The Grand Duchy of Luxembourg - a small country landlocked by Belgium, France and Germany - is a prominent financial centre.
With roots stretching back to the 10th century, Luxembourg's history is closely intertwined with that of its more powerful neighbours, especially Germany.
Many of its inhabitants are trilingual in French, German and Luxembourgish.
Despite declaring its neutrality, Luxembourg was occupied by Germany during both World Wars.
After renewed occupation in the Second World War, Luxembourg abandoned its neutrality and became a front-rank enthusiast for international co-operation.
Luxembourg's prosperity was formerly based on steel manufacturing. With the decline of that industry, Luxembourg diversified and is now best known for its status as Europe's most powerful investment management centre.
Head of state: Grand Duke Henri
The ruling Grand Duke of Luxembourg succeeded to the title in 2000, on the abdication of his father Jean. He had already exercised the constitutional powers of the monarch since 1998.
Born in 1955, the future Grand Duke Henri studied politics in Geneva, where he met his Cuban wife Maria Teresa. He later underwent officer training at Britain's Sandhurst Academy.
The head of state's constitutional role is largely ceremonial, and in 2008 parliament further restricted it by rescinding the monarch's right to veto legislation.
Prime Minister: Xavier Bettel
Xavier Bettel formed a government in December 2013 after snap elections in October at which his Democratic Party, the Socialists and Greens emerged with a small majority over the largest overall group, the conservative Christian Social Party.
The vote was called after Jean-Claude Juncker of the Christian Social Party, who had been prime minister since 1995, lost his majority in parliament when the Socialists quit his coalition in July 2013 over a phone-tapping scandal.
The Christian Social Party had been in government since 1979.
Mr Bettel, the mayor of Luxembourg City between 2011 and 2013, is the country's first openly gay prime minister.
Luxembourg exerts immense media clout and has a long tradition of operating radio and TV services for pan-European audiences, including those in France, Germany and the UK.
Generations of British listeners grew up with Radio Luxembourg, which beamed pop music programmes into the UK. "The Great 208" is no more, but media group RTL is still a key player in media markets across Europe.
Luxembourg's media empire extends to the skies. It is home to Europe's largest satellite operator, Societe Europeenne des Satellites (SES), which operates the Astra fleet.
Some key dates in the history of Luxembourg:
1914 - First World War. Luxembourg is occupied by Germany until 1918.
1920 - Luxembourg joins the League of Nations.
1921 - Luxembourg enters economic union with Belgium.
1940-44 - Luxembourg is again occupied by Germany during Second World War.
1957 - Luxembourg becomes founder member of the European Economic Community, a fore-runner of the European Union.
2000 - Crown Prince Henri becomes Grand Duke of Luxembourg on the abdication of his father, Jean.
2009 - G20 adds Luxembourg to "grey list" of countries with questionable banking arrangements. Shortly afterwards the Organisation for Economic Co-operation and Development (OECD) commends Luxembourg for improving financial transparency with agreements with a dozen countries.