More than 14,000 people are currently working for European institutions in Luxembourg, more than ever before. But EU employees based in Luxembourg are paid the same as their colleagues in Brussels, which some have complained is unfair due to the higher cost of living in Luxembourg and labour unions say hampers attracting staff to the country.

A recent study undertaken at the behest of the European Commission, and quoted by Asselborn (LSAP) during Tuesday’s meeting with parliament’s foreign affairs committee, shows there is a 10.5% difference in cost of living between Luxembourg and Brussels, primarily due to the notoriously high cost of housing.

“Luxembourg has not much to say as it’s the commission that has the initiative” to install a Luxembourg coefficient to increase wages for EU staff, said Yves Cruchten (LSAP), who chairs the foreign affairs committee. MPs and MEPs are backing the government position on finding a solution, he told Delano.

There have been rumours of fears and frustrations within EU institutions in Luxembourg that Brussels is absorbing responsibilities which could eventually lead to the grand duchy losing its European capital status. Restructuring efforts have forced EU workers to either change and re-train in unfamiliar roles or move to Brussels where much of the key responsibilities are heading, says a European Commission employee who wished to remain anonymous.

For instance the Consumers, Health, Agriculture and Food Executive Agency (Chafea), which employed close to 80 people was moved to Brussels to merge with another organisation for efficiency and financial reasons the commission stated at the time.

The Chafea move two years ago has prompted repeated questions from lawmakers and other organisations about the government’s steps in keeping EU offices in the country, most recently during parliamentary questions last month when Viviane Reding (CSV) pushed prime minister Xavier Bettel (DP) to discuss how he is lobbying commission president Ursula von der Leyen to support Luxembourg. 

However, Cruchten emphasised that new departments and agencies have opened in Luxembourg like the European Public Prosecutor’s Office (EPPO) or the EuroHPC high performance computing centre. “Therefore Luxembourg as an EU capital is not at risk,” he concluded, adding: “Several buildings are being constructed to host all these people in Kirchberg.”

Luxembourg 70 years ago to the year became the very first “capital of Europe”. In 1952, all newly created institutions had their headquarters installed here, and remained for 15 years, until the Merger Treaty came into force in 1967.

From 1952 to 1967 on the Place de Metz, on the Plateau Bourbon near the Pont Adolphe, Luxembourg served as the headquarters of the High Authority -- which would come to be known as the European Commission -- and the Council of Ministers of the ECSC, which served as a forerunner to the European Parliament, was in a building on Rue Auguste Lumière in the Verlorenkost district.

The seat moved to Brussels in 1967, but some commission services remained in Luxembourg. Under a 2015 agreement, just under 12% of European Commission staff should be based in the grand duchy.