Luxembourg's PM, Finance Minister Address COVID-19, Sustainable Transition at OECD Meeting

On 31 May and 1 June 2021, Luxembourg's Prime Minister Xavier Bettel and the Minister of Finance Pierre Gramegna participated in the 2021 Meeting of the OECD Council at Ministerial Level (MCM) in Paris, chaired by the United States with Luxembourg and South Korea as Vice-Chairs.

Centred around the theme "Shared Values: Building a Green and Inclusive Future", theministerial meeting focused on several priorities: the end of the COVID-19 crisis, a sustainable and inclusive transition and the transfer of powers between outgoing OECD Secretary-General Angel Gurría and his successor Mathias Cormann. 

Transfer of powers between Angel Gurría and Mathias Cormann

In his speech, Luxembourg's Prime Minister thanked the outgoing Secretary-General for the work he carried out over the past fifteen years: “Fifteen years during which he breathed new life into the OECD. The slogan 'Better policies for better lives' has become a real raison d'être of the organisation, which today enjoys an international credibility that no longer needs to be done. I thank Angel Gurría for his dedication and investment aimed at always putting people at the centre of our thinking. It will leave an indelible mark on our organisation”.

Finance Miniser Pierre Gramegna added: “I would like to thank Angel Gurría for his exceptional commitment within our organisation. [...] I would especially like to highlight two areas in which significant progress has been made under your [Angel Gurría's] vigorous leadership. First, your contribution to the enlargement process has been crucial in the sense that it has made it possible to strengthen the OECD on a lasting basis. Second, and this is probably your greatest achievement, the OECD has succeeded under your impetus in modernising international taxation, while ensuring a level playing field for all economies”.

Prime Minister Xavier Bettel was optimistic about the future of the OECD: “Angel Gurría, together with the excellent staff at the OECD, paved the way for the OECD to remain relevant and to continue its mission to provide our governments with valuable data, analysis and advice, whether in the areas of climate change, digital transformation, or international trade”.

Commenting on the appointment of the new Secretary-General, Mathias Cormann, the Prime Minister stated: “I am convinced that Mr. Cormann will continue to transform and adapt the OECD in these times of change and will leave his personal mark on the work of the organisation".

In his speech at the first plenary session under the new Secretary-General, Minister Pierre Gramegna stated: “Under your leadership, I am convinced that we will continue to fight against climate change and support the digital transition. [...] It will only be within the OECD - a real engine for finding multilateral solutions - that we will be able to find a truly comprehensive tax response to the digital economy". He continued: "I would like to stress once again here that Luxembourg welcomes the willingness of the American administration to move this file forward, and I am convinced that we can find together and on time solutions with the approval of all parties - the big as well as small economies".

On the decision of His Royal Highness the Grand Duke, Luxembourg's Prime Minister also presented the insignia of Grand Officer in the Order of Merit of the Grand Duchy of Luxembourg to outgoing Secretary-General Angel Gurría.

A triple transition: sustainable finance

The discussions and reflections during the two-day meeting mainly enabled member states to take stock of the lessons they learned from the COVID-19 crisis and to discuss the avenues for a return to “normal” post-COVID, as well as the values ​​and policies on which they want to focus for the future. At this meeting, the OECD also welcomed Costa Rica, which has become the organisation's 38th member state.

During his speech as vice-president on the occasion of the opening session of the ministerial meeting, Finance Minister Pierre Gramegna notably underlined his vision of a triple transition to better emerge from the crisis. He stated: “Besides the double transition, we need a third axis, that of a transition to more sustainable finance. We must succeed in directing more and more investments towards sustainable projects and thus pass from billions to trillions of dollars, while supporting the transition of the financial sector itself, in particular with regard to climate risks and more general risks related to ESG [environmental, social and governance] criteria. The financial transition provides the basis for our economies to move towards a green and sustainable economy, and to do so gradually”.

Luxembourg's Minister of Finance was also optimistic about the latest economic outlook presented by Laurence Boone, Chief Economist of the OECD: “All countries recorded a very sharp decline in their growth in 2020, which was -6% in Europe. If the vaccination campaigns continue to accelerate, during the year 2021 we will have much stronger growth than expected. In Europe, growth rates are not always able to make up for lost time. But Luxembourg, which saw a decline of only -1.3%, will reach in the coming days, the coming weeks, the GDP before the crisis”.

During a bilateral exchange with Peter Haas, Assistant Secretary of State for Economic and Trade Affairs of the United States, Minister Pierre Gramegna was able to take stock of topics of common interest, such as sustainable finance and the ongoing negotiations around the taxation of the digital economy. He informed the American presidency of his priorities for the second part of the ministerial meeting to be held in October this year.

On the sidelines of the meetings, Minister Pierre Gramegna also met the Director of the OECD Center for Tax Policy and Administration, Pascal Saint-Amans. DIscussions focused on the taxation of digital companies, particularly in the context of the United States' desire to find an agreement on the matter in the coming months.

Bilateral meeting between Luxembourg and France's Prime Ministers

As part of his visit to Paris, Luxembourg's Prime Minister met with his French counterpart, Jean Castex. Bilateral and cross-border cooperation dominated discussions. Prime Minister Xavier Bettel pointed out: “Franco-Luxembourg cooperation and solidarity were excellent and even exemplary during the crisis. With our French friends, we have been able to find pragmatic and rapid solutions, guaranteeing free movement, in particular for frontier workers, but also with regard to their taxation and social security".

The Prime Ministers exchanged views on cross-border relations, in particular on the mobility of cross-border workers. In line with the decisions taken at the 2018 intergovernmental seminar, Prime Minister Xavier Bettel announced that Luxembourg is ready to make a new major contribution in order to co-finance rail infrastructure of common interest on French territory.

Prime Ministers Xavier Bettel and Jean Castex also took stock of the respective health situations and raised the importance of the interoperability of the European digital COVID certificate.

It was also in this context of the Franco-Luxembourg coordination with regard to the European digital COVID certificate that Luxembourg's Prime Minister met with Cédric O, France's Secretary of State for Digital Transition and Electronic Communications. Prime Minister Xavier Bettel notably stressed the importance of the interoperability of certificates: “The COVID Certificate will be a key element that will allow our citizens to regain, step by step, a certain return to normality. This is why it is important to coordinate with our neighbours, so that this newly regained freedom does not stop at the borders”. The meeting also provided an overview of issues of common interest in view of the Telecommunications Council which will be held in Luxembourg at the end of this week.