Luxembourgers had little cause for worry in 1976. Despite a slight drop in iron and steel production — the mainstay of its economy — and a corresponding decline in the gross national a product, the grand duchy remained one of the most economically secure places throughout Europe, with a minimal 11% rate of inflation, a s basically contented work force, and no unemployment to speak of.
However, during the year, there were some minor sensations, principally in the area of foreign affairs.
In February, Time Magazine reported that the Soviet mission to Luxembourg, with its large I staff of 37, was in reality a regional headquarters for Soviet intelligence operatives and that the Soviets regularly used Luxembourg’s unguarded borders to infiltrate into neighboring, allied countries. The revelation hardly surprised Luxemburgers but was embarrassing nevertheless.
Soviet operatives notwithstanding, Luxembourg’s allies had little reason to question either its security or fidelity. Luxembourg, with its battalion-size army of 550 volunteers (which includes a 100-man band), is an active, if not overly significant, member of the North Atlantic Treaty Organization (NATO). Its troops eagerly and ably participated in the huge NATO Autumn Forge ’76 maneuvers.
In July U. S. Secretary of State Henry Kissinger visited Luxembourg for a friendly chat with Prime Minister Gaston Thorn. Despite the spread of anti-American sentiment elsewhere in Europe, Luxemburgers still feel grateful to the United States for liberating them in World War II, and relations between the two countries remain particularly close.
Luxemburgers also remain fervent advocates of European integration. The duchy’s commitment to the European Economic Community (EEC) was underlined when Finance Minister Raymond Vouel was appointed to be its representative on the EEC board of commissioners. Prime Minister Thorn was president of the EEC’s council of ministers for the first half of 1976.