Luxembourg Government, Social Partners Discuss EU Commission Recommendations at National Social Dialogue Meeting

On Monday 13 June 2022, Luxembourg's Prime Minister Xavier Bettel, the Minister of the Economy, Franz Fayot, and the Minister of Finance, Yuriko Backes, met with the social partners at Senningen Castle in the framework of the 2022 annual cycle of the European Semester to discuss the country report and the country-specific recommendations issued on 23 May 2022 by the European Commission.

After Prime Minister Bettel's introductory speech, Minister Backes and Minister Fayot presented the country's report and the said recommendations as well as the follow-up that the government has already given to it and the responses it intends to provide in the months to come.

Prime Minister Bettel said: "I am happy that the social partners have accepted our invitation to exchange today about the European Semester and the recommendations made by the European Commission for Luxembourg for 2022. Of course, the future remains unpredictable. We all know that. But our country, its people and its economic and social model are doing well. Luxembourg continues to be synonymous with security and stability and to be socially just".

This meeting also allowed discussion with the social partners on the economic prospects for the European Union (EU) and Luxembourg. Despite the recovery that began in 2021, the macroeconomic context is now overshadowed by the war in Ukraine and sharply rising inflation rates, with uncertainty generally remaining very high.

The European Commission's recommendations to Luxembourg this year relate to topics such as the budgetary policy to be pursued in the short and medium term, the fight against aggressive tax planning, economic recovery, the implementation of the recovery and resilience plan, education policy and energy policy. The country report, meanwhile, covers a multitude of topics such as productivity, equity or macroeconomic stability and environmental sustainability.

The European Commission recommends ensuring that the increase in current expenditure is well controlled, while addressing the needs of households and businesses most vulnerable to increases in energy prices as well as people fleeing Ukraine. Furthermore, the long-term sustainability of the pension system should be ensured. In its report, the Commission also recommends that measures be taken to increase the chances of all students in the education system. Finally, Luxembourg is called upon to reduce its global dependence on fossil fuels, by accelerating the deployment of renewable energies.

Minister Fayot commented: "The 'Ons Wirtschaft vu muer' [our economy of tomorrow] roadmap is one of our instruments for designing the recovery and for making our economic fabric more resilient by 2025. It allows, in connection with the proposed recommendations for 2022- 2023 of the European Commission and with the new "REPowerEU" initiative, to further accelerate the green transition and digital transformation. These transformations play a central role in stimulating the development in Luxembourg of a competitive, resilient and sustainable economy, ready to meet the challenges and opportunities of tomorrow".

Minister Backes said: "The recommendations of the European Commission represent a useful contribution to our reflections at national level and I welcome the fact that the social partners continue to be fully associated with them within the framework of the European Semester. In the current context marked by major uncertainties, I am above all committed to conducting a responsible and prudent policy, while meeting the challenges we are facing in the short and medium term".