"Given the scale of recent European regulation in the areas of sustainability, digital or employment relations, the occasional and very welcome simplification measures taken here in Luxembourg look a lot like fighting a tornado with a hairdryer." The picture was not kind to the prime minister, (CSV), seated in the front row, but Fedil business federation chair  has not been singled out for being soft on the government. Despite this, Frieden said afterwards how pleased he was to be at Fedil rather than at the Chamber of Employees, where the New Year's ceremony was also being held and where the government was also represented.

In a 25-minute speech, the Fedil boss, who succeeded  , was applauded above all for another phrase. "Couldn't we agree on a statutory holiday of at least three years? This period could be used to clean up the existing overload and would give companies the room for manoeuvre they need to implement the rest", he said to the president of the European Parliament, Roberta Metsola, who was also much applauded, responding in her speech, "three years is a long time. I am the legislator..."

"Too often, we see legislation created in a vacuum - or worse, as a knee-jerk reaction to the latest headlines - that anyone in the field will tell you is either unworkable, unrealistic or leads to consequences such as job losses, reduced margins and missed opportunities," Mestola acknowledged in her speech all the same. "Our well-intentioned regulations and reporting obligations keep piling up, creating layers of bureaucracy that weigh down businesses of all sizes... I want the European Union to be known for effective and efficient regulation, based on common sense, rather than the bureaucracy we still see all too often."

‘We’ve gone overboard with regulation’

"The next five years must be devoted to better, smarter and more coherent regulation, focused on simplification and implementation," Mestola stated.

"Yes, we have gone too far in recent years", said the PM in his speech. "We should sometimes admit that the aim of these laws is good, but that the path we have chosen is bureaucratic. I hope that the new European Commission hears your message and the messages that we and others are carrying. The omnibus [rules on the EU’s Corporate Sustainability Reporting Directive] proposed by Brussels needs to be tried out to see how it works. That's why I'm going to ask parliament not to adopt the Luxembourg adaptation" of the European directive just yet.

"I'm going to ask Fedil and businesses to give me examples of legislation that weighs on their daily lives and ideas for simplifying it, so that citizens and businesses see it as simplification,” Frieden said. “Give us your suggestions!” On the subject of the trade unions, the PM, supported by half the government and listened to by around ten MPs, reiterated that he wanted to hear and listen to everyone, that these round tables and discussions were part of Luxembourg's culture on how to tackle challenges. "Without compromise, it is up to the government and parliament to take its responsibilities."

"Let me also say in this context that the Luxembourg government is very much in favour of free trade. It is an open economy. It is open to its neighbours. It is open to the rest of the world. And as a result, free trade agreements are part of that strategy. And if we have other countries on the other side, China, the United States, that want to introduce tariffs or other measures, I want the continent of Europe to react forcefully", said Frieden.

Highlights of Rassel’s speech

1. The current geopolitical landscape

Rassel stated: "Peace is no longer a matter of course, even in our part of the world... Defence capabilities and international cohesion between partners are key factors in this equation... The current political situation, which is unclear in many European countries, does not favour a common position to meet these challenges".

2. Difficulties in maintaining harmonious trade relations

"One of the most immediate consequences of the changing geopolitical context is the difficulty of maintaining harmonious trade relations... Tariffs, sanctions and protectionist policies are increasingly common, affecting the movement of goods and services... It seems that while we are trying to build bridges, others are busy building walls! But isn't that a slightly distorted image?... In recent years, European policymakers have adopted a number of pieces of legislation designed to impose our principles, our standards and our performance on our trading partners. We know that not all countries share these demands and that several of them reject what they call excessive interference by the old continent."

3. Europe's declining competitiveness

"Over-regulation remains a major challenge… We need to find a balance that maintains high standards without imposing excessive burdens on business… Given the scale of recent European regulation in the areas of sustainability, digital or employment relations, the occasional and very welcome simplification measures taken here in Luxembourg look a lot like fighting a tornado with a hairdryer… Couldn't we agree on a regulatory holiday of at least three years?"

4. Energy transition

"It is essential that we approach this transition pragmatically and treat it as a societal undertaking to avoid it becoming a source of additional costs and huge concerns for electricity consumers… An overly ambitious timetable and an undifferentiated approach to the options for action by different sectors can lead to economic disruption and social hardship…. Given the high carbon intensity of our imported German electricity, it does not make sense in the short-term for our industries to replace gas with electricity in their Luxembourg production units if their decision is motivated by the CSRD. This is what I would call an incoherent way of doing politics."

"When participating in meetings at European level, we see a decreasing willingness to invest in additional interconnection capacity within the EU due to the divergence of energy policies in different countries."

5. Modernising labour law

"The government's intention to modernise labour law is a positive and necessary step… We deeply regret the extremely negative, even threatening, attitude of the trade unions after the first ministerial consultations on this subject… This also implies making a necessary correction when absenteeism is far too high."

6. Improving the regulatory framework

"We see a window of opportunity for a major improvement in our regulatory framework. Some of it has to become more manageable, more realistic… Many new pieces of legislation are accompanied by the introduction of new regulators to add to the already long list of existing authorities to whom we are accountable… Multinational companies that are members of our organisation, i.e. those that have the ability to compare competitive advantages, tell us that access to regulators, their effectiveness and their interpretation of existing rules have become key investment criteria in our highly regulated business world."

7. Long-term financing of the social security system

Fedil, together with our UEL [employers federation] partners, supports this process, as the facts and figures clearly show that now is the right time to discuss the sustainability of our much-loved pension scheme."

9. Optimism about Luxembourg's economic future

"I am convinced that talented people, entrepreneurship and innovation are key to tackling many of the challenges we face today… Our country has the potential to prosper, thanks in large part to the visionary leaders and many other talents in our businesses… I am particularly excited about the potential of new technologies, especially artificial intelligence. AI has the power to transform industries, streamline processes and improve decision-making, giving us unprecedented opportunities for growth and efficiency."

Read the original French-language version of this news report /