Hello, and thanks for joining us. Paperjam's editorial team will be on hand with updates from 2pm, when the prime minister begins his speech. Tomorrow, expect coverage of the reactions of the other political forces represented in the Chamber of Deputies.
3:35pm. End of the prime minister’s State of the Nation address and this live broadcast. Frieden concluded his speech by emphasising the country’s “values: peace, freedom, justice. These fundamental principles must not remain confined to history textbooks. They are values we must embody every day. Ideals we must tirelessly defend. Each generation must redefine these values. We all have different beliefs, perspectives and visions. But let us join forces, in the interest of the country and its citizens. It is this dialogue, this desire to overcome differences of opinion and work together, that makes our country strong. It is what distinguishes it internationally. This is what we call, quite simply, stability. This stability is the foundation of our progress. This is the conviction of this government: progress through stability. Stability through progress.”
3:25pm. Strengthen cross-border cooperation to combat crime and guarantee the right to asylum. The government will also introduce an automatic license plate recognition system. “Already in place in many European countries, this system will make it possible to more quickly identify wanted persons and bring them to justice,” explained the prime minister. “In this spirit, Luxembourg will continue to commit, at the European level, to the Schengen Area and the maintenance of open internal borders. The problem of illegal immigration can only be resolved at the European level: with strengthened controls at the external borders.”
“Luxembourg cannot be accused of a lack of humanity. Our country already hosts--in proportion to its population--one of the largest numbers of refugees in Europe. But our structures are also reaching their limits. Even if other structures are planned, we need a responsible migration policy, with a clear, fair and objective framework.”
3:20pm. Housing. Whilst the topic was addressed in ten points last year, this time this major theme of the country is summed up in a few sentences from Frieden: “To build the necessary housing, we had to, initially, contain the crisis affecting the construction sector. We succeeded thanks to short-time working and targeted tax measures. Today, this crisis is behind us. The role of the state is not to indefinitely support the housing market. The market must be self-sufficient. This is why the state will allow the temporary tax measure to expire, without extension. The tax credit on notarial deeds (Bëllegen Akt) for home ownership, amounting to €40,000, will be maintained. We are committed to building more housing, and more quickly.”
With this in mind, reforms aimed at restoring the balance between housing needs and environmental protection were presented to parliament in January--such as the principle of “Natur auf Zeit” and the “once-and-for-all compensation.” Other important measures, such as the second phase of “silence means consent,” the building regulation, and the simplification of procedures for general development plans (PAG) and special development plans (PAP) will be presented in the coming months. The government will also present its proposals for the mobilisation tax on undeveloped land in building zones by the summer.
3:10pm. Focus on pensions. The prime minister begins this highly anticipated chapter by stating: “The pension system is a valuable social achievement, the retirement system is a promise, the retirement system is old-age insurance. It is not uncommon today for the length of retirement to be almost equivalent to the number of years of contributions. It is clear that this situation is no longer sustainable. This is why we will gradually increase the number of years of contribution. The career required to qualify for a pension will be gradually extended by three months per year over several years. Unlike our neighbours, the legal retirement age will remain set at 65.”
3:02pm. Social dialogue and Sunday working are discussed. Often attacked by private and public sector unions on the subject, Frieden denies that he governs “alone; we favour exchange. The ability to express different opinions, without fear of repression, is one of the essential foundations that distinguish a democracy from a dictatorship. It is in this spirit that we remain attentive to the unions and civil society regarding the right to assemble.”
The . The prime minister responded: “Sunday will remain a Sunday and will not become an ordinary working day. It will remain dedicated to family life and social, cultural, or sporting activities. At the same time, today it is already possible to eat in a restaurant, shop at the supermarket, or take the bus on a Sunday. We are proposing nothing more or less than granting greater flexibility to businesses that are already authorised to open on Sundays. Instead of limiting work to four hours, it will be allowed to work up to eight. This will be allowed, not imposed. People working in this specific sector will be granted a 70% supplement.”
