At first glance, when you read that the longest ruling leader of Europe stepped down last week over a “spy scandal” chances are you may have been forced to wipe off your computer screen or newspaper of the coffee that just went flying out of your mouth in a spit-take that would have done Soupy Sales proud. But when you take a moment to remind yourself that the little European nation borders France, Germany, Belgium, and that presumably they would be forced to have a large group of well-trained spies in order to keep an eye and ear on the Hapsburgs, Bourbons, Prussians, Hohenzollerns, and of course Napoleon and the pesky French, it all makes sense.

Luxembourg

Well, at least it would make sense if last week’s events occurred sometime between the 15th and 19th centuries. It didn’t. Former Eurogroup chief and the EU’s longest-serving Prime Minister, Jean-Claude Juncker, stepped down on July 10th following allegations of running an inept spy-ring that was illegally tapping phones, taking money from business interests to make introductions, and speculating on used, albeit, very expensive cars.

Luxembourg SS:  Inept and Bumbling

Robert Ludlum was one of the fathers of the modern spy novel genre, and the characters that sprang to mind when I first read this news were the recurring, bumbling, yet lovable characters from his book “The Road to Gandolfo,” and its sequel “The Road to Omaha.”

When this story broke, Twitter, through its millions of users, was responsible for a number of tweets that asked something approximating, “What the hell does Luxembourg need spies for anyways?” The answer is actually quite simple when you take a look. Since January 1 of this year, Luxembourg is a member of the United Nations Security Council. Certainly, that warrants a security service and Luxembourg has its own clumsy and dysfunctional Luxembourg Secret Service, known as SREL.

Luxembourg Sells Most Alcohol in Europe Per Capita

Working down that list of reasoning. Luxembourg boasts the highest GDP per capita in the world at $107,206 (2012). So certainly someone is worth spying on there.

In April 2009, concern about Luxembourg’s banking secrecy laws, as well as its reputation as a tax haven, led to its being added to a “grey list” of nations with questionable banking arrangements by the G20. In response, the country soon after adopted OECD standards on exchange of information and was subsequently added into the category of jurisdictions that have substantially implemented the internationally agreed tax.

In March 2010, the Sunday Telegraph reported that most of Kim Jong-Il’s $4 billion in secret accounts is in Luxembourg banks. Now we’re talking.

How did these spies get caught by an investigative reporter for a newspaper with a circulation of 15,000 copies? Maybe it’s because Luxembourg sells the most alcohol in Europe per capita.