Politics weekly: Energy aid, housing research, Cape Verde visit

Cape Verde’s president José Maria Pereira Neves (l.) pictured with prime minister Xavier Bettel during a visit to Luxembourg on 24 May 2023. Photo: SIP / Emmanuel Claude

Cape Verde’s president José Maria Pereira Neves (l.) pictured with prime minister Xavier Bettel during a visit to Luxembourg on 24 May 2023. Photo: SIP / Emmanuel Claude

The European Commission wants Luxembourg to wind down its energy subsidies and do more to support the housing market. Elsewhere, Luxembourg rolled out the red carpet for Cape Verde’s president and parliament deliberated stricter rules for the Film Fund and the Science Center.

Read up on these and other headlines from this week in Luxembourg politics in Delano’s roundup below.

What’s the big deal?

Luxembourg should spend less on energy subsidies, the European Commission said in recommendations issued to the country as part of the so-called spring semester, an evaluation of EU member state economies. There are numerous subsidy programmes for e-vehicles, solar panels and energy-friendly home renovations. But the country should start winding them down and use the money to reduce the government deficit, Brussels said.

At the same time, the commission urged the country to reduce its reliance on fossil fuels. It also said more should be done to support the housing market, such as increasing the supply of buildable land. Policymakers should address the sustainability of the pension system as well as improving the performance of the education system, for example by offering more language options.

From parliament

·      The Observatoire de l’Habitat, a housing sector monitoring body, would need more money and human resources to deliver additional data, housing minister Henri Kox (déi Gréng) said in answer to a parliamentary question.

Kox came under criticism earlier this year when, instead of answering a parliamentary question, he sent back a list of questions of his own about the housing market that he would like answers to.

The observatory’s budget has risen from €560,000 in 2018 to €760,000 today. It keeps data on land and housing prices but also studies reasons for the non-take-up of benefits.

·      A committee in parliament has issued a series of recommendations to reform Luxembourg’s Film Fund. A 2018 audit had found managements failings within the organisation, such as lax procedures and a lack of transparency in decision-making. The fund distributes state subsidies to film and TV productions. It had a budget of €40.5m for 2023.

The recommendations address a number of different areas from public calls for tender, governance and management, and avoiding conflicts of interest between the organisation and industry players.

·      The state is set to have greater oversight of the Science Center in Differdange. The state cancelled an agreement with the centre over management irregularities. Under plans drawn up for a new contract, two state representatives are due to sit on the centre’s board.

·      The foreign ministry is working on extending the validity of Luxembourg passports. Currently only valid for five years because of the lifespan of the chips used to store biometric data, a ten-year passport could be rolled out in 2025, foreign minister Jean Asselborn (LSAP) said in answer to a parliamentary question.

Tweet of the week

International relations

·      The president of Cape Verde, José Maria Neves, was on an official state visit to Luxembourg this week, together with his wife, Débora Katisa Carvalho. The pair met the grand duke, the prime minister and other officials, praising the relationship between both countries. Luxembourg is set to install a resident ambassador in the capital Praia, where the country has an embassy but the top diplomat, Conrad Bruch, is resident in Lisbon.

·      Luxembourg defence spending was in the spotlight at the Nato parliamentary assembly, which came to a close in Luxembourg on Monday. The grand duchy is working on increasing its military spending to 1% of GDP by 2028, well below a 2% target agreed by Nato allies in 2014. Despite international criticism, Luxembourg stuck by its argument that it cannot justify this kind of spending given the small size of its army and the high GDP per capita. A 2% of GDP target would mean defence spending of just under €2bn annually.

·      Luxembourg has joined a group of EU countries lobbying to abolish the unanimity principle in foreign policy matters. Hungary, for example, in March this year blocked a joint statement on the international arrest warrant issued against Russia’s Vladimir Putin. However, while Luxembourg wants more momentum on foreign policy, Asselborn speaking with Radio 100,7 would not support demands by France to abolish unanimity also on tax questions.