In the medieval era, Luxembourg was one of many small principalities in Western Europe. For centuries, it successfully fended off efforts by its larger neighbors to absorb it. It succumbed to invasion by Nazi armies in 1940, regaining its independence in 1944, after heavy fighting between U.S. and German forces. Many American war dead, including General George S. Patton, are buried in U.S. military cemeteries in the country. Constraints of size and location have been factors in the many cooperative agreements in which Luxembourg participates, and the country has cooperated in post-World War II moves toward European integration. A customs union was established with Belgium in 1921, which was interrupted only during the German occupation of 1940–44. Luxembourg was a founding member of North Atlantic Treaty Organization (NATO) in 1949, and was an original member of the European Coal and Steel Community (forerunner to the European Community, now the EU). The Benelux Economic Union was negotiated in 1948, became effective in 1960, and in 1970, established Belgium, the Netherlands and Luxembourg as a single customs union. Membership in such institutions reflects an impulse to mesh the country's future with that of other Western democratic governments.
Luxembourg has been governed by coalitions since the 1920s, with the exception of Nazi rule during the war. Luxembourg's small size allows citizens to be familiar with the social, economic and political currents of each section of the country. In such circumstances, consensus building is both important and possible, and coalition governments generally reflect an effort to forge consensus. Since World War II, the Parti Chretien Social (PCS or Christian Socialist Party), a centrist party, has led all coalitions except one. For a brief period (1974–79), the Parti Ouvrier Socialiste Luxembourgeois (POSL or Luxembourg Socialist Workers Party) led a coalition with the Parti Democratique (PD or Liberals) as their junior partners. For fifteen years (1984–99), the PCS had been the senior partner in coalition with the POSL. Jacques Santer was the leader of this coalition until January 1995, when he became president of the European Commission, the key administrative body of the EU. In the 1999 elections, the PCS formed a coalition with the PD to form a government.
Luxembourg is a hereditary constitutional monarch. Grand Duke Henri became the head of state in 2000 as his father Grand Duke Jean, who came to the throne in 1964, abdicated at the age of 79. Though Grand Duke Henri vowed to take a more active role in state affairs than his father had, his official duties are primarily ceremonial. The unicameral legislature, the 60-member Chamber of Deputies, which is elected every five years, is the true instrument that gives legitimacy to any government. The voting age is 18, and all voters are required by law to vote. Executive power is vested in the Grand Duke but is generally exercised by the Council of Ministers, under the leadership of the president of the government, also known as the prime minister.