Yesterday the people of Luxembourg marked a great day in the life of their nation, the 20th anniversary of the ascension to the throne of His Royal Highness Grand Duke Jean. Your Highness, on behalf of all Americans, permit me to give you and your people our heartfelt congratulations.

It's a deep honor to welcome you to the White House as you begin your visit to our country. Permit me to add that when you reach California, Nancy and I would like you to give that great State our love. [Laughter] You see, as the result of a certain political exercise that concluded a week ago, it looks as though we won't be living back there for -- oh, maybe not till 1989. [Laughter]

Luxembourg possesses a thousand years and more of national history. It's a beautiful and a varied land, ranging from the forests and hills of the north to the fertile plains of the south. It's a prosperous country with a mighty steel industry and dozens of new industries and services gathering strength. And it's a nation of self-confidence and charm, with a gracious way of life based on an abiding love of family and freedom. Luxembourg is a proud and alluring country.

Yet Luxembourg acquires still greater strength and vitality as an active member of the family of nations. It was a founder of both the North Atlantic Treaty Organization and the European Community. In your free and fair world trade, Luxembourg has set an example for all nations to follow and shown the world that prosperity comes not with less but with more international trade.

Individual Luxembourgers have rendered outstanding diplomatic services. Robert Schuman, one of the leading advocates of a united Europe, was a native of your country. Joseph Bech was instrumental in bringing the European coal and steel community to Luxembourg in 1951. And men like Gaston Thorn and Pierre Werner have played memorable roles in world diplomacy.

Over the years, relations between Luxembourg and the United States have been those of close and abiding friends. We view with the deepest respect your contributions to NATO, including the registration of AWAC's aircraft and your splendid efforts during the Enforcer exercises. And we look forward to consulting closely with your government when Luxembourg assumes the Presidency of the Council of the European Community during the latter half of next year.

Your Highness, we in the United States are convinced that the Western world faces a future of strength and prosperity. In recent years, the Western allies have stood together against the bluff and bluster of our adversaries and become more firmly united than ever. And although all of us have passed through difficult periods of economic adjustment, many of our basic industries are becoming more efficient, and breakthroughs in high technology and other new fields are leading our nations into a time of sustained growth. For Luxembourg, America, and so many other free nations, today our future promises not stagnation and decline, but opportunity and hope.

And tonight, as we look to the future, it's fitting to remain mindful of our past. Forty years ago, Your Highness, Americans and Luxembourgers fought side by side to liberate your nation. Throughout America today, there are thousands of men who can still recall the tear-streaked faces of your people when they realized that at long last they were free.

To me, the most memorable story is about a strapping young American named George Mergenthaler. For several weeks, George was stationed in the village of Eschweiler, in World War II. He had a winning personality, and before long, the good people of Eschweiler took him into their homes and hearts. They told him what life in the village had been like before the war and then during the Nazi occupation. And George, in turn, opened his heart. He told the people that he was an only son, told them all his hopes for when the war was over. And in those few weeks, a deep bond formed between the people of that ancient village and the amiable young Yankee.

Some time afterward, the people of Eschweiler learned that George had taken part in a fierce battle on the plains between Luxembourg and Belgium. It was called the Battle of the Bulge. And it cost George his life.

Today, 40 years later, there is still a plaque honoring George Mergenthaler in the Eschweiler village church. It reads simply: ``This only son died that others' sons might live in love and peace.''

Well, Your Highness, today our sons and daughters know that peace. And the bond between our nations is truly a bond of love.

Now, ladies and gentlemen, if you would please join me in a toast to their Royal Highnesses, the Grand Duke and Duchess of Luxembourg, our friends.

The Grand Duke. Mr. President, Mrs. Reagan, the Grand Duchess and I would like to express our sincere gratitude for your invitation, your gracious hospitality, and your kind words regarding our country. May we express our great pleasure at this opportunity as the first head of state to congratulate you personally on the overwhelming result of your reelection to a second term as President of the United States. As a matter of fact, Mr. President, we had never any doubt about the outcome. [Laughter]

We are confident that this great nation, under your able leadership, will continue to give the necessary guidance to all the countries of the free world and encourage democracies in their endeavor to promote freedom.

There are no problems which separate the United States and Luxembourg. How could it be otherwise, when America, on two occasions, played a paramount role in the liberation of my country?

In 1918, as well as in 1944, young Americans gave their lives in order to free the Grand Duchy from foreign oppression. These sacrifices I recall at a particularly appropriate time: This year, 1984, marks the 40th anniversary of the liberation of occupied Europe, including Luxembourg, and the final victory of the Battle of the Ardennes.

The people of Luxembourg will never forget the generous help of their American friends, which twice preserved our freedom and our independence. Corresponding to our national motto, we wish to remain what we are. This is the reason why, after leaving Washington, I will visit Colorado Springs in order to pay tribute to the American Army and Air Force.

Mr. President, we all know relations between our two countries are excellent. I am convinced that we could improve them even more. As mutual understanding, upon which friendship is based, exists between us, there should be no difficulty to proceed successfully in this way.

Back home, my countrymen follow with interest and pride this visit of their head of state. They know it is a token of sympathy of a great nation to the Grand Duchy of Luxembourg.

I beg you to accept, Mr. President, along with all my thanks, my countrymen's best wishes of happiness and prosperity for your nation and yourself.

May I add a special thanks to you, Mr. President, for having mentioned my 20th anniversary which took place yesterday on the 12th of November when I took over from my dear mother. It was really awfully kind of you to mention it this evening. Thank you again.

May I ask you now to rise for a toast to the President of the United States of America, to the well-being and the prosperity of the American people, and to the friendship between Luxembourg and the United States.

Note: The President spoke at 9:49 p.m. in the State Dining Room at the White House.