POLITICS & INSTITUTIONS - ECONOMY

Air of optimism at Amcham Christmas lunch



Everything is going to be OK was the message from speakers at Amcham’s traditional festive event on Wednesday.

In a brief address before lunch was served, guest of honour US ambassador Randy Evans reflected on his first six months in Luxembourg, an appointment he had specifically requested, he reminded his audience. He praised the country for having good people who can hold intellectual conversation. Despite briefly striking an appropriately sombre note by reflecting on tragic events in Strasbourg the previous evening the ambassador said that although the media doesn’t sell on the back of good news, he had the feeling that the future was going to be ok as long as the world had good leadership.

Amcham chairman Paul Schonenberg later introduced minister for finance Pierre Gramegna, who was running late due to commitments at the Chamber of Deputies where MPs were debating the government’s policy programme. But Gramegna too struck a positive note. “2018 was a great vintage for wine,” he joked. “It was also a great vintage for Luxembourg politics, otherwise I wouldn’t be standing here.” He said that even though it was citizens who voted for the current coalition, the government recognized that it needed to reach out to foreign residents and business leaders.

Gramegna said the new government would continue its commitment to maintaining Luxembourg’s triple A ratings status, ensuring public finances stay healthy and that the country remains competitive. The main opposition party, the CSV, shared these goals he said. “What we have in this country is a rare thing compared to the rest of the world, and certainly to Europe. We have consensus that we want this country to continue to be prosperous, to be attractive to foreign investors, to be competitive. It's easy to say but not easy to implement.”

Three policies for companies

The minister listed three policies that will affect companies in 2019--the reduction of corporate tax by 1%, the highering of the threshold for SMEs paying 15% tax on profits up to €175,000, and a commitment to take action to reduce corporate tax further if in future the effective tax of companies increases because the tax base is enlarged. “Find me another government that will do that,” he asked.

Gramegna also addressed what he called the “bold move” to increase the minimum wage by €100. The decision was taken because the high cost of living in Luxembourg, but the cost will be borne government in the form of tax credits as well as companies themselves, he explained. “We are consolidating something we are lucky to have in Luxembourg, which is social peace”, Gramegna said. “No strikes, no protests but dialogue. This brings with it a lot of predictability.”

Addressing the much-heralded policy of introducing free public transport, Gramegna explained that receipts from paying customers only covered less than 10% of the costs of running the transport system. He also explained that staff currently employed to control tickets would be used to increase security on public transport.

The minister also announced that parliament would next Tuesday vote on a bill transposing the EU anti-tax avoidance directive into law.

Looking ahead to expected growth figures, Gramegna said that Luxembourg would enjoy growth of around 3% in 2018 and 2019, and unemployment was falling back to levels before the financial crisis of 2008. “It all looks reasonably good,” he concluded.