2:55pm. A modern social policy. “The state does not have to impose a family model. Every couple, every family must be able to make their own choices freely. Regarding the tax system, the government is committed to proposing a single tax class. With individualisation, each family model will be treated and taxed in the same way. This is, above all, a question of fairness. The preparatory work for these reforms is progressing well, which will allow the finance minister to present various options to the chamber and the social partners as early as July. One of the options under consideration could be a new tax scale, similar to the current 1A tax class, accompanied by an extended transitional phase for married or civil partnership taxpayers, so that they are not disadvantaged.”
2:50pm. Three billion euros invested in new technologies. “If we don’t have our own data and new technology solutions, we will remain dependent on other countries,” says Frieden. “We want to make Luxembourg a place as renowned for its financial expertise as for its digital knowhow. A vision of Luxembourg as an international centre for the secure and sovereign exploitation of sensitive data from across Europe. An agile centre, placing people at the heart of progress and attracting data and talent from around the world. To achieve this goal, we are investing in the necessary infrastructure, talent and projects. Over the next six years, €3bn, from both public and private stakeholders, will be mobilised for this purpose.” This ecosystem will be complemented, in the coming months, by the creation of a “Deep Tech Lab” and an “AI Academy” within the Digital Learning Hub starting in 2026, with specific training in the field of artificial intelligence.
2:40pm. 50 measures for sustainable energy. Half of them will already be in the legislative process by the end of the year. “Discussions with the sector have highlighted a number of divergences in the interpretation of technical regulations. These divergences have been resolved ‘by the fast track administrative route,’ in accordance with Luxembourg tradition. Procedures will be systematically simplified, accelerated and digitalised to allow for faster project completion. This involves the introduction of trivial limits, for which either no authorisation will be required, or a simple notification will suffice. In general, deadlines will be reduced--or introduced where no time frame currently exists. Furthermore, the justice minister is working on establishing an accelerated procedure for appeals concerning large-scale projects. The culture minister, for his part, intends to simplify the procedures for installing photovoltaic panels on protected buildings, while respecting their architectural identity. In future acceleration zones, applications will have to be processed in less than a year.”
“Accelerating existing projects remains a priority. In the field of photovoltaics, we see immense potential along our motorway network. According to an independent study, up to 1,500 megawatts could be produced there. Even if we take advantage only a portion of this potential, we could generate clean energy for tens of thousands of homes. With this in mind, several concrete projects will be launched in the coming months, notably on noise barriers and at the Junglinster ‘Park & Ride’ parking lot. Furthermore, the government will introduce a bill to authorise the installation of photovoltaic panels in the non-aedificandi [non-constructible] zone, i.e., within 25 meters behind the motorway safety zone.”
2:35pm. Agriculture, industry, government priorities. The prime minister referred to the trade agreement with Mercosur countries, on the one hand, and the energy crises, on the other. “We need sustainable solutions to ensure affordable energy prices and actively encourage the transition to electrification. This is why the state has decided to mobilise €150m--a sum that will directly benefit citizens and businesses.”
2:30pm. Luxembourg’s first Earth observation satellite will be launched this summer. “Luxembourg has solid expertise and a recognised reputation, particularly in the field of satellites. In this sector, the state collaborates closely with SES. Every day, our allies use satellite communication capabilities based on Luxembourg’s expertise, such as the Govsat-1 satellite and medium-earth global services. It is with this in mind that the government has decided to launch a second communications satellite for military use. Actively supported by the government, SES also plays a . In this capacity, 290 new satellites will guarantee highly secure communications for the whole of Europe, for both military and civilian purposes.” With Luxembourg’s first Earth observation satellite, the country and its allies will be able to receive the first images for military use by the end of the year.
2:25pm. Frieden’s message is not to pit priorities against each other. “This financial effort cannot be made at the expense of our social policy. The challenges posed by the security issue are added to others; they do not erase them. Financing the increase in defence spending will come from three sources: first, through the budget itself, notably through a ‘defence bond,’ that is, a public loan dedicated to security, to which private investors can contribute. Second, through a redefinition of spending priorities [and] third, through the mobilisation of extra-budgetary financial resources, notably through a national fund at the SNCI, intended to finance activities that can serve both military and civilian purposes. We must be ready to invest in peace.”
