Volt – No designated lead candidate
Strengths
The main strength of the Luxembourg economy is clearly its very international, multilingual workforce which brings together expertise and knowledge about legal, regulatory and cultural frameworks across Europe, but also in Asia, the Americas and Africa.
As a founding member of the European Union, it has had longstanding access to the largest economic market in the world and is an important gateway to Europe for many multinational companies. It is also home to several key European institutions, namely European Court of Justice, European Court of Auditors, Eurostat, European Parliament (certain directorates), European Investment Bank, Eurocontrol, … This favours a privileged access to decision making at the European level.
Political culture of structural change. Luxembourg’s governments have always shown to be very skilled in adapting the economy to new changing environments and initiate the necessary structural changes to maintain its level of welfare and competitiveness. Think of the change from agriculture to mining and steel, as well as subsequently to financial services. More recently media, space and the digital economy are being explored.
Luxembourg’s public finances are sound and allow for the public hand to react to external and internal shocks.
Weaknesses
Luxembourg still suffers from its reputation as a tax haven, although the regulatory framework has changed a lot in this respect in the recent past.
Luxembourg’s population is ageing, and the country must rely on migration if it wants to maintain growth and welfare.
The democracy deficit. With only about 60% of the population aged 18 or over allowed to vote, political representation is biased towards nationalistic and conservative political decisions. This is obviously not in the interest of the Luxembourgish economy, which has traditionally thrived in being highly adaptable to changing international and European environments.
A old-fashioned heterogeneous school system. In Luxembourg, average skills levels at age 15, as measured by the OECD Programme for International Student Assessment (PISA), are significantly lower than the EU average. The gap between advantaged students and their disadvantaged peers is bigger in Luxembourg than in any other EU country. The main reason for that is the inadequacy of the current Luxembourgish school system with the socio-economic reality of our country. The language spoken in the national school system at primary level is Luxembourgish, while pupils learn to read and write in German. All subjects are taught in German. This constitutes a very high demand for language skills in a country where only one in three pupils speaks Luxembourgish as their first language. And it is an impediment for mobile workers to settle with their families.
Automatic wage indexation increasing the risk of a wage-price spiral.
Opportunities
Luxembourg is well-placed to embrace and develop new technologies in the field of digital economy in general and Artificial Intelligence in particular, especially in the financial sector.
Its importance as a regional and international logistics hub could further increase.
Development of commercial opportunities in space has already started and could thrive, given the expertise in financial and legal engineering available in the country.
Threats
In the short-term Russia’s war in Ukraine remains a threat to the economy, given the uncertainty it generates in all sectors, but especially in financial markets, as well as the inflationary pressure it induces.
In the longer-term population ageing is going to put pressure on the pension scheme, and will require a reform of the system, probably even if the influx of foreign workers continues at present levels.
If continued, housing prices dynamics could hamper the attractiveness of the country for workers and become a competitive disadvantage. Luxembourg has been able to attract foreign workers thanks to relatively high wages, advantageous benefits, and high quality of life. In recent years, high housing prices have pushed many workers to look for housing across the borders. Yet, the balancing role of the cross-border housing market may weaken going forward due to higher private transportation costs and longer commuting time and as housing prices in neighbouring countries gradually increase. The initial effects have already been felt through labour shortages where wage differential with neighbouring countries is small. Hence the threat that Luxembourg’s capacity to attract and retain skilled workers could recede, reducing our competitiveness.
A business-friendly tax system has obviously helped Luxembourg to attract new companies. Yet decisions taken by the OECD and the EU in recent years are increasingly restricting.
Luxembourg’s freedom to set taxes at attractive levels and to participate in tax competition across Europe and even worldwide. We at VOLT believe that this is a good development for a stronger, more integrated European economy. But it is of course a threat to Luxembourg’s attractiveness to business, which will need to be properly mitigated.
Last not least the democracy deficit bears the risk of a rise of the conservative / nationalistic vote. As a consequence, the support to policies emphasising Luxembourg’s strong commitment to the European Union, and being business friendly, as well as open to immigration and foreigners might dwindle. This might lead to Luxembourg becoming less open and less attractive to foreign investments.
