There was a strong resistance movement supported vocally from exile by the royal family, led by Grand Duchess Charlotte, whose bronze statue now stands near the palace."In those days the Luxemburgers did not decide on their own future," says Mr Conter. "Which is why we have the constant feeling we need to prove ourselves as a nation. Out of this time also grew the conviction that we could only survive in times of peace, and that we should therefore invest ourselves in building a peaceful Europe."As a result, Luxemburg was a founder member of the United Nations, Nato and the European Coal and Steel Community, the forerunner of the European Union. The nation has no sporting heroes - it has only ever won one gold medal at the Olympics, in 1952 - and has never produced a decent actor or pop star Its heroes are the royal family, or eurocrats.

Pierre Werner, the prime minister from 1959, drew up a blueprint for monetary union; his eventual successor, Gaston Thorn, was also president of the European Commission, for four years from 1981."Many people would say the Grand Duchy's greatest influence on Europe has been as a model of openness in terms of economic freedom and as a relaxed melting pot of different cultures," says the Golden Book of Luxembourg, read by many of the 2.5 million tourists and businessmen who visit every year.Luxemburg responded to the steel crisis of the 1970s by becoming a tax haven, which brought an astonishing rise in prosperity. The results can be seen in the immaculately preserved historic buildings, and the stunning, high-tech museums. The country has managed to integrate a large number of Portuguese immigrants, who now make up more than 30 per cent of the population. It has three official languages: French, German and Luxemburgish, which has become the favoured tongue among the young. Most people also speak English.Like its neighbour Belgium, Luxemburg produces fine chocolate, beer and Moselle wines. But many who visit do so because it is home to major departments of the EU.

The European Investment Bank and the Court of Justice are among several huge glass and steel constructions in a sprawling estate on the edge of the city. Compared to the humble and elegant government offices, these new developments seem arrogant - the very accusation levelled at Jacques Santer and his commissioners."Perhaps we should not be surprised," says Simon Gray, editor of the magazine Luxembourg Business. While Mr Santer has not been accused of personal wrongdoing, "the idea that the commissioners should be accountable for the money spent - or wasted, or stolen - under their supervision still seems unfathomable to him".During his 11 years as prime minister of Luxemburg, he presided over splendid economic growth, though Mr Gray alleges he turned a blind eye to cronyism. "No one would say it was a corrupt country but he presided over the kind of morally dubious behaviour now condemned as unacceptable in Brussels."Still, the mood in the bars on Friday night suggested that life would go on.