Luxembourg Employers’ Association (UEL) president Michel Reckinger said Thursday that employers believe the government’s energy tripartite should deal with the immediate economic consequences of the conflict involving Iran rather than broader structural debates over healthcare, housing and social policy.
Reckinger said the tripartite mechanism was designed to respond to immediate national crises.
“Tripartite is based on the law,” Reckinger said. “This war has consequences for Luxembourg: in energy, in supply, in inflation.”
He added that employers and the government broadly shared the view that the upcoming talks should remain focused on the direct economic consequences of the energy crisis.
Employers warn against wider talks
The 12 May meeting is expected to focus on possible responses to renewed inflation and energy-market instability.
Reckinger argued that attempting to fold broader structural disputes into the negotiations risked making the talks more difficult and reducing the chances of reaching rapid agreement on immediate economic measures.
Employers have become increasingly concerned in recent weeks about the possibility of a renewed inflation shock following tensions in the Middle East and warnings of further instability in energy markets.
The UEL president said the central objective should be containing inflation in order to avoid additional index-linked wage increases and further pressure on competitiveness.
Inflation becomes central concern
“If we can handle inflation, we have handled most of the problems,” Reckinger said.
According to Reckinger, rising energy costs risked feeding through into wages, transport costs, financing conditions and broader operating expenses for companies already dealing with persistent uncertainty over supply chains and industrial demand.
He argued that keeping inflation under control would also help limit pressure on interest rates and reduce risks for the wider economy.
Reckinger said businesses worry not only about energy prices themselves but also about the broader uncertainty created by renewed instability in the Middle East.
According to the UEL president, companies were already facing a difficult economic environment marked by weaker industrial demand in Europe, cautious investment decisions and continued pressure on financing costs.
He said another sustained rise in energy prices risked further slowing activity in sectors heavily exposed to transport, logistics and industrial production.
Reckinger argued that employers therefore wanted the tripartite to focus first on limiting the immediate economic shock before opening wider political debates over structural social-policy questions.
He said the current situation resembled the period following the outbreak of the war in Ukraine, when Luxembourg also faced rapidly rising energy prices and inflation.
Employers recall Ukraine-era response
“It’s somehow the same discussion we had three or four years ago with the war in Ukraine,” Reckinger said. “We know what worked four years ago.”
He said the previous energy crisis had shown that rapid coordination between the government and social partners could help contain wider economic disruption and preserve business activity during periods of exceptional volatility.
The UEL president also warned of possible supply disruptions linked to the conflict if tensions were to escalate further.
Reckinger said businesses remained concerned about the possibility of renewed disruptions affecting industrial inputs, logistics and energy-intensive sectors if the situation in the Middle East deteriorated further.
Supply risks add pressure
He said uncertainty itself was already becoming an economic factor for companies attempting to plan investments, production costs and hiring decisions over the coming months.
Reckinger argued that allowing the economy to weaken would ultimately prove more costly than measures aimed at containing energy prices.
