institutes.
Rather than simply being demolished to make room for a university campus, two of the three blast furnaces remain standing – one of which is open to the public as a museum – and serve as mementos to the region’s history and heritage, much as the university’s shiny new buildings represent its desired future. Completing the juxtaposition is a red office tower that houses both the Banque Internationale à Luxembourg (BIL) and RBC Investor Services – a nod to the main driving force behind the Luxembourgish economy today.
The Cité has yet to fully rise from the ashes of industrial Belval, with a number of faculties yet to relocate from the university’s other campuses in Luxembourg City. The groundwork, though, has been laid for a burgeoning community of over 6,000 students and around 2,000 faculty and staff, most of whom are already based in Belval – with economic and social benefits for a wider region still recovering from the effects of deindustrialization. Providing a vital touch of cultural life, and perhaps serving as its biggest draw for visitors, is Rockhal, Luxembourg’s largest live music venue, with three concert halls as well as studios and other facilities to support the local music scene.
That half-hour commute between the Terres Rouges and Luxembourg City is one that connects two increasingly divergent worlds that nonetheless form the building blocks of modern Luxembourg: that of finance and of industry; that of the present and of the past. Yet among the red rocks of southern Luxembourg, a small community is bucking the trend of deindustrialization and finding a new role for itself in an ever more globalized world.
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