Déi Gréng – Sam Tanson
Strengths
A high GDP, a good quality of live in a multicultural society
Luxembourg ranks among the countries with the highest GDP per capita in the world. According to the OECD, the country also performs well across several well-being dimensions in the Better Life Index. Luxembourg outperforms other countries in income, health, environmental quality, safety, and life satisfaction. Furthermore, Luxembourg is a multicultural society. We are cosmopolitan by tradition. The success of our country, which has been home to people from all over the world for over 150 years, is also the success of diversity and successful integration. We can be proud of that. And we want to continue along this path without turning a blind eye to what is not yet running smoothly. In the future, indicators such as the “PIBien-être” / “GDP welfare” as well as the measurement of real costs of living (reference budget) and quality of life should therefore be given more weight in the policy making process.
Good social security and health care system
Luxembourg has great a social security system and a good health care system. Both certainly add to the attractiveness of the country as a business location. Nevertheless, the pandemic revealed some structural weaknesses that need to be overcome in the coming years.
A good education system
In Luxembourg we can be proud of a high-quality education system, contributing to a well-educated workforce and a culture of innovation. The multilingualism of our country is a further advantage of our educational system, despite coming with challenges, also.
Weaknesses
Our dependence on the financial sector and on fuel tourism
While the financial sector is a strength, it also represents a vulnerability. Overreliance on the financial industry exposes Luxembourg to global economic fluctuations and regulatory changes. As déi gréng, we aim to make our financial centre a global leader in sustainable finance, commit to making the share of climate-friendly investments in line with the Paris climate goals, and ensure that climate financial risks are exposed and reduced. Additionally, we must continue to gradually reduce the dependence of state finances on fuel tourism by gradually increasing CO2 prices.
Our dependence on fossil fuels
The war in Ukraine and the energy crisis have shown us how much our dependence on fossil energy imports is already jeopardising our security and prosperity. As Greens we are convinced that the future belongs to renewable energies.
Opportunities
Taking advantage of the energy transition
The future belongs to renewable energies and Luxembourg has the best conditions for becoming a pioneer of a climate-neutral industrial society. We have a well-developed scientific landscape, a great engineering culture and a high level of environmental awareness in society. Under Green leadership, we have made a great deal of progress in recent years on the path to a clean, cost-effective, and crisis-proof energy supply. We now produce as much renewable electricity as households consume. Over the next few years, it is important to build on these successes and to promote the ecological modernisation of our energy system, industry, transport, and the construction sector.
Fostering a green economy
We are convinced: The more and the sooner our companies integrate social and environmental sustainability into their business practices and, as climate champions, open up new markets and fields of business, the more Luxembourg will be able to assert its success. Many companies in our country have long since recognised the signs of the times. Whether it is renewables, energy efficiency, environmental technologies, circular economy or sustainable construction: The green economy is booming and creating jobs. To support these developments, we need a State that makes things possible, promotes innovative entrepreneurship and helps future technologies to break through. That is what we are committed to.
Using digitalisation to our advantage
The speed at which digital transformations are evolving is enormous, and with this comes the pressure on politicians to keep pace. Large AI language models such as ChatGPT, which are currently reaching the mass market, mark the beginning of a new technological revolution. These highly automated systems offer exceptional opportunities to improve our lives, but also huge risks. déi gréng stand for a digitisation that serves people and the common good and does not discriminate against or leave anyone behind. Through comprehensive support for “start-ups” and better networking of research and business, we want to work to ensure that digital technologies contribute to combating climate change and promote the eco-social transformation.
Threats
The climate crisis
Droughts, heat waves, forest fires, torrential rain, and floods: The human-caused climate crisis is no longer something abstract, and its devastating consequences have long been felt in Luxembourg. Avoiding the climate crisis and protecting the environment is the central challenge for our generation. The good news is that the scale of the climate crisis can still be limited. It is therefore important to implement the energy transition consistently, to achieve our climate targets and at the same time to prepare our society in good time for the effects of climate change on people, the environment and our infrastructure. We can achieve this: With innovative strength and a sense of community, we have the prerequisites for coping with the socio-ecological U-turn. Not only to make our contribution to a climate-friendly world, but also to provide new prospects for our economy. With green jobs, with a greater quality of life and social justice.
