CSV, DP Sign Coalition Agreement for New Luxembourg Government

On Thursday 16 November 2023, the Christian Social People's Party (CSV) and the Democratic Party (DP) signed the coalition agreement for the next Luxembourg Government.

The signing, following the approval of the decision-making bodies of the two parties on Wednesday evening, was also the occasion for a press conference, during which the formateur and soon-to-be prime minister Luc Frieden presented the main goals of the new CSV-DP coalition government.

Luc Frieden noted that he was able to tell Grand Duke Henri "mission accomplished" on Wednesday 15 November 2023, just over five weeks after the Grand Duke had appointed him formateur of the next government. Mr Frieden described the negotiations as "intensive, constructive and nice", stressing that the goal was to make Luxembourg stronger for the future, taking into consideration economic, social and envirionmental priorities. This includes increasing people's purchasing power, for example lowering taxes as of 1 January 2024 and introducing a project by 2026 to overhaul the tax system (to offer more individualisation). Another priority is having a competitive economy in all sectors, noted Mr Frieden. For businesses, taxes are expected to be adjusted to the OECD average, and digitalisation will be encouraged.

Luc Frieden added that measures would be introduced to combat poverty, for example increased (financial) support for those in need. On housing, he noted that certain measures would already be introduced from the start of next year to address the crises related to housing and construction. These include decreasing tax rates and increasing the "Bëllegen Akt" tax credit on notarial instruments for buyers. Another priority is to build more (affordable) housing, by also working together with the private sector. Administrative procedures should also be simplified and accelerated, with a "guichet unique" and a tracking system for planning permission files foreseen.

Luc Frieden emphasised the importance of climate protection but stressed that this should not "block" other projects, such as those in the areas of housing and construction. He briefly presented plans to invest significantly in renewable energy.

For families, the new coalition government has pledged to improve work-life balance. This is expected to impact parental leave (to be increased by three months without financial changes) and maternity leave (to be made more flexible whilst guaranteeing social security).

On healthcare, Luc Frieden expressed the intention to improve ambulatory care and increase the regional offer to take some of the pressure off emergency departments at hospitals. Attention will also be given to prevention. On security, he mentioned plans to introduce municipal police forces as part of the Grand Ducal Police but under the supervision of their respective mayors. He later also mentioned future-ready schools and a modern state (digitalisation).

Also present at the signing and subsequent press conference were Xavier Bettel, outgoing prime minister and head of the DP delegation, and Claude Wiseler, head of the CSV delegation. Both agreed with Luc Frieden that the coalition talks had been positive and that the goal of this agreement was to prepare Luxembourg for the future.

The first Government Council (cabinet) is expected to approve the 209-page coalition agreement on Monday 20 November 2023, after which it will be presented to the Chamber of Deputies (Luxembourg's parliament). It is set to be made public later that same day. A parliamentary debate is planned for next week, likely on Wednesday 22 November 2023.

Before this, on Friday 17 November 2023, Grand Duke Henri will swear in the new CSV-DP coalition government.