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Luxembourgeois. No other population is so completely encapsulated in the imagination, in both national and social status, as that of this tiny country. That is why it is such a surprise to be taken round the venues for the country’s big arts events celebrating its status as European capital of culture.

We are taken into overwhelming, dark, abandoned steelworks, into the brick pantheons of railway roundhouses and around awesome landscapes inhabited by the charred husks of now-migrated industry.

This is a series of events planned around a pivotal moment in which the future of this architecture from another era, another world, is being decided. You sense that the Luxembourgeois are well aware of their cultural status in the bigger European picture. There is, of course, a huge new concert hall, the obligatory eye-wateringly expensive art mall, and nips and tucks for all the country’s existing arts buildings. But the interest here lies in a serious question, what do we do with all this stuff?

It is a measure of the generosity and awareness of the organisers (awareness, perhaps, that their most visited national attraction is currently a motorway service station) that they are attempting to spread the cultural regeneration into the neighbouring industrial landscapes of France, Belgium and Germany. This is the heart of the original European project, which grew out of the steel and coal traded between these nations and beyond, and the programme can be seen as an affirmation of that idea of the heartland.

But its heart is, unfortunately, entirely heartless. EU-ville is an almost caricatured paradigm of faceless bureaucracy. Worse than anything conceived by Jacques Tati in his brilliant filmic satire of the modern metropolis, Playtime, it is an area separated from the city by a ravine, void of urban life or activity, of retailing or dwelling: the exemplar of the zoned city, modernism’s most disastrous big idea.

The weird anonymity of that failed utopian setting turns out to be the perfect foil for the two new buildings that form the centrepiece of a new cultural core. The first is the Museum of Modern Art (Mudam) designed by Ioh Ming Pei, the US-Chinese architect of the Louvre Pyramid. Emerging from the foundations of the fortifications that previously occupied the site, this, we can immediately tell, is meant to be permanent architecture. It is solid, bourgeois stuff, the equivalent of the grand classical monuments of the 19th century that attempted to embody nationhood as much as the enriching experience of art. And it achieves a dullness as complete as the dullest of provincial museums.

The building is beautifully detailed, generous, spacious, built of rich stone and steel, yet it has nothing to say. The past 40, perhaps even the past 140 years seem to have counted for nothing in a building that would look at home in 1970s Denver or 1980s Dubai. I can think of no better argument against employing an international superstar than this slab of stony boredom. The galleries, at least, are OK but they occupy such a small part of the overall structure that they serve merely to exemplify the institution’s problem, namely, how much contemporary Luxembourgeois art is there? The Michel Majerus exhibition, on at the moment, is not bad but you get the impression that that is the one blockbuster.

However, the brighter aspects are supplied by individual designers who have worked within Pei’s framework to create points of interest, particularly the Burroullec brothers’ shop, one of the very best I’ve seen – local, quirky and intelligent in all the ways the museum isn’t – Konstantin Grcic’s platforms and Martin Szekely’s unusual audio-seating.

Next door is Christian de Portzamparc’s Philharmonie. Ironically, this building, which tries far less hard to fit in, sits far more comfortably on its site. Its futuristic curves are as sculptural and optimistic as anything in Brasilia and feel just about right. The building is framed by a series of columns as dense and as slender as the strings on a harp: it looks as if it could be strummed. Apparently the columns had to be tripled up in order to support a heavier roof than originally planned, designed in response to the proximity of the airport and the disruption of low-flying aircraft. The three rows of columns wrap round a slightly irregular structure roughly in the plan form of an eye, with the auditorium at its centre. To its side is an ill-fitting little growth in vaguely shell-shaped form that encases a wonderfully theatrical chamber music hall. Its complex and intriguing roof form echoes the repetition of the façade columns. The auditorium itself (the ubiquitous but successful shoebox) appears as a kind of mini-city, boxes as buildings and windows overlooking the stage, its enveloping timber warmth a delightful contrast to the Eurocratic exterior. A kind of mini concrete flyover wraps the foyer spaces, taking people around the interior in a dramatic curving arc – it seems an ironic comment on the bigger, duller city outside.

But the real surprises are those hulking industrial structures on the other edge of the city. Two roundhouses or rotondes (built as railway engine turning sheds in the 19th century, one was still operating as a bus repair workshop two months ago) have been converted into huge arts spaces. London’s similar, bigger project has shown how successful these spaces can be and it is the second rotonde, left more as a found space, rough and raw, that impresses the most. Into it timber posts and beams have been cleverly inserted, subtly shifted to produce a rhythmic structural effect that forms a bar area while maintaining visual contact with the huge space beyond. These are stunning rooms, as well suited to raves as to performance or art, and their situation in the hinterlands of the city’s station seems to have protected them from the cosiness of the rest of the centre.

But they are nothing compared to the monstrous steelworks at d’Esch-Belval. A corner of the site still operates, now under the aegis of Mittal, but by far the biggest part is a haunting monument to another era. The wind whistles through the vents surrounding the old blast furnaces, while the police use the Brobdingnagian turbine hall (far bigger than London’s Tate Modern’s) as a car pound. There is still uncertainty as to what will happen to these spaces, which date from the region’s industrial zenith just before the first world war, but for now the young Swiss architects Holzer/Kobler will insert a temporary structure to house an exhibition on “human needs” and housing for the national archive.

Stretching as far as Metz (where it covers the building of the first off-site Pompidou Centre) and Germany’s abandoned but awe-inspiring Reden mine, this is a hugely ambitious cultural programme but it is hard to get a feel for the place. The measure of its success will be whether Luxembourg’s status as cultural capital can somehow knit together these different strands.

It may be a tiny country, but the steelworks seem as far from the twee city centre and the bureaucratic heaven of its Euroville as Newcastle from Naples. Jona Friedman, the influential Hungarian/French urban theorist, proposed in the early 1960s that northern Europe would become in effect one extended city, contained roughly within a triangle drawn between Oxford, Hamburg and Paris.

Luxembourg is on the southern edge of that future vision of a European megalopolis and seems to be working to extend further into and beyond it through this cultural project. It is long-term, intelligent, occasionally pompous but mostly good. Liverpool, which takes over in 2008 and has so far been cagey about most of its plans, could learn much.

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