The main aim of the parliamentary question tabled by the vice-president of the Parliament, André Bauler, which is due to be debated following the Prime Minister’s state of the nation address on 19 May, is first and foremost to launch a discussion of principle on effective state governance. “It is about spending efficiently and in a targeted manner to achieve the best social and economic outcomes,” he explains.

“The framework for public policy has changed radically since 2001. Whilst economic openness has always been a necessity for a country the size of Luxembourg, the accelerating pace of change—artificial intelligence, the climate crisis, geopolitical instability—calls for a fundamental re-evaluation. The state is no longer merely a referee; it has become a strategic factor of production that defines the regulatory, fiscal and institutional frameworks ensuring the country’s attractiveness,” continues André Bauler. For him, this attractiveness must be understood in a holistic way: “It is certainly financial and linked to taxation, but it relies just as much on essential non-financial factors, such as the quality of public infrastructure, the education system, the healthcare system and social stability.”

The balance between intervention and economic freedom

Inspired by social doctrine and liberal principles, the MP advocates a healthy balance between private initiative and state intervention. He rejects the idea of an omnipresent state that would stifle innovation, but recognises that the public authorities must act as a “saviour” of last resort during major crises (such as a pandemic or the conflict in Ukraine) to prevent an “economic graveyard”. A difficult balance to strike.

The state must step in where the private sector fails or falls short.

André Bauler, vice-president of the Parliament

When asked where to draw the line, he replied that “the basic principle must remain that of a healthy balance between public intervention and the market. The state must step in where the private sector fails or falls short,” citing the housing sector in particular as an area where “state involvement is now a necessity”.

Aware that purely fiscal areas of sovereignty are dwindling under international pressure, André Bauler believes that the future now lies in areas of expertise. Here, the state must play three key roles, inspired by the reflections of the Economic and Social Council (CES). The first is that of a catalyst — “the state must promote economic development and innovation”. The second role is that of a prospector — “the state must anticipate future trends, such as the scarcity of natural resources or artificial intelligence (AI)”. Finally, the state must act as an initiator — “it must dare to launch new sectors, following the example of the space industry, where Luxembourg was able to create a predictable legal framework before others did”. In short, a state that acts as an “architect” and remains constantly vigilant.

The aims of the parliamentary question

Following the debate, the vice-president of the Parliament hopes to table a motion to refer the matter back to the Economic and Social Council (CES) so that the social partners can draw up updated recommendations tailored to the challenges of 2026 (AI, climate change, geopolitics). He also wishes to raise awareness in order to safeguard the country’s financial resilience, “that famous fund which Pierre Gramegna, then minister of Finance, defined this as the “debt differential”—in other words, the difference between the level of public debt and the set limits, in particular the target of keeping public debt below 30% of GDP.

The MP points out that this gap is narrowing. He therefore sees this parliamentary question as a good opportunity to discuss the effective and efficient management of public funds in order to safeguard these safety margins for the future.