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Amsterdam, capital of the Netherlands, lies on the banks of two bodies of water, the IJ bay and the Amstel river. Founded in the late 12th century as a small fishing village on the banks of the Amstel, it is now the largest city in the country and is a financial and cultural centre. Amsterdam is also one of the core urban centres of the greater metropolitan area called 'Randstad' (Ring City) which encompasses other Dutch cities such as Haarlem, Utrecht, Leiden, The Hague and Rotterdam and has a population of over 7.5 million.

Amsterdam has one of the largest historic city centres in Europe, dating largely from the 17th century. At this time, a series of concentric, semi-circular canals ('grachten') were dug around the old city centre. Along the canals houses and warehouses were built. The canals still define Amsterdam's layout and appearance today. Many fine houses and mansions are situated along the canals. Some of the narrow brick houses are gradually sinking because they are built on wooden piles to cope with the marshy subsoil.

Although Amsterdam is officially designated as the capital of the Netherlands, it has never been (save a brief period between 1808 and 1810) the seat of the court, government, or parliament of the Netherlands, which are all located at The Hague. Amsterdam is also not the capital of the province in which it is located, North Holland, whose capital is located at Haarlem. Amsterdam is famous for its free-spirited liberalism, diversity and tolerance.

Amsterdam enjoys a moderate temperate climate, with the weather patterns being strongly influenced by Amsterdam's proximity to the Atlantic Ocean to the west and the prevailing westerly winds. Winters are mild and average above freezing, although frosts are not uncommon during periods of easterly or north easterly winds that blow from the interior of the continent. Summers are warm but seldom hot. Although days with measurable precipitation are common, Amsterdam averages less than 760 mm of precipitation annually. Most of the rain falls as protracted drizzle or light rain. Cloudy and damp days are common, particularly in the cooler months.

Public transport in Amsterdam, operated by Gemeentelijk Vervoerbedrijf, Connexxion, Arriva, and Nederlandse Spoorwegen, consists of: national and international train connections, three metro lines, one light rail line and one more metro line under construction, together the Amsterdam metro, 16 tram lines, an express tram line (IJtram), 55 local bus lines, regional bus lines, several ferries for pedestrians and cyclists across the IJ (free of charge), a Fast Flying Ferry towards Velsen-Zuid on the North Sea shore and local night bus lines. A new underground line, the north/south line (Noord/Zuidlijn) is under construction. The estimated completion date is in 2012 lines. Amsterdam is known as one of the most bicycle-friendly cities in the world and is a centre of bicycle culture. Most main streets have bike paths. Bike racks are ubiquitous throughout the city. There are about 700,000 bicycles in the city. Each year, about 80,000 of them are stolen and 25,000 end up in the canals. In the city centre, driving a car is discouraged, parking fees are steep and a great number of streets are closed off for cars. Amsterdam Schiphol Airport, is less than 20 minutes by train from Amsterdam central station. It is the biggest airport in the Netherlands, the fourth largest in Europe and the tenth largest in the world. It is home base to KLM, since 2004 part of Air France-KLM.

Amsterdam is noted for many outstanding museums, including the Rijksmuseum, the Stedelijk museum, Rembrandt House Museum, and its world-class symphony orchestra, the Concertgebouworkest, whose home base is the Concertgebouw. The Van Gogh Museum houses the largest collection of Van Gogh's paintings and drawings in the world. Anne Frank House is also a popular tourist attraction. Amsterdam is also famous for its red-light district, de Wallen. Prostitution is legal in the Netherlands at specific places. The red-light district is located in the center of the city along major canals and is clearly marked on maps. Centered around the Wallen, but also elsewhere in the city, coffee shops sell cannabis. This is not completely legal but is tolerated when small quantities of cannabis (up to 5 grammes) are involved.

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