After the immediate reactions came the documented reactions. In a long document published by the Fédération des industries du Luxembourg (Fedil), the business federation has analysed each of the measures in the coalition agreement that concern it.

“The government’s intentions have not yet been clearly formulated on a whole series of subjects. By announcing discussions, studies or analyses, the coalition members are still leaving us in the dark as to the final direction they will take on these subjects,” says Fedil. “But what we can already say is that the two parties have identified the right areas, areas that require new action or reorientation. It remains to be hoped that the discussions, studies and analyses will lead to the right conclusions that will enable the country to progress and prosper by strengthening its economy and the businesses that create wealth within it.”

“We see two areas where the new coalition has no room for error. First, housing, a real societal problem which partly explains our labour shortage and which has, in the meantime, turned into a sectoral crisis for construction companies and related activities. Then there is the issue of administrative simplification, aimed at reducing the administrative burden and speeding up procedures. Our productivity suffers from an inflation of texts, rules and procedures that stifle our businesses. The scourge is both national and European. We need to tackle it on both fronts,” the press release goes on to say.

Economic development and diversification

- “The promotion of new technologies and their integration into industry are of crucial importance in this productivity-focused policy. It is vital to ensure that technological advances are not hampered by an excessive increase in burdens linked to new compliance and reporting obligations,” says Fedil. “It is imperative that the Net Zero Industry Act is rapidly implemented in Luxembourg in line with the new government principle of a 1:1 application of the NZIA provisions.”

- Between the lines, Fedil regrets that the high committee for industry no longer appears in the government’s plans, and welcomes the “Comptabiliteitscheik,” developments in healthtech and the quest for excellence in the space sector.

- It encourages the development of modern business parks and calls for a reform of the 2017 law, which hinders the ambitions of local authorities. It also advocates the creation of a technology park near Belval.

- In terms of investment aid, Fedil advocates for “adapting/modernising the services and instruments of the SNCI (Société nationale de crédit et d'investissement)” and announces that it will make proposals to the government along these lines. At the European level, for example, it proposes a significant increase in the thresholds defining SMEs and the introduction of an intermediate category, the “mid-cap.”

Labour and employment

- A major issue for the new government, making labour relations more flexible is a positive point, says Fedil, which is also in favour of “any administrative simplification linked to the notification of overtime and Sunday working hours.” However, it seems reticent about the possible extension of parental leave suggested by the government, as well as the introduction of part-time family working, which could “exacerbate the organisational difficulties of companies. We believe that the right to family part-time working should never be an absolute right for employees.”

- As far as social dialogue is concerned, Fedil is generally in favour of the annualisation of working time, but believes that “priority should be given to discussions between the employer and the staff delegation,” without which this modernisation would lead to failure.

- On the subject of labour costs , and more specifically wage indexation, Fedil points to the impact on staff costs that can affect the competitiveness of companies and the employability of individuals.

- Fedil welcomes the talent attraction-retention strategy unveiled in the coalition agreement, but hopes that the forthcoming review of the law on secondment will take account of the concerns of companies in the sector. It points out that “the problem of exceeding the 25% rate (substantial activity in the country of residence) is one of the major concerns for Luxembourg and European companies.”

- While Fedil has already sounded the alarm about the rising rate of absenteeism in the workplace, it says it is waiting “for real measures to be initiated.”

- And because many issues are linked to housing, Fedil is convinced that substantial progress on the problematic housing front would make it possible to significantly remedy the difficulties of attracting and retaining talent for the benefit of the Luxembourg economy.

Digital and digitisation

- While Fedil welcomes the new government's intention to encourage digitalisation efforts in companies through subsidies or other aid, it hopes that procedures will remain simple and rapid, particularly those relating to tax subsidies.

- In terms of digitising administrative procedures for businesses, the analysis points to a flagship project that needs to be implemented quickly: the digitisation of the “eCommodo” operating permit procedure. Generally speaking, the federation believes that administrative procedures should be 100% digital and that the “Once Only” principle should be standardised for greater efficiency.

