Economy of Van Luxemburg

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Economy of Van Luxemburg
Currency Van Luxemburger Florin (ƒ, VLF)
1 January
GDP $3,440 billion (PPP)
GDP growth
1.4% (2015)
GDP per capita
$38,440 PPP
GDP by sector
agriculture: 1.5%; industry: 32%; services: 66.5% (2014 est.)
Labour force
45 million (2014 est.)
Unemployment 4%
Exports $? billion
Export goods
Automobiles, Aircraft, Machinery, electrical equipment, capital goods, foodstuffs, military hardware
Main export partners
Ruccola, Jungastia, Valcluse, Morieux, Berry, Styria Sondstead,
Imports $? billion
Import goods
Petroleum, coal, natural gas, rubber, rare earth materials, iron and steel, aluminium
Main import partners
Pollona, Sondstead, Morieux, Prekonate, Questers
Public finances
88% of GDP (2014)
Foreign reserves
US$150 billion

The Economy of Van Luxemburg is one of the larger economies in Maredoratica, with a total GDP of $3.4 trillion and one of the highest GDP per capita (PPP) in the region, at $38,440.

As a net exporter, Van Luxemburger is particularly well known for its industrial products, such as automobiles, aircraft, machinery (robotics) and defense equipment. Its positive trade surplus of $160 billion is the second highest in the region, mainly due to exports of capital goods. The industrial sector of Van Luxemburg also generates a sizeable percentage of the GDP, even though it employs less workforce than the service sector. In total, the industrial sector is responsible for 32% of GDP, whereas agriculture is responsible for 1.5% and the rest is attributed to the service sector, 66.5%.

Over the last years, the state has managed a small but stable growth of around 2%, less than in earlier decades. With an unemployment level of around 4% and a population growth of 0.2%, Van Luxemburg is becoming more and more dependent on foreign immigrants, many of whom are attracted from other Martigues Agreement states. Van Luxemburg was one of the founding countries of this open-border agreement.

Much of Van Luxemburg’s economy is based on the concept of collective bargaining, which occurs through the Social-Economic Council which seats government representatives, union and non-union employee representatives, employer representatives and a number of other interest groups such as the central bank, health insurers, equal rights groups and many others, depending on the subject of discussion. The outcome of SEC sessions is binding or non-binding, depending on the verdict of the council itself.


With the Social-Economic Council (Sozial-Ekonomische Grupp, SEG) guarding the interests of all involved parties, the economy of Van Luxemburg can be characterised as a very democratic and relatively egalitarian. This also stretches down to all commercial organisations in the country, where works councils (Matbestëmmungsconseil) consisting of a number of employee-chosen representatives and the company board, must meet once a month.

This has generally also resulted in what is a very open discussion between subordinates and their superiors. Even though it is clear that the superior has the final say and this authority should not be challenged to the extreme, the national managerial culture also tends to accept employees weighing in on decisions involving them.

In Van Luxemburg, it is possible to register various types of company with a chamber of commerce. Even though some are more popular than others, the most popular types are:

  • Personfirma or Familiefirma (PF or FF). These are not legal entities, but serve to obtain a registration number that allows other entities to invoice ex VAT. The person registered as the owner is thus also personally responsible for the financial situation of this firm. Should a PF or FF go bankrupt, this would also bankrupt the registered owner. Most small firms, employing up to 5 personnel, are registered as a PF or FF.
  • Beschlossen Vennotschaft (BV) – Legal entity that is a limited liability company. Must have a registered board with their respective shares held in the company listed in the foundation act. The vast majority of Van Luxemburger companies use this form.
  • Nummlose Vennotschaft (NV) – legal entity similar to a public company.

In terms of wages and regulations, Van Luxemburg is highly regulated. It has mandated that the minimum wage must be a living wage, which is defined as 10% above the poverty line (which is set at $12,600 for singles. Regulations for couples with children are not taken into account as this is provided through government aid.), assuming a 40-hour work week. Should an employee be working less than this, he or she must be remunerated on an equal basis, relative to the hours worked.

Even though the 40-hour work week is used for the calculation of the living wage, Van Luxemburgers often tend to work either 36 or 38-hour work weeks. The weekend is defined as Saturday and Sunday, but only on Sunday and on national holidays, a worker is entitled to a higher salary of 150% for hours worked. The same applies to work performed between 22:00 and 05:00 every day.

A Van Luxemburger receives at least 20 days of paid holiday a year, which does not include national holidays:

Which are required, paid days off. Some enterprises however continue work during these days, which requires personnel to be paid 150% and a dispensation from the municipality.

In addition to paid holiday, the employer is required to submit towards both a pension plan and a health insurance plan, of which the employee is required to pay the remaining sum (even though the government also contributes to the general fund of both, in case of a pension by offering a guaranteed living wage, and in case of a health insurance by subsidizing the basic health insurance). In case of illness, the employee remains paid for the first 3 weeks, after which his pay is reduced. A government institution checks absence and may rule in favour of full payment after 3 weeks in case of serious illness (e.g. cancer). Maternity leave is equal for both men and women, and amounts to 16 weeks which may be freely scheduled around the time of birth.

In the Grand Duchy, the government offers tax benefits for companies offering their employees company cars (or motorbikes, or bicycles), depending on the emissions of the particular vehicle. Employees may be expected to pay an employer-set fee towards their company cars. Nevertheless, this serves as a powerful catalyst to the national motor vehicle sales, making Van Luxemburg one of the largest car markets in Maredoratica.

The social security programme of the Grand Duchy is also extensive. Even though the programme has always been focused on re-integrating unemployed workers back into working life, recent criticism has caused the programme to be more tightly controlled. This means that in addition to the fact that a job application must be made every week, the unemployed is also required to take every job he is offered. Should the job pay less than the social security pays (80% of the previous wage for the first 3 months of unemployment, partly at the cost of the previous employer, all the way down to living wage after 1 year of unemployment), social security will temporarily supplement the salary.


Even though Van Luxemburg is primarily known for its industrial output, it also has sizeable agricultural and service sectors.