2:20pm. Defence. “A year ago, I announced here our desire to achieve the goal set by the previous coalition, to invest 2% of our national wealth in security, by 2030. The complex international situation--marked by the war in Ukraine, the evolution of American policy and the choices of our allies--leaves no doubt: we must achieve this sooner than expected. That is why, after consultation with all parties, we have decided not to wait until 2030 to achieve the 2% defence goal set by Nato, but to achieve this goal by the end of this year. I also had a discussion yesterday with the Nato secretary general to inform him of this decision. The defence minister [ (DP), editor’s note] will also inform the relevant parliamentary committee of the capabilities in which we will invest over the coming years.”
2:15pm. Housing, which was discussed in ten points during the 2024 State of the Nation address, is of course one of the key topics of the 2025 address. “We promised a new boost for housing. Thanks to short-time working, targeted tax measures, and a half-billion-euro public program for the purchase of off-plan homes, we have stemmed the crisis in the construction sector. We have pursued a coherent policy in favour of construction, investment, purchase and rental--without putting a brake on it. As a result, a market recovery is beginning to clearly emerge. Transactions for existing homes have doubled over the past year. For new homes, they have even quadrupled. Mortgages are also on the rise,” he said.
2:10pm. “We have set ourselves ambitious goals [and] this government is keeping its promises,” asserts Frieden. A tax burden halved for low-income single parents or widows, income-based tax relief, a higher minimum wage, a higher cost-of-living allowance, expanded housing benefits, a tripled energy bonus... The prime minister continues his Prévert-style inventory of last year. “This is a policy of social justice. It has nothing to do with the cold politics that some sometimes--wrongly--accuse the government of,” he defends himself.
2:02pm. Prime minister (CSV) starts his address. “The impression that progress can be achieved effortlessly is an illusion,” he begins. “We risk remaining in expectation of a better world, instead of shaping it. Progress is never a given, and nothing achieved is irreversible. We must work tirelessly for it. More than ever, this commitment is essential. We are going through a pivotal moment in the history of our country and our continent. The world is changing at an unprecedented pace and scale, whether geopolitically, socially, technologically, or ecologically.”
2pm. Pensions and social security. Faced with an imminent imbalance in the system, the government is embarking on pension reform. By 2026, contributions will no longer cover expenses, and the reserve will be exhausted by 2045, according to official projections. Health and social security minister (CSV) promises an “at least partial” bill , banking on a gradual retirement through the combination of employment and pensions. But major decisions--legal retirement age, contributions, benefits--remain on hold pending the outcome of ongoing consultations.
The OECD is urging the government to act “quickly and decisively,” and a reduction in benefits, which would involve ending the indexation of pensions to wages and capping the replacement rate, which currently stands at 75% for a full career. Meanwhile, the parliamentary debate has revealed clear fault lines, with the parties entrenched in their ideological positions. Frieden may use his State of the Nation address to further clarify the government’s intentions.
1:50pm. Artificial intelligence. Faced with productivity that has stagnated for over a decade, the government is banking on artificial intelligence to boost competitiveness. A national roadmap was adopted in April, with priorities including the development of digital skills, the digitisation of public services, and the acceleration of business transformation and appropriate infrastructure. Luxembourg is participating in the EU’s EuroHPC initiative and will acquire a supercomputer dedicated to AI. The to support businesses. Whilst AI adoption is progressing, it remains very uneven depending on company size and sector. The prime minister is expected to reaffirm his commitment to permanently anchoring the country in Europe’s AI ecosystem.
1:40pm. Security. The government wants to strengthen security through more personnel, greater proximity, and more prevention. The , aims to fill a legal vacuum by giving the police greater means of intervention in the event of public order disturbances. The is part of this desire for proximity. The fight against drug trafficking requires an adaptation of legislative and technical tools, with automated license plate surveillance and a revision of the Penal Code in sight.
