Bettel on the State of the Nation

"Our country is doing better today than it was two years ago"

A word cloud shows in English the words most commonly used in Bettel's State of the Nation address on Tuesday
A word cloud shows in English the words most commonly used in Bettel's State of the Nation address on Tuesday
Graphic: JB

(JB) Transparency and taxes were hugely pertinent as buzz words used in the State of the Nation address given by Xavier Bettel on Tuesday, the same day the LuxLeaks trial began.

The annual occasion for Luxembourg's Prime Minister to summarise the country's situation, both socially and economically, saw Bettel underline efforts to achieve greater transparency and distance itself from any gray lists, “which have been rewarded with more confidence from investors.”

Furthermore, he said “through the current policy of the government for more transparency and a responsible fiscal policy, we are now better focused internationally than we were two years ago.”

The theme could not have been more pertinent as on Tuesday the trial of three men accused of disseminating private tax rulings between the Luxembourg government and multinationals. The disclosure, known as LuxLeaks, showed how companies like Apple, IKEA and Pepsi saved billions of dollars in taxes via so-called sweetheart deals with Luxembourg.

Budget in surplus of 672 million euros

In addition to transparency, the Prime Minister talked about the country's budget, showing a surplus of  672 million euros. He credited the figure in part to economic recovery and the effects of a new approach to the budget process.

He went on to say that the economy's pillars were evolving well and that in many areas, economic activity had increased.

Xavier Bettel making his 2016 State of the Nation address in the Chamber of Deputies
Xavier Bettel making his 2016 State of the Nation address in the Chamber of Deputies
Photo: Pierre Matgé

On the subject of the Grand Duchy's financial sector, the leader pointed out Luxembourg is the second most important financial centre in the EU and the 14th in the world.

Lowest unemployment rate in the EU

Bettel proudly mentioned that Luxembourg has the lowest unemployment rate in the EU at 6.5 percent. And he pointed out that the state is paying 21m euros less in unemployment benefits today (a total 242.7m euros) than five years ago (263.7m).

Despite the improvements, Bettel acknowledged there remained 17,405 people out of work and said staffing had been increased at ADEM offices and training available to jobseekers had been improved. He also alluded to the reform of the RMG benefits system, which he said would soon be finalised.

1-1-1 companies draft bill to follow shortly

On the subject of business performance, Bettel said the picture was better than it was a few years ago. He mentioned the imminent presentation of the draft bill 5730 on the creation of simplified companies, also called “1-1-1 companies”.

These companies, once permitted under Luxembourg law, would remove the administrative barriers and enable an entrepreneur to create a business with one euro in a single day. He also talked about the creation of an Entrepreneurial Centre of Excellence, aimed at helping young entrepreneurs.

Bettel's speech lasted 1.5 hours
Bettel's speech lasted 1.5 hours
Photo: Pierre Matgé

“The goal is that Luxembourg will play a medium-term role in the creation of new companies. We would like to be a landing pad for start-ups, offering the best conditions for young entrepreneurs who wish to establish their companies here,” he said.

Regarding workforce mobility, Mr Bettel announced the capacity for park and ride schemes would more than double over the next four years, from 11,800 to 24,000 in 2020.

Housing & security

In terms of the housing crisis, he said that measures had been planned to increase the supply of housing. “We will endeavour to change the paradigme, not by giving more money to people but by increasing the amount of subsidised housing available. 227 new projects, equivalent to 3,509 new homes, will be created,” he said.

Mr Bettel mentioned the reform of family benefits and also touched on measures to encourage people to become more active and healthy. He mentioned security within Luxembourg, the level of which was heightened in light of the Brussels terrorist attacks.

Security and the feeling of safety are now our priority, he said adding that an increase in police personnel was bearing fruit. He said that efforts to tackle radicalism at the start were underway, focusing mainly on schools and children's homes.

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