Mobility, energy, climate... In his State of the Nation speech on Tuesday 11 October, (DP) gave a series of facts and figures about the Luxembourg economy. Delano’s sister publication Paperjam has checked some of them out and dug into them.
Economy
"Almost no economy in Europe recovered as quickly after the lockdown as Luxembourg’s."
True. At least if you take into account the figures for the year 2020, which is the year of both the lockdown and the decontamination. , Luxembourg’s real GDP in volume grew by 5.1% in 2021, after falling by 0.8% in 2020. Only Estonia (-0.6%), Ireland (+6.2%), Lithuania (0%) and Norway (-0.7%) experienced more limited falls in the same year. Although, not all European countries lifted their lockdown at the same time, which makes limits the comparison of the “speed of recovery after the lockdown”.
"Since the pandemic, we have paid out €5.5 billion in direct and indirect support to people and businesses. This extraordinary amount is not only impressive in international comparison, but can be considered unprecedented in Europe."
False: The Ministry of State did not provide Paperjam with the data to substantiate this claim.
According to available data, in February 2022 alone, direct and indirect aid to companies linked to covid, including short-time working, amounted to €1.3bn. At the household level, the most important item is family leave, to which the state contributed €238m in 2020, according to a report from the National Health Fund (CNS). There were also the €50 vouchers for a night's stay for tourists, which benefited both households and the hotel and catering industry, with a budget of €37.5m.
The first tripartite agreement, including the energy tax credit, was valued at €830m. The second one is worth more than €1bn.
This brings the total amount of aid to around €3.5bn.
Contacted by Paperjam, the European Commission claims to have been notified by Luxembourg of €3.67bn of state aid in the context of covid and €725m since the beginning of the war in Ukraine. This amounts to a total of €4.4bn.
But even at €5.5bn, would it really be "unprecedented in Europe"? The European Commission counted €3,000bn in requests from governments wishing to offer state aid linked to covid. 52.8% concern Germany, 16.9% Italy, 10.6% France, 5.6% Spain, 2.3% Poland and 1.9% Belgium. Without taking into account the proportionality relative to the population or the size of the country, Luxembourg is therefore ranking lower. For the war in Ukraine, €455bn was validated for state aid since the beginning of the war. 49.77% of the aid was validated to Germany, 35.3% to France, 4.29% to Italy, 3.85% to Finland, 2.03% to Spain and 1.59% to Poland.
When aid is expressed in per capita terms, Germany is still ahead of Luxembourg.
And if we compare the amount of covid aid to the 2020 budget by country, France has given proportionally more money than Luxembourg, with €318bn on an initial budget (before we learnt that there would be exceptional expenditure linked to covid) of €556bn if we include the special accounts and annex budgets, against €3.67bn on a budget of €20.6bn for Luxembourg.
"On average, households have at least the same, and often more, purchasing power than before the crisis.”
True. calculates an increase in expenditure of 8-9% between 2019 and 2022 for an increase in income of 9-10%. This is an average, even if "the average purchasing power of all quintiles is higher in 2022 and 2023 than in 2019", the statistics bureau specified. It takes into account, for the increase in income, in addition to indexations, the tax credit and the increase in the minimum wage, that of family allowances, the cost-of-living allowance, the rent subsidy, study grants and the energy bonus.
However, a calculation shows that this is not the case for everyone. A single person with a salary of €2,800 gross, who does not receive any additional support, has gone from €2,372 to €2,543 after taxes just after the indexation from the beginning of 2020 to September 2022, thanks to the two indexations of October 2021 and April 2022 and the energy tax credit. This represents an increase of 7.16% in purchasing power.
Annual inflation was 0.8% in 2020, 2.5% in 2021 and 6.43% in the first nine months of 2022. If this person's monthly budget was €1,500 per month, it has therefore risen to €1,649.5 in September 2022, if they have not adjusted their spending. This is an increase of 9.96%, which is greater than the increase in his or her income.
Companies
"The number of bankruptcies is approximately at the same level as in 2019."
True. It even decreased between 2019 (1,263 bankruptcies) and 2020 (1,199) and remained stable in 2021, according to the justice ministry’s figures. There was a decrease of 21.2% over the first nine months of 2022 (657 bankruptcies) compared to the same period in 2021.
"Last year, around 12,600 new businesses were set up. The number of authorisations applied for is not only higher than in 2019, but is even at a historically high level."
False: The SME directorate did receive 12,580 applications for establishment permits in 2021. A number not reached since 2015, the oldest data available on the
But an establishment permit does not necessarily mean the creation of a company. "A company can operate in different fields, for example painting and roofing work. It will therefore be necessary to have two establishment permits for the same company," explains the SME ministry.
For example, in 2019, the latest data available from Statec, there were only 3,704 business startups for 12,014 establishment permits. As these are the most recent figures, it is not yet possible to say whether the number of new businesses created has exceeded its pre-crisis level.
Mobility
"This year, 25% of new registrations were electric and plug-in hybrid cars."
False. In 2021, 20% of new registrations were electric (4,469) or plug-in hybrids (plug-in hybrids, 4,443). In the first half of 2022, this rose to 23.8%. This share decreases slightly if the months of July, August and September are added, to reach 23.4% of electrics and plug-in hybrids in the first nine months of the year. No matter how you calculate it, the 25% figure is overestimated.
