The best of... Luxembourg City

With all that Euro-money sloshing around, you would expect the arrivals gate at Luxembourg's Findel airport to open on to a scene of men in Gucci suits and women click-clacking across the concourse in Manolo Blahniks.

With all that Euro-money sloshing around, you would expect the arrivals gate at Luxembourg's Findel airport to open on to a scene of men in Gucci suits and women click-clacking across the concourse in Manolo Blahniks.

The reality is somewhat dowdier, with anoraks, shell suits and trainers the preferred mode of dress. Perhaps the Eurocrats had already departed to their respective nation states for the weekend when I arrived on a wet Saturday morning in spring. After all, who would opt for a weekend break to a Euro-hub?

Yet the advantageous location of the tiny Grand Duchy has drawn the attention of successive powers across the centuries - Burgundy, the Habsburgs, France, Spain, the Netherlands, Austria, Prussia and Germany have all played a role - creating a cultural legacy that begs to be experienced.

And just like its history, the physical setting of the capital, Luxembourg City, is disproportionately dramatic. Few other places can claim the panoramic views of this double-decker conurbation, which sprawls out from its original fortification on the rocky outcrop known as the Bock, overlooking the rivers Alzette and Pétrusse, across the plateau and down on to the valley floor.

Best hotel

No competition: the Hotel Albert Premier, 2a rue Albert Premier (00 352 442 442; www.albert1er.lu). Its 14 rooms are exquisitely decorated with florals, plaids and checks, often mixing all styles in one space. Does that sound hideously chintzy? It should do. Yet the overall effect - aided by antiques and paintings - is surprisingly tasteful and luxuriously cosy. At the weekend, rooms cost from €145 (£98) to €255 (£173) per night, based on two sharing, including breakfast. Or book online only for a Gourmet Break offer until 24 April from €124 (£84) per person per night, based on two sharing, including one night's b&b with à la carte dinner for two at Lagura (excluding drinks).

For tighter budgets, the Casanova at 10 place Guillaume (00 352 22 04 93; www.hotelcasanova.lu) has 17 simply furnished rooms in the centre. B&B from €110 (£75) per room per night, based on two sharing.

Best restaurant

Luxembourg City may be small, but it can lay claim to four restaurants with Michelin stars. Mosconi, an elegant French-Italian restaurant in the lower town at 13 rue Munster (00 352 546 994), has one of these accolades. Book ahead for a table in this pretty villa in the Grund (meaning "the bottom") by the Alzette. Three courses without wine costs €34 (£23).

For lunch, try the hippie-chic gourmet restaurant and café Chiggeri at 15 rue du Nord (00 352 22 82 36; www.chiggeri.lu), which serves big, tasty salads for about €13 (£9). It's a good nightspot, too.

At teatime, enjoy the fêted chocolates and cakes of Oberweis at 19 Grand' Rue (00 352 47 07 03; www.oberweis.lu).

And if you have the stomach for an authentic, meaty, Luxembourgish experience, run up an appetite and dine at Um Dierfgen at 6 côte d'Eich (00 352 22 61 41). A three-course set meal without wine costs from €10 (£6.80) per head.

Best cultural attraction

The subterranean art gallery Am Tunnel runs for 380m beneath the National Savings Bank at 16 rue Zithe (00 352 40 15 24 50) and must rank as one of the world's most original creative spaces. From 23 March to 13 June, it will show the work of 20th-century German artists and the photographer Edward Steichen. Open Monday-Friday, 9am-5pm, closed Saturday, open Sunday 2pm-6pm. Entrance free. On 27 and 28 March, there will be free admission to all museums in the city and, from 10 April to 31 October, a LuxembourgCard will be available, giving free entrance to many attractions across the country and free public transport. Go to www.luxembourgcard.lu.

Best shopping

Moselle wine is the obvious choice. However, unless you are going to make an excursion to one of the nearby vineyards, you will have to pick up some from a supermarket because there are no fancy wine merchants to peruse. Take home some chocs from Oberweis, too.

Best sightseeing

Take a tour of Luxembourg's past. Visit the remains of the fort on the Bock, dating from 963 and now a Unesco world heritage site. Then make your way through the Casements, a labyrinth of tunnels and caves built into the rock, which once housed an army of thousands (some cannons are still in situ) but now echoes to sharp intakes of breath from tourists marvelling at the views across the valley and of the now gentrified Grund district (the former slums) below. Open daily, 10am-5pm until 31 October, admission €1.75 (£1.18).

Best nightspot

The new kid on the block is Apoteca at 12 rue de la Boucherie. The trendiest bars can be found around rue Hollerich - try the Cat Club at 18 rue de l'Aciérie and Marx at 42-44 rue Hollerich.

Best way to get there

Luxair (0800-389 9443; www.luxair.lu), in association with VLM, flies from Heathrow, London City and Manchester from £133 return in March. British Airways (0870-850 9850; www.ba.com) flies from Gatwick for £119 return in March. The airport is four miles from the city and the No 9 bus runs to the centre for €1.20 (80p). By taxi it costs €25 (£17). The city is compact though steep in parts and easy to explore by foot. A lift descends from the car park at the Plateau du Saint-Esprit to the Grund 6.30am-4am (2am on Sundays). For further details contact the Luxembourg National Tourist Office (00 352 42 82 82 20; www.ont.lu).

The writer travelled as a guest of the Luxembourg National Tourist Office and VLM Airlines.