The city of Luxembourg , also known as Luxembourg City is a commune with city status, and the capital of the Grand Duchy of Luxembourg. It is located at the confluence of the Alzette and PÃ©trusse Rivers in southern Luxembourg. The city contains the historic Luxembourg Castle, established by the Franks in the Early Middle Ages, around which a settlement developed. Luxembourg City lies at the heart of Western Europe, situated 213 km (132 mi) by road from Brussels, 372 km (231 mi) from Paris, 209 km (130 mi) from Cologne, and 65 km (40 mi) from Metz in northeast France. In 2009, Luxembourg was ranked as having the third highest GDP - per capita at $79,600 (US Dollars) with the city having developed into a banking and administrative centre. It is a seat of several institutions of the European Union, including the European Court of Justice, the European Court of Auditors, and the European Investment Bank.