Against the backdrop of the migration debate, the government is championing a “firm and responsible” asylum policy. During his first State of the Nation address, the prime minister explained that "peaceful coexistence and social cohesion also include security.” Frieden is expected to reiterate these security priorities as a pillar of his governance.
1:30pm. Triple A. From the very beginning of the coalition negotiations, Frieden had set a red line: to preserve Luxembourg’s triple-A rating. This has been achieved. . The rating agency stated that the Luxembourg economy had returned to growth in 2024, the budget surplus had exceeded expectations and tax revenues remained buoyant despite an uncertain geopolitical context.
1:20pm. Taxation. The government has introduced a number of measures to support purchasing power: adjustments to the scale, exemptions for low wages, tax credits for overtime and a reduction in corporate tax. At the same time, a budget reform inspired by OECD recommendations is underway, with the aim of achieving objective-based management and greater efficiency in public spending. The promise of a single tax class remains scheduled for 2026, while property tax reform is still pending. Frieden is expected to outline the tax agenda in his speech.
1:10pm. Housing: one year after making housing a national priority, Frieden must acknowledge that the recovery remains timid. While existing property transactions are picking up, the new-build market is lagging behind, with a construction sector suffering: 2,000 jobs lost and bankruptcies on the rise. The government has extended several aid programs, beefed up its public procurement program for off-plan projects (980 housing units planned), and injected a budgetary supplement of €480m. But the recovery remains fragile, hampered by a lack of land and slow procedures.
In response, several administrative simplification measures have been adopted or are currently being tabled, including:
- the “silence means consent” principle;
- the revision of article 29A to stimulate affordable housing;
- the digitalisation of planning procedures (general development plans, or PAG, and special development plans, or PAP).
Another sensitive issue: the taxation of undeveloped land, which remains on hold despite the promise of a new text. At the same time, the ministerial land consolidation project is moving forward to unblock certain projects. Meanwhile, the reform of rental leases is progressing slowly, with no decision yet on a possible rent cap. The head of government is expected to return to these sensitive issues in his speech.
1pm. Among the measures announced but not yet put into practice are the adoption of a national plan to prevent and combat poverty--for which the ministry of family affairs, solidarity, living together and reception of refugees is responsible--as well as the universal healthcare coverage project meant to be discussed last autumn, but which was dropped in favour of a possible reform of the pension system. This reform was something Frieden outlined at the time while calling for debate. “Many people have been retired for almost as long as they have paid contributions,” he said at the time. “Our system is healthy today, but it also needs to be protected for future generations. The system therefore needs to be discussed as a whole, also taking into account our demographic and economic development.” After the announcement made in March by social security minister Martine Deprez (CSV) that before the summer on the organisation of the transition from working to retired life, Frieden is expected to say more. He is also expected to give an update on the plan to combat poverty. On 14 May, the floor will be given to members of parliament, who will react to the various announcements. The ministers will then take over to translate the prime minister’s commitments into draft legislation.
1pm. (CSV) has taken advantage of the occasion to deliver a huge number of figures, whilst (DP) has set out the broad guidelines. Last year, Frieden mixed concrete announcements with targets. At the time, he announced a reduction in the rate of corporation tax and the neutralisation of 2.5 additional index brackets in the tax scale--measures that came into force this past 1 January--the allocation of a budget of €2.5bn to implement the national energy and climate plan (PNEC) and the maintenance of the cap on electricity prices for certain households. He also for his ministers in the areas of administrative simplification, housing, energy transition and social issues. The very next day, the ministers concerned to discuss the details and timetables for implementing the measures announced. Paperjam has been following these timetables in its .
1pm. This is the major political event of the week in Luxembourg: the State of the Nation Address. It is an opportunity for the prime minister to take stock of his government’s progress and, above all, to set the priorities for the coming months. The speech has been eagerly anticipated by MPs and members of the government alike. For some weeks now, ministerial communication has been on hold, with Frieden reserving priority for major announcements. The prime minister is “a very active captain,” one year after taking office.
This article from French.