(L-R) Yuriko Backes, Luxembourg's Minister of Finance; Mathias Cormann, OECD Secretary-General; Credit: MFIN

Luxembourg's Minister of Finance, Yuriko Backes, participated in the OECD Ministerial Council Meeting (MCM) on Wednesday 7 June 2023.

The MCM, held from 7 to 8 June 2023 under the theme "Securing a Resilient Future: Shared Values and Global Partnerships", is chaired this year by the United Kingdom, with Costa Rica and New Zealand as Vice-Chairs.

"This annual meeting is an opportunity to debate and share ideas on the economic and social challenges we face as an international community. In the face of current challenges, it is more important than ever to promote a collective vision of the global economy," commented Minister Backes. "The OECD, as a community of like-minded countries, has a major role to play in addressing these issues, including the vulnerability of global supply chains, the development of innovative technologies to achieve zero net emissions by 2050 and gender equality."

Ahead of the MCM, the new OECD Chief Economist, Clare Lombardelli, presented the organisation's new economic outlook, with a particular focus on gender equality and women's economic empowerment. While the global economy is turning a corner, it is still far from sustainable and resilient growth. While the factors that contributed to the slowdown in global GDP growth are easing, the recovery in global growth remains relatively weak at 2.7% in 2023, with a modest recovery to 2.9% in 2024 - well below the average growth rate of the pre-COVID-19 decade.

In relation to the global economic outlook, Minister Backes highlighted the crucial importance of ambitious structural reforms in order to stimulate long-term sustainable economic growth and improve the quality of life of citizens. "The outlook provided by the OECD highlights the success of the measures deployed to counter the energy crisis. Luxembourg has distinguished itself among OECD countries by its resolute approach to the fight against inflation. Still according to OECD figures, Luxembourg is the country where the increase in real household disposable income was the strongest between 2021 and 2022, among all the members. However, it should be noted that the OECD recommends a gradual reduction in aid. This will lighten the burden of fiscal policy and consolidate our reserves in order to be more resilient in the face of future crises," she stated.

During a session decicated to the OECD economic outlook with a focus on gender equality and women's economic empowerment, Luxembourg's Finance Minister noted: "The promotion of gender equality is not only a question of social justice, but also a smart economic strategy. Women play a vital role in our economy and their empowerment is essential for a robust and sustainable economic recovery. I therefore welcome the efforts of the OECD to promote gender equality and the empowerment of women, demonstrating through objective data that this stimulates economic growth, strengthens democracy, improves social cohesion and contributes to the fight against climate change."

Minister Backes also spoke during the session on the war in Ukraine, in which Ukrainian Prime Minister David Shmyhal could participate only virtually due to the Russian attack on the Kakhovka Dam. Luxembourg's Finance Minister welcomed the support of the OECD to Ukraine, with the opening of an OECD office in Kyiv in 2023 and the signing of a country programme for Ukraine: "The OECD has an important role to play in offering its expertise to support and guide Ukraine's reconstruction efforts. I warmly welcome the commitment of the OECD and I am confident that this partnership will bear fruit. This programme provides significant financial support to help rebuild Ukraine while supporting Kyiv's work to align with OECD standards, paving the way for future OECD membership."

On the sidelines of the MCM, Minister Backes had an interview with OECD Secretary-General Mathias Cormann and his new team, including Deputy Secretary-General Fabrizia Lapecorella and Director of the OECD Centre for Tax Policy and Administration Manal Corwin, to discuss the main themes of the MCM, the progress made in the implementation of the reform of rules in the field of international corporate taxation as well as the macroeconomic and geopolitical situation. "I was delighted to discuss with Secretary-General Cormann and his main collaborators the current challenges that we face as an international community. It is crucial that we work together to develop innovative solutions to the problems we encounter," Minister Backes stressed.

As Luxembourg's Ministry of Finance noted, this year's MCM also sees the adoption of a series of important texts, including the country programme for Ukraine, a contribution for the promotion of gender equality, a strategic framework for the Indo-Pacific and an OECD-Africa cooperation framework for the period 2023 to 2026. This is the first MCM since the establishment of Luxembourg's permanent representation to the OECD and UNESCO.