Rising social inequalities
Luxembourg is a rich country, indeed the richest country in the world if based on per capita GDP. So much for the statistics. However, by no means do all people benefit from this. Some people feel that they are working hard and yet they are barely able to afford the essentials. The number of people at risk of poverty is rising in Luxembourg. The weakest among them – and at the same time the most frequently affected – are children and young people. Whether it involves education, career opportunities or health: Social disadvantage, often created in childhood, has consequences, some of which last a lifetime. That is unacceptable. And it has to change. Luxembourg cannot afford to have only more cohesion. Luxembourg needs more cohesion, more solidarity and more social justice. We all benefit from that. Because social balance and fair opportunities not only strengthen our democracy, but also our economy.
The housing crisis
An affordable house or flat in a good social environment is part a good life. Whether it is in the countryside or in the city, rented or your own house: Living in Luxembourg must be affordable for everyone. It is an existential basic need. And that is why it is now finally enshrined in the Constitution as a fundamental right. But the housing market is tense. Housing costs are becoming a burden for more and more people. The causes of this development go back several decades and have ignored by political leaders for just as long. It was déi gréng who had the courage to initiate the overdue change of course in housing policy, including the national strategy for affordable housing, record investments in public housing and the “Pacte Logement 2.0” (Housing Pact). In the coming years, we must consistently continue the offensive that we have begun. Nationally as well as on a municipal level.
ADR – Fred Keup
Strengths: Luxembourg’s main strength is still its politically and socially stable, multilingual and open-minded environment. In comparison to other countries, the Governement and administrations are responsive. Its financial center still offers substantial competitive advantages, impressive expertise and has a capacity for innovation.
Weaknesses: Real estate prices are high. The country also needs to make efforts in order to regain more efficiency and faster responsiveness.
Opportunities: The society is extremely open for new ideas. The university, several scientific institutes contribute to a dynamic environment. Generous support for start-ups and spin-offs is very high on the agenda.
Threats: A difficult international environment due to the war in Ukraine, high inflation and unaffordable energy prices
Liberté-Freiheet – Roy Reding
Luxembourg is endangered! Public debt, housing shortage, non competitive taxation of individuals and companies, too many regulations on the banking sector, threat of introducing taxes on inheritance and wealth by a governing LSAP, the list goes on.
Déi Konservativ – Joé Thein
The political, social and economic situation in Luxembourg is a total disaster after the political 10-year reign of the coalition parties LSAP, DP and Green Party, as we call it “Gambia” in the vernacular. It is a failed political coalition and government with no major successes, progress or evolution. Luxembourg officially has a debt of over 22, 46 billion and a modest forecast of 30 billion in 2030. Linked to that, Luxembourg has a high unemployment rate, high inflation, high living standard and rising prices, a crisis in matters of the housing market and expensive rent, a population overgrowth with its problems and consequences, a huge traffic issue, an increasing criminality, democratic deficiencies, social conflicts and societal life problems, bad immigration and integration policies, no big heart for our national and cultural identity and no interest in the ever more disappearing mother- and national language. We are here to change all of it!
KPL – Ali Ruckert
The KPL recognizes first and foremost the problems of Luxembourg’s national economy. They consist in the fact that all political and economic decisions, firstly, are taken on the basis of the profit interests of large companies and banks, and secondly, unquestioningly follow the guidelines of the European Union.
As a result, for more than a year, Luxembourg has participated in the sanctions policy and the economic wars of the EU and the USA, which are being waged against Russia and China. Above all, Luxembourg’s unconditional participation in the embargo on energy sources from Russia has resulted in an unprecedented increase in prices in its own country, which is expressed in a sharp decline in the purchasing power of the majority of the population. Luxembourg companies are also suffering the consequences of this policy, especially the burden of increased energy prices.
In addition, the KPL criticizes also from an economic point of view the unlimited support of the war in Ukraine through the supply of weapons, equipment and money, as well as the growing military spending – while at the same time there is not enough money to solve acute problems in our own country: unemployment, the lack of affordable housing, the increasing proportion of people living in poverty, including mainly the elderly people. In addition, there are numerous shortcomings in health care, education, a growing lack of perspective among the youth, insufficient opportunities in the field of sports and culture …
In its election program for this year’s elections to the Chamber of Deputies – available at www.kommunisten.lu – the KPL not only mentioned these problems, but also made numerous concrete proposals to solve them.
