Preventing Luxembourg from becoming the next victim of the sovereign debt crisis is all about making the right decisions, according to the president of Luxembourg's Demokratesch Partei.

Speaking at a British Chamber of Commerce lunch at the Hotel Melia on Tuesday, Claude Meisch told a gathering of about 80 people his party's strategy for securing Luxembourg's future.

“We must reduce our public deficit, something which all the European countries must do. But, deficit cutting doesn't necessarily mean austerity, at least not here in Luxembourg,” said Mr Meisch, adding: “It's all about choices. Our country has to make them and all the countries suffering more than us have to.”

The MP and Differdange mayor laid out his party's recommendations to tighten the budget while ensuring sufficient investment in the right areas to allow for growth and sustainability.

Among them, he mentioned the party's road map with measures to ensure the long-term sustainability of the financial sector, which accounts for 30 percent of national revenues.

He did not go into detail however, he underlined that the party was not in favour of a financial transaction tax for Europe, unless it was applied around the world because it would put European countries at an unfair disadvantage. “We must understand, we all sit in the same boat so it would be better for us all to paddle in the same direction and find together the right solutions for the issues ahead of us,” he said.

Investment, the MP said, must continue, but in a more focused manner. Mr Meisch called for an annual review of the country's budget principle to ensure that it includes a growth strategy as well as budget cuts.

“Increasing taxes and reducing public investment will not prepare the future of this country,” he said.

Keeping politics out of education, ensuring schools have autonomy and that teaching is adapted to pupils' needs was a key focus of the party, as was increasing the availability and quality of childcare and improving training for the unemployed. Meanwhile, the politician gave his support to the suspension of the wage indexation system and blamed rising wages on the country's housing shortage, an issue which he says can only be solved by building more affordable housing to meet the rising demand.