“These proposals are not necessarily new. Some of them were already in our proposals for the 2018 legislative elections. But we need to accelerate, as shown by Luxembourg’s fall in the IMD competitiveness rankings, published recently,” said , director of the UEL, under which 80% of employment in Luxembourg is represented. Olinger acknowledges that, by its very nature, the organisation is permanently involved in most such discussions with the government, on themes that evolve over time.
“The situation is not very favourable… to put it mildly,” stresses UEL president . “Public finances are not on a good trajectory: a number of issues could penalise the country’s future!”
“Without being GDP fetishists,” adds Reckinger’s chief economist, Nicolas Simons, “we’re getting used to a deficit of €1bn, €1.5bn a year from central government, a deficit that will reduce the next government’s power to act. Since 2020, the exceptional has become the norm. The ageing of the working population will mean more people retiring, which will reduce the social security balance by between €1bn and €500m over the next few years, a paradigm that Luxembourg has never experienced before.”
Encouraging two days’ teleworking a week
The result is a set of some sixty priority proposals, detailing what had already been presented on 9 March. These include:
—Eighteen employment proposals that Héloïse Antoine, the UEL’s head of employment and labour law, groups into three priorities: (1) facilitating continuing training by increasing the co-financing rate to 20% and creating a single training platform to make life easier for businesses; (2) reviewing the rigidity of the working framework to allow businesses to change the way work is organised (with a focus on Sunday working, for example, or on the various forms of leave); and (3) the need to upgrade self-employed status--the shortcomings of which were cruelly highlighted during the covid pandemic.
—Twenty-eight social security proposals that Antoine’s colleague, Michèle Marques, set out in the context of four challenges: ageing, good health, quality and sustainability. The idea is to avoid any increase in the contribution rates payable by employees and employers, and to respect intergenerational equity. There are suggestions for aligning objectives with what is being achieved; for efficiency efforts; for combating abuse and fraud; for concerted digitalisation (e.g. with electronic incapacity certificates and greater use of available data to draw up health policies tailored to reality); for prevention; and for reducing absenteeism.
—Twelve proposals on taxation. The UEL head of taxation, Flora Castellani, insisted on the urgency of a tax reform that would encourage investment in the environmental or digital transition, imagine a mobility-housing bonus for the younger generation, and change the taxation of supplementary pension schemes or even of teleworking to allow two days of teleworking a week.
On 21 June, as part of the work on the European Commission’s “European Semester”, the UEL had already pointed out the loss of “competitiveness of companies and the dizzying rise in labour costs”. According to Statec, average wage costs are set to rise by 5.8% in 2023 and 3.7% in 2024, mainly due to the large number of increments.
On Friday, the UEL reminded the government that it had already called attention to Statec’s latest economic report, which warned “the government and social partners, during last year’s tripartite negotiations, that the economic outlook was darkening” and that “the downturn in the economic dynamic can now be seen in many economic indicators, particularly GDP, at the turn of 2022 and 2023.” Since then, Statec has sharply revised its GDP growth forecasts downwards to +1.5% in 2023 and +2.5% in 2024.
This story was first published in French on . It has been translated and edited for Delano.