Luxembourg for Finance marked its 15th anniversary with praise for a job well done, and the realisation that the country’s financial sector faces serious competitive pressures.
Looking back at more recent times, , CEO of Luxembourg for Finance, in his formal remarks said that “the past 5 years have passed in a wink, yet so much has happened.” For example, 95 financial firms set up shop in the grand duchy in the wake of Brexit.
Mackel said that since Brexit he has detected a subtle shift in the conversation with international journalists and stakeholders. He no longer has to “explain what Luxembourg isn’t,” but “now can talk about what Luxembourg is.” That includes the grand duchy’s role as a sustainable finance hub.
Commenting on the spectre of deglobalisation of the economy, Mackel warned that “we will not reach the Paris [climate] goal if we deglobalise” the financial sector.
On the other hand, Luxembourg for Finance ran a promotional campaign 3 years ago to explain what the financial sector does to residents of the grand duchy, Mackel stated. “It’s a pity” that such awareness-building is needed in Luxembourg.
‘Tackling challenges’
, the finance minister (DP) and chair of Luxembourg for Finance, noted that the grand duchy is the 3rd most international financial centre, after the US and UK, and the world’s green bond capital. “Success not only breeds success,” she observed. “Success breeds competition.”
Authorities in Luxembourg “must act now to ensure the future growth of the finance centre,” Backes said. For instance, public and private players need to address the “talent attraction and retention” challenge that Luxembourg as well as rival financial centres are facing. “The government is tackling this very seriously,” she claimed, by working on immigration, housing and transport policies, among others.
Backes pointed to her current budget proposal, which includes expat tax and profit-sharing regimes. “For me, it’s a priority.” Another focus has been tax treatment for the country’s thousands of cross-border commuters. She has been speaking with the German finance minister Christian Lindner, for example, to increase the number of telework days for German residents to at least the same level as Belgian and French residents. In addition, the stock option regime needs to be updated, she said.
‘Keep country attractive’
In his comments, the prime minister, (DP), looked back at the Luxembourg government’s decision to abandon banking secrecy laws and sign on to European and global tax standards. “Imagine Luxembourg today without being compliant,” he told the audience of financial sector professionals. Today Luxembourg is “known for stability, knowledge and compliance,” he stated.
Referring to that reputation for stability and looking ahead to the forthcoming tripartite talks (between employers, trade unions and the government) on the cost-of-living crisis, Bettel said “we cannot tell people, life is getting more expensive but we don’t care.” That is why he wants to strike a fresh tripartite deal “now” and not just before parliamentary elections in October.
Alluding to the grand duchy’s national motto (Mir wëlle bleiwe wat mir sinn, we want to remain what we are), Bettel said, “we want to stay what we are, but don’t want to stay where we are. We want to move on... and keep the country attractive.”
“It’s easy to bash bankers, to bash the finance sector... that won’t happen with me,” Bettel said. Luxembourg was long a poor country, and one with an industrial heritage, so the financial sector “is a success story for the country.” Financial sector professionals and the private sector should be “proud about what you did”.
About 300 people attended the event, including and the economy minister (LSAP), as well as the UK ambassador and US ambassador .
Luxembourg for Finance is an economic development agency jointly backed by the state and private sector stakeholders.