Luxembourg’s tripartite talks will continue at Senningen Castle on Thursday and are already expected to run into Monday, after the second day ended with Prime Minister Luc Frieden saying negotiators were “not there yet”. The government will use Thursday morning to examine possible proposals on the social minimum wage, before the next tripartite session begins at 3pm.

“We are not there yet,” Frieden said. “That is why tomorrow afternoon, as I said, the next tripartite meeting will take place.”

Frieden said the government also expected to meet the social partners again on Monday, probably for the whole day. The public account of the talks was narrower than on Tuesday, when OGBL president Nora Back and LCGB president Patrick Dury both spoke after the first full session. Back had also said before Wednesday’s meeting that the OGBL did not want negotiators to pick out easier points for agreement while leaving more difficult issues for later.

At the end of day two, the remarks came from Frieden, Romain Wolff, president of the CGFP, and Christian Hahn, president of the Chamber of Agriculture.

The wage bind

Frieden again linked the tripartite to the energy and inflation shock following the war in Iran and the Gulf region. He said Wednesday’s discussions had covered energy-price measures, support for households moving away from fossil fuels, the social minimum wage and aspects of housing policy.

The social minimum wage took up a large part of the day, according to Frieden. He described the issue as “very difficult”, with unions and employers approaching it from different sides.

“It is important, on the one hand, that people can live from their wages and live decently,” Frieden said. “On the other hand, companies that have employees on the minimum wage must also survive and must be able to pay those wages.”

The issue also affects many small businesses, including retail, restaurants, agriculture and parts of industry, Frieden said. “We must not lose sight of the fact that Luxembourg companies also have to compete in an international environment,” he added, saying wage differences with the surrounding region had to be considered.

Frieden said the government would look for proposals that could support low-income workers without adding wage costs beyond the measures it had already put on the table. “We have agreed that, as a government, we will now consider how we could put solutions on the table,” he said.

Tax relief stays live

Wolff said the talks were constructive, while acknowledging that some points were harder than others. The CGFP had initially wanted a relatively narrow agenda, he said, because it was always difficult to reach agreement when too many items were on the table.

The issues brought to the government by different sides were nevertheless being discussed, Wolff added. Housing was one of them. He said the CGFP wanted the ceiling for the 3% super-reduced VAT rate on main residences to be doubled from €50,000 to €100,000, a measure he said would concern a purchase or renovation of around €700,000.

Wolff also pointed to CGFP demands for an inflation adjustment of the tax scale, tax credits and support for households. Details were still being worked on, he said. “There is work being done on that at the moment,” Wolff said. “So there are no details on it yet, but it really is a constructive discussion that we are having together.”

Farms feel the squeeze

Hahn said agriculture was back at the tripartite table after 14 years of absence, at a time when farms were exposed to the crisis. “We are also a sector that is hugely affected by this crisis,” Hahn said. “All the work done outside also uses energy, and energy is what is simply becoming too expensive for us at the moment.”

Hahn said many agricultural products were sold at world-market prices, while energy had become too expensive for the sector. The social minimum wage also mattered for agriculture, he said, because farms had to keep costs under control while continuing to provide food.

Hahn welcomed the progress made so far and said further movement from different sides in the coming days would make it easier to find a compromise that everyone could live with.

Energy holds the centre

Asked whether the government would consider a partial agreement on energy, purchasing power and related measures, Frieden did not commit to splitting the talks. “Our objective is to find an agreement on all subjects with all social partners,” Frieden said. “A tripartite is always, in the end, a compromise.”

Frieden said the government’s priority remained strengthening purchasing power, shielding households and businesses from the external crisis, slowing energy prices and fighting inflation. Jobs were part of the same calculation, he said. “We must not take decisions that put jobs at risk,” Frieden said.

Frieden said some issues could later be taken up outside the tripartite, but added that energy and purchasing power had to remain the immediate priority. “The question of energy and purchasing power must be our absolute focus,” Frieden said.

The talks continue Thursday. Monday is already on the calendar.