The energy crisis is becoming unbearable for crafts and small businesses. Closures are multiplying: the well-known that made the headlines in Belgium and whose bill exploded by 500%, announced that it could not keep its doors open.
Will Luxembourg be spared this fate? With only announced this week, Luc Meyer is being immediately called upon to defend the interests of small traders and craftsmen. Especially since the energy price cap provided for in the tripartite agreement could de facto exclude some of them.
In Belgium and France, several craft businesses have decided to close after seeing their energy bills multiply by 10. Is there a risk that craftsmen will take the same decision in Luxembourg?
Luc Meyer: Yes, there is a risk of craftsmen closing down. And this may happen in the next few weeks. I know the situation in Belgium with colleagues who have already been forced to close. In the case of the Dumont bakery in Vencimont (in Belgium), which I know well, the electricity bill went from €1,300 at the beginning of 2021 to €1,800 in January 2022, with a regularisation estimated in September at €46,000 and monthly instalments readjusted to €11,800. To cope with this, the baker in question has made his calculations: the price of bread should be €16.80 . At the market price, this is impossible to maintain.
Do Luxembourg's craft businesses have sufficient resources to cope with the rising energy prices?
The margins, if there are any left, are minimal. In the craft industry, a company that functions well has a margin of between 1 and 3%. If this company is affected by the rise in energy prices, raw material prices and wages through index effects, the margin disappears. The energy cap in the tripartite agreement is not for companies. But energy prices have been rising since September 2021. Prices that have been exacerbated by the outbreak of war in Ukraine. It's been a year since prices have been rising and you have to wonder why the government didn't help businesses earlier. Small companies that don't have the volume to enter into a 3-4 year contract with an energy supplier, so they buy energy at the price of the day, multiplied by 5 and 7.
It's a compromise, you can't come out of it happy on all counts.
In that case, what are the solutions to help craftsmen?
The government is negotiating at the European level to find solutions to curb this explosion in energy prices. There are also negotiations with companies that have bought large volumes of energy over several years, but have not consumed it all. Other companies should be able to buy back this volume of unconsumed energy at reasonable prices. This is being negotiated and is well under way.
You don’t seem particularly happy with this tripartite agreement which maintains the next index...
In the craft industry, we need the workforce. You can't replace everything with machines and robots, and that's fine. In our budgets, the wage factor is much more important than in industry, for example. In this period of crisis, this tripartite was the right thing to do. It's a compromise, we can't come out of it happy on all points. We must not forget that the worst case scenario was to have five salary increases and not to receive any energy aid, even if this last point has to be given the green light by the European Union.
In times of crisis, I believe that we should not be embarrassed or ashamed to question certain things and to make an in-depth analysis.
With this new crisis, the attractiveness of the craft industry will once again be dented and some young people will perhaps turn their backs on a career in this sector...
Unfortunately, the image of the craft industry is much worse than it actually is. In the past, you had to work a huge number of hours to earn very little. Nowadays, it has to be said that you work 40 hours, as elsewhere, and earn decent wages. As long as you put a lot of effort into your work, I don't know any boss who is not prepared to pay a good salary! Now, and this is just as unfortunate, young people may see more guarantees of a salary and contract in working for the state or the municipalities. But we must ask ourselves whether we can keep the Luxembourg economic and social model in the years to come. This model only works if there is a growth rate of 2.5% per year. This is not the case today.
So the current model cannot continue. Perhaps we need to question everything and analyse our model structurally and what we are capable of offering. I am thinking, for example, of pensions. We have been aware for years that our system is doomed to fail, but no one is taking the matter in hand. In times of crisis, I believe that we should not be embarrassed or ashamed to question certain things and to make an in-depth analysis. This doesn't mean that we have to deconstruct everything, but structurally, there are improvements to be made to the Luxembourg economic model.”
This story was first published in French on . It has been translated and edited for Delano.