Luxembourg's Finance Minister, Pierre Gramegna; Credit: John Chalmers

Again this year Luxembourg's Finance Minister Pierre Gramegna was the special guest for the 2017 edition of the American Chamber of Commerce (AMCHAM) Christmas lunch held at the Sofitel Kirchberg on Monday 11 December where he told well over 100 attendees that there is “no need to panic!”.

After a warm introduction from AMCHAM Chairman, Paul Schonenberg, Minister Gramegna started by saying that he had been just discussing favourite Luxembourgish expressions, and that he would like to say that the economy really is “Tip Top!”. He added that of course everything is relative, but that in comparison with the situation 10 years ago, and with other economies today, Luxembourg really is doing well. He also recognised the importance of foreign presence in the Grand Duchy. He told the audience that when he tells other leaders that over 45% of the population is foreign, and that in Luxembourg City that is closer to 65%, he is asked “doesn’t that cause social problems?”, and he replies and says “no, just the opposite, this diversity is what make us so strong … no extremist political parties … we are a laboratory for the EU single market!”. He also went on to say, in reply to Paul Schonenberg’s introductory remark that the economy must be doing well because so many foreign companies are here, that “the economy is doing well because you are here.”

In a speech covering several different subjects, the minister also talked about equal opportunities, where he pointed out that, while there is still more work to be done, Luxembourg already has the lowest gender salary gap in Europe, at 5.5%, and that Luxembourg is the world’s leading country for Green Securities, from the first ever green bond issued by EIB in Luxembourg in 2007 through to 2016 where the world’s first Green Stock Exchange, the LGX (Luxembourg Green Exchange) was launched by the Luxembourg Stock Exchange and now displays over 130 green, social and sustainable bonds … the most in the world.

He also covered the continuing help to business through the reduction in Corporation Tax from 21% last year to 19% this year, and announced a further reduction to 18% for 2018. Additionally the company tax credit scheme will be extended to cover software acquisitions and green transport.

An unexpected alarm that sounded in the building for several seconds also gave Minister Gramegna the opportunity to point out that, unlike the building “there is nothing in the Luxembourg economy to cause alarm”.

On Brexit he noted that it is bad news for the EU, but very bad news for the UK, and he talked about the idea that, of course, the bridges will still exist, but they will become more narrow in the future, and that Brexit, although important, is not the number one issue for most EU countries. He then went on to talk about how Luxembourg is doing its best to streamline the administrative processes around business creation, citing Chinese online payment company Ping Pong who, in receiving its recent PI (Payment Institution) licence from the Luxembourg Government, commented that “Luxembourg does not play administrative ping pong (sic)”.

Minister Gramegna ended his speech talking about pensions. He said that he could equally well give a “tip top” speech about pensions, or he could give an alarmist speech about pensions, and although the truth is somewhere in between, he says that Luxembourg is currently in a very good place in so far as he can honestly say that the country’s pensions are safe for the next 30-40 years, which is in stark contrast to other pensions schemes around the world. As he put it, he was talking to a French official who said “30 years? Our pensions are barely safe for 30 days!”. He continued by saying that Luxembourg is currently enjoying a 3% job growth per annum, which means that the state’s pension fund coffers are actually growing by around one billion euros per year.

The minister concluded by saying that although there are still some people who are concerned about their pensions in the future, his message would be simple “No need to panic!”