Luxembourg becomes the like a second Switzerland after the Franco-Prussian War?

Instead of Germany annexing Alsace-Lorraine they give it to Luxembourg to create a neutral nation between the two. I think Britain and Bismarck could work out agreement to have all powers respect the neutrality and sovereignty of the expanded Luxembourg. The nation would respect both German and French people there. Also Luxembourg has to officially cut ties to the Netherlands but they stay friendly with them. The head of state being loyal to the Dutch monarch might bring up questions about neutrality at some point. So best bet is end that and make the head of state a official king/independent and maybe even give the nation a new name? Luxembourg is currently a major banking center in Europe. Could something like that still happen but a bigger scale? They are almost literally a second Switzerland in many ways but also shares similarities to Belgium somewhat too. How would politics be there? Also how does this effect the rest of Europe? Could the region actually be more populated and wealthy then otl? Could it be economic hub? How would countries react to this and is it practical?
 
No way is Luxembourg going to be given Elass-Lothringren in how Bismarck originally drew his annexation. I have seen some alternative annexations of this territory. For Luxembourg to just be included the Germans would have to draw the territory along the bottom of Luxembourg and Belgium border with France. Germany would then have two borders with Belgium. Anyhow this was the original Luxembourg before France, Prussia and Belgium acquired pieces of it. I could never actually see Luxembourg be given all of it because Baden and Bavaria would have wanted some.

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