"From next year onwards, the new self-propelled cars will finally be delivered, which will increase passenger capacity on trains by 43% by 2025."
True: "The only order in progress is for the Alstom Coradia Stream HC," explains the mobility ministry. 138 "boxes" whose deliveries are due to stretch to mid-2025. They will partly replace the Z2 railcars, but should allow a net increase of 43% in the number of seats in the CFL fleet.
The ministry specified that the “CFL has a flexible fleet management, so these railcars will be able to run on all lines, except to Germany, according to needs. One of the first objectives will be to progressively replace the Z2s in the Luxembourg-Diekirch trains, then on the branches (Wiltz, Dudelange).”
Does this mean that French cross-border workers, who use the trains of the TER Grand Est network, are not affected? No. "There are not only SNCF railcars on the Lorraine corridor line", the ministry stated. The ministry explained that from 2024, longer trains will be able to run on this line. They will go from six to eight or nine cars, i.e. an increase in capacity of 33 to 50%. This will be made possible by the delivery of rolling stock by CFL and SNCF, as well as by "the extension of the platforms to 250 metres for all stops in France between the border and Metz".
In a second phase, the commissioning of the new Luxembourg-Bettembourg line and infrastructure improvements in France will allow eight TER trains to run per hour from 2028, compared with six today. On this line, "we could therefore eventually double capacity if the entire programme is completed". However, the number of cross-border commuters is expected to have increased by then. The Luxembourg business federation (UEL) projects 288,000 from France in 2040, compared with 104,070 today.
"Almost 50% of the buses are electric. We will reach our goal of running entirely electric by 2030."
Partially correct, partially to be confirmed. The mobility ministry confirmed that this figure only concerns the 1,000 or so buses in the RGTR network. This does not include buses operated by the CFL, the AVL network of the City of Luxembourg or private companies.
Energy/climate
"By 2026, 10% of the annual electricity consumption in public buildings should be covered by their own photovoltaic installations.”
Unverifiable. Currently, 62 public buildings are equipped with solar panels, said Bettel. But do they cover 10% of their own consumption? The energy ministry referred us to the mobility ministry, which only replies that "each photovoltaic installation installed by the Administration of Public Buildings is designed to maximise electricity production".
It pointed out that the state has 1,600 public buildings.
"We have more than doubled the production of renewable energy in the last six years."
True, but that only refers to electrical energy produced from renewable sources--the production of which has even doubled in less than six years, according to figures from the Luxembourg Regulation Institute provided by the energy ministry. It has risen from 461 GWh in 2016 to 993 GWh in 2021.
"Since the summer, the new Grand Ducal regulation on sectoral climate targets has been in force. Overall, we reached our targets last year."
True, although .
"Luxembourg already invests about €1.1bn per year in its climate policy."
Unclear. The environment ministry referred us to the finance ministry, which referred us to the 2022-2025 multiannual programme. €125.2m spent by the Climate Fund in 2020 and €182.6m in 2021. €31.5m in 2020 and €41.1m in 2021 went to the Environmental Protection Fund. €451.1m in 2020 and €550.8m in 2021 were used by the Rail Fund, which is included in this calculation. This adds up to €607.8m in 2020 and €774.5m in 2021. Where are the more than €300m missing to reach €1.1bn? They are in “various other transfers or subsidies," the ministry said without further explanation.
"Since January of this year, each gram of CO2 emitted on state-run flights has been accounted for. As of 1 October, it was 860 tonnes of CO2. The budget for 2023 provides an appropriate sum with which these emissions will be retroactively offset."
True. The draft budget for 2023 does indeed provide for an amount of €50,000 to compensate for the CO2 emissions of government employees' service trips abroad by air in 2022. What will the offsets be? "The precise choice of projects will only be made at the beginning of 2023," explains the environment ministry. "The government plans to use, at least initially, projects outside Luxembourg that generate certified emission reductions in accordance with the provisions of the Paris Agreement. This will cover both emission reductions in the form of avoided emissions and in the form of greenhouse gases removed from the atmosphere through sequestration activities (forestry and land use projects)."
Health
"More than 83% of adults have a complete vaccination schedule."
True. However, this differs from the 79% of the vaccinated population announced in the various weekly reports. The prime minister is only taking into account people aged 18 and over, whereas vaccination is possible from the age of five.
Social
"In order to be able to help the weakest in our society even better in the future, the government will increase the staff of the social offices by 50%."
Unknown. In reality, it is up to the social offices to submit their requests to increase the number of posts in their offices from 1 January 2023. The 30 social offices in the country currently employ 106.73 full-time equivalent staff.
"The state continues to invest in the expansion and renovation of the infrastructure for the elderly, so that in the coming years about 3,000 additional beds will be available."
Unknown. Here too, the sharing, whether in public or private facilities, will be "at the request of the managers". In any case, this would be a significant increase, since the country has a total of 6,403 beds: 3,930 in integrated centres for the elderly (CIPA) and 2,473 in care homes.
This story was first published in French on . It has been translated and edited for Delano.