- With regard to the development of ICT infrastructure, Fedil advocates continued investment, but with simplified procedures and coordination of the players involved.

- “AI and the data economy have become crucial areas,” stresses the Fedil, for whom it is “essential to maintain a balance between technological innovation and the protection of individual rights.” It advocates the introduction of “regulatory sandboxes” to enable players to appropriate the technology, and also believes that the government should increase support measures for companies wishing to invest in AI or recruit experts.

- With the deployment of new technologies comes the need for solid cybersecurity, and Fedil hopes that better public/private collaboration will be put in place to reduce risks and better anticipate threats. It is calling for national regulations for businesses to transpose the NIS 2.0 directive.

- Fedil fears that Europe’s planned obligations in the digital field will increase the administrative burden on businesses and generate additional costs. In this respect, it believes “that Alia (Luxembourg's independent audiovisual authority) would be better placed than the competition authority to coordinate digital services.” Finally, it sees the obligations of the Digital Services Act as “an opportunity.”

Research and innovation

- With regard to aid to support research and development, Fedil recommends using “the full room for manoeuvre left by the European Commission.”

- In its view, there is still a lack of a genuine policy for joint exploitation that includes criteria for measuring impact. “The government will have to address the issue of sharing intellectual property rights as part of collaborative innovation projects, and it will have to propose standard contracts and guidelines,” says Fedil. From a tax point of view, it advocates the introduction of an “IP box,” an intellectual property regime that would encourage companies to stay in Luxembourg and invest in knowledge capital.

Energy and climate

- In terms of decarbonisation, Fedil sees the National Energy and Climate Plan (PNEC) as a compendium of measures that are still relatively conceptual or too generic. But it wants to continue to position itself as a credible partner, and believes that the scope of the voluntary agreement needs to be “adapted beyond energy efficiency” so that it provides sufficient incentive. Again with a view to simplification, it “suggests bringing together the various energy-related taxes and levies into a single scheme.”

- With this in mind, Fedil believes that reducing the CO2 tax on gas would be an attractive introduction for businesses. It intends to reiterate its call for a progressive tax. The development of hydrogen production and supply capacity is also a major challenge, according to the industry’s spokesperson, to help ensure the viability of the most energy-intensive businesses.

- Rather than reinforcing the electricity networks to Germany, at the risk of increasing dependence on a single country, Fedil recommends evaluating connections to more exporting countries.

- “The competitiveness of industrial companies and the success of their decarbonisation efforts will largely depend on access to renewable energy sources and low-carbon fuels at affordable prices,” says Fedil, which is encouraging the acceleration of authorisation procedures for wind farm projects and the assessment of their potential in business parks.

- Fedil refers to the need to “make attractive credit available to businesses” and to allow tax deductions for investments in the energy transition. It also believes that there is a need to “review the pricing models for network charges, which hamper the competitiveness of industrial consumers.”

Environment

- “Fedil is pleased to note that its request concerning landfill sites for inert waste has been taken on board by the government,” but believes that an initiative to deal with the disposal of sewage sludge needs to be developed. “It is imperative that Luxembourg refrains from taking unilateral measures in the area of packaging, as has been the case in the past.”

- With regard to environmental authorisations, Fedil welcomes the innovation presented by the Nature auf Zeit concept, and felt that it should also apply to business parks and not just conurbations. Based on feedback from the field, it points out that “the intervention of the CGDIS in the authorisation process is beginning to create problems" and recommends better supervision.

International trade and the internal market

- While the internal market is essential to the Luxembourg economy, “excessively restrictive rules on secondment to our country are hampering the provision of services to our economic agents and making Luxembourg a bad pupil in this area,” says Fedil, which is encouraging the government to rectify the situation.

- With regard to economic promotion, Fedil hopes that “the reorganisation of tasks within the new government will ensure a good flow of information to best position the strengths of our economy” and recalls the importance of the Luxembourg Export Credit Agency (Office du Ducroire) in supporting exporters, at a time when insecurity on international markets is becoming more significant.

This article was first published in French on . It has been translated and edited for Delano.