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As a result of the German loss in the Great War Alsace-Lorraine was given back to France in 1918. The French government introduced a rigorous assimilation policy to wipe out German culture completely. German-speaking people in the former Empire territory had no choice but to accept it as they couldn't expect help from defeated and isolationist Germany.
General strike in Straßburg and consequences
On December 1, 1927 the French government passed a new law which prohibited speaking German in business and work. Outraged of the radical measure, the German speaking workers of the Straßburg power station, formerly owned by German electricity company AEG, declared to lay down their work. The message quickly spread to the whole city and three days later all German enterprises in Straßburg were on strike. Demonstrations were crushed violently by French police and army with over 200 German speaking workers killed and nearly 1000 wounded. This incident was condemned internationally and forced the League of Nations to intervene.
The Great Compromise
The League of Nations invited local governors of Alsace-Lorraine as well as deputies from Paris and Berlin to a conference in London to solve the conflict. Germany, lodging a protest and so ending a period of isolation, stated that the area could not be governed peaceful only under French control and claims participation in local government which was declined promptly by France. Discussing the problem for over four weeks without a consent, Secretary-General Sir James Eric Drummond brought in a new idea. He proposed to form a new state on the territory of Alsace-Lorraine which should be ruled by Germans and Frenchmen equally. This radical idea was declined by France as it was not willing to give up their territory until Great Britain promised to give their ally colonies in Africa in change to save peace.
However, the League of Nations did not believe that Alsatians could manage the form of a state on their own without being influenced too much by one of the rivals. Luxembourg, which has unified both German and French culture successfully, was offered patronage of the new country. Grand Duchess Charlotte, firstly skeptical on this proposal, agreed after she saw great acceptance in her people but only under the condition that the territory was ceded completely to her state. Negotiations between Luxembourg's government and the Alsatians were concluded soon and on March 13, 1928 the formation of the new state called Alsace-Luxembourg was announced. The capital would stay in Luxembourg while the Supreme Court of Justice would be moved to Straßburg.
Alsace-Luxembourg's role in Europe
Situated between the old rivals Germany and France, Alsace-Luxemburg fulfills the role of a "buffer state" and acts as a negotiator.