The bizarre case of Luxembourg adds a grotesque note to the NATO rearmament drive. As reported, Prime Minister Luc Frieden (an Orwellian name) is the co-initiator, together with Canadian PM and former Bank of England boss Mark Carney, of the so-called Bank for Defense, Security, and Resilience (i.e., the NATO Bank).
Luxembourg is a tiny grand duchy, its monarch belonging to the Nassau-Orange aristocratic family (descendants of William of Orange). With approximately 680,000 inhabitants, it has an “army” the size of a battalion. No air force, no navy, no tanks, two drones.
However, it has a banking sector with assets equivalent to roughly 12 times its GDP. Its investment fund industry manages approximately €7.6 trillion in assets, around 77× the country’s GDP, making it the second-largest investment fund domicile globally after the United States. To characterize it as an Epstein-class tax haven is no hyperbole.
This shows that it is all about money.
Yuriko Backes is minister for Defense, Gender Equality and Diversity. She has also been Hofmarshall of the Grand Duke (the monarch’s housekeeper).
At the recent NATO summit, she and the PM announced that the NATO Bank will have two seats, one in Canada and the other one in Luxembourg. Backes is known for her hawkish positions in support of Ukraine and a supporter of rearmament. “If you want peace, you must prepare for war,” she roared in a 2025 interview.
