In a circular dated 4 February, the finance minister, Gilles Roth (CSV), called on ministries and government departments to limit the increase in public spending to 4.5% per year compared with the 2026 budget. The circular sets out a common working framework for all ministries in preparing the 2027 budget, with the dual aim of achieving a gradual reduction in the deficit by 2030 and encouraging the concentration of resources on the priority areas of the government’s programme, i.e. the fight against poverty, support for purchasing power, housing, digital and sustainable transitions, defence and social security.

A circular that has moved the opposition, always critical of the current policy of reducing the tax burden. The opposition has also criticised the government’s fiscal policy against a backdrop of growth that remains below its historical average.

Differentiated fiscal discipline

In an answer to a parliamentary question tabled on 4 February by Sam Tanson (déi Gréng), the minister denies any temptation to pursue a policy of fiscal austerity. Quite the contrary. He is defending a fundamentally anti-cyclical fiscal policy that seeks to reconcile support for economic growth with rigorous control of public spending. For the government, controlling spending is not synonymous with blind austerity, but with “responsible management” of state resources aimed at preserving household purchasing power and public investment capacity.

Gilles Roth points out that past efforts to boost purchasing power and investment should stabilise the economy. However, this does not rule out the need for a degree of discipline. The Minister refers to a “differentiated allocation of efforts”. While certain priority areas will be preserved, the other ministerial departments will have to face up to a control of expenditure described as “proportionate and coordinated”. No further details are given. Except that strategic priorities such as the energy transition and the climate plan will be maintained.