The Committee That Closed the Mills
Between the mid-1970s and the early 1990s Luxembourg shut down most of an industry that had employed close to 25,000 people in a country of about 360,000, and it did so without compulsory redundancies. The mechanism was a standing committee of ministers, employers and unions, and the country has never stopped using it.
The train from Luxembourg to Belval takes twenty-five minutes and puts you out on a platform underneath a blast furnace. There are two of them left at Belval, and furnace A is the one you can climb: a steel walkway up the casing to the platform where the charge went in, with the ore bunkers and the gas mains still in place around it. Underneath, on the ground the plant used to occupy, is the science faculty of the University of Luxembourg, a concert hall and a good deal of office space. Students eat lunch between the legs of it.
Furnace A was tapped for the last time in 1997, which was the last iron smelted anywhere in Luxembourg. It is worth being precise about what that ended. In 1974 the steel industry employed something close to 25,000 people in a country whose entire population was about 360,000, and it was the single largest thing in the economy by a wide margin. Within twenty years that workforce had been cut to a fraction of itself. Almost nobody was sacked.
What steel was here
The ore is the reason the country industrialised at all. The Minett, the south-western corner around Esch-sur-Alzette, Differdange, Dudelange and Rumelange, sits on beds of minette iron ore — low grade, high phosphorus, and useless until Thomas and Gilchrist worked out in 1878 how to smelt phosphoric ore. Luxembourg took up the process almost immediately and built an industry on a deposit nobody else had wanted. ARBED, formed in 1911 out of three existing works, became the country's dominant company and for most of the twentieth century its dominant political fact as well. The ore beds lay near-horizontal in the hillsides, so the Minett was mined through adits driven straight into the slope rather than shafts, and you can still ride a train into one at Rumelange.
The law of 1977
The world steel crisis arrived in 1974 and did not lift. Orders collapsed, capacity across the European Community stood tens of millions of tonnes above anything the market would take, and every producing country faced the same arithmetic. What Luxembourg did with it was institutional. A law passed at the end of December 1977 created a standing Tripartite Coordination Committee: the government on one side of the table, the employers' federation on another, the two large trade union confederations on the third, meeting not as a crisis summit but as a permanent fixture with the power to agree measures the government would then legislate. The state also took equity in ARBED, which made it simultaneously the regulator, the shareholder and the paymaster of the restructuring.
The tripartite works because Luxembourg is small enough that the people negotiating the closure of a plant will meet each other again next month over something else. That is not a moral achievement. It is a consequence of scale, and it does not export.
The Division Anti-Crise
The instrument everyone remembers came out of that table at the end of the decade. The Division Anti-Crise — the anti-crisis division — took steelworkers who were surplus to the mills and kept them employed, on their existing contracts, doing something else. They worked on roads, on forestry, on public buildings and on municipal projects, with the cost split between the company, the state and the social security system. Alongside it ran early retirement on terms available nowhere else in the economy, a freeze on recruitment so that natural wastage did the arithmetic, and retraining into the public sector and the banks. The DAC was wound up in the 1990s once the numbers had come out the far side. The claim made for the whole exercise — that Luxembourg shed the bulk of a steel industry without a single forced redundancy — is broadly borne out, and it is the reason the tripartite is treated here as a national institution rather than a committee.
What was waiting, and what it cost
It also has to be said that Luxembourg had somewhere to put the people, and that this was not luck either. The country had spent the post-war decades building a second economy on tax and legal design: a holding-company regime dating to 1929, banking secrecy, and in July 1963 the listing of the Autostrade bond on the Luxembourg Stock Exchange, generally counted as the first eurobond and the beginning of a market that made a small country the clearing point for cross-border capital. When the mills contracted, the funds industry was already growing, and it kept growing until Luxembourg became the second-largest investment fund domicile in the world after the United States. A steelworker's son did not become a fund administrator overnight, but the jobs existed in the same country in the same decade, which is more than the Ruhr or the Sambre valley could say.
The costs were real and they were paid in ways that are easy to miss. Public debt and public expenditure absorbed the transition directly. A generation of men in their fifties left the labour market a decade early, which is an expensive thing for a pension system to do and a strange thing to do to people who wanted to work. And the demand for labour, once the economy turned to finance and administration, was met from outside: around 230,000 people now cross into Luxembourg every working day from France, Belgium and Germany, close to half of everyone employed in the country. They pay tax here and consume public services where they sleep, which is the standing argument in every border commune from Longwy to Trier.
What is left of it
Steel did not disappear. ARBED merged with Aceralia and Usinor in 2002 to form Arcelor, which merged with Mittal in 2006 to form ArcelorMittal, whose registered headquarters is still an office building in Luxembourg City — the company left ARBED's old headquarters on the avenue de la Liberté a few years ago, but not the country — so Luxembourg ended up holding the paperwork of the world's largest steel producer while making very little steel itself. What it does make is scrap-fed and electric: the arc furnaces at Belval and Differdange, running on recycled metal, with the Esch-Schifflange furnace stopped in 2012 and never restarted. The old workings, meanwhile, grew back into something the UNESCO Man and the Biosphere programme designated a biosphere reserve in 2020, and Esch-sur-Alzette was European Capital of Culture in 2022. And the committee is still sitting: it was convened again in 2022 over energy prices and the automatic wage indexation that is the permanent subject of Luxembourgish industrial relations, and it produced, as it usually does, a package that nobody in the room described as a victory. That is the point of the thing. The tripartite does not deliver good outcomes so much as agreed ones, slowly, with everyone implicated. Standing on the top platform of furnace A, looking down at a university built inside a dead ironworks, it is tempting to read the view as a happy ending. It is better read as a bill that was paid in instalments, by a country small enough to keep everybody at the table until it was.