The crisis was triggered immediately following the departure of the Germans. In Parliament, the representatives of the Left demanded the removal of the dynasty. They reproached the sovereign her relations with the occupier during the war and her for having intervened in political life in favour of the political Right. The motion was only just rejected.
On an international level, the Luxembourg government also had to face criticism with regard to Grand Duchess Marie-Adélaïde. France and Belgium were carrying out secret negotiations, which risked having repercussions on the independence of Luxembourg. On 9 January 1919, the volunteer corps (Luxembourg army) revolted and a committee of public safety declared Luxembourg a republic. These movements did not garner public support and were swiftly stifled by the intervention of French troops. But the position of Grand Duchess Marie-Adélaïde was definitely compromised. The sovereign decided to abdicate in favour of her younger sister Charlotte, who succeeded her without delay (15 January 1919).
To defuse the crisis, the Luxembourg government decided to organise a double referendum. The public was to be consulted on the form of the state (monarchy or republic) and the economic orientation of the country following the unraveling of the Zollverein. On the one hand, the voice of the population was intended to make an impression at the very moment the victors were gathered in Versailles to redraw the European map according to the Wilson principle of the right of nations to self-determination. On the other hand, the referendum was supposed to reinforce the legitimacy of the new grand duchess. Voting for the first time under universal suffrage, on September 28 1919 a large majority pronounced itself in favour of keeping the monarchy (80%) and for an economic union with France (73%). France, however, withdrew and advised the Luxembourg government to turn towards Belgium. Following harsh negotiations, the agreement establishing the Belgo-Luxembourg Economic Union (UEBL) was signed in 1921.
(Source: About... History of Luxembourg)