However, such an interest was not reciprocal and Luxembourg finally turned to Belgium, which led to the establishment of the Belgo-Luxembourg Economic Union. The economic union, mainly based on a customs union, became effective in 1922. It included elements of monetary cooperation, which led to the establishment of a monetary association between Belgium and Luxembourg in 1935. The monetary association was highly asymmetric.
Luxembourg was not granted a central bank and was not directly involved in monetary policy decisions. In a nutshell, it had no monetary sovereignty. 1  Carlo Hemmer. BIS central bankers’ speeches  3  With the introduction of the euro, the monetary association was dissolved.