The self-employed, who account for 30,000 taxpayers, are two times more likely to fall into poverty than salaried workers, according to the chamber.

Speaking at a press conference on Tuesday, Carlo Thelen said that it was essential to limit the effects of the crisis on this group, many of which are active in the worst-impacted sectors of food and beverages, tourism, events and culture. Thelen said failure to do so would send the wrong message to people wanting to start a company in Luxembourg in the future.

“They pay social security twice but they have no compensation in the event of unemployment. There was some aid, it should not be stopped abruptly. It should be phased out progressively,” Thelen said, adding: “If we see how much self-employed people are suffering, there's a risk young people will say if it's like that, I won't start such a venture. We are convinced that after this crisis there will be good opportunities for young people to create companies or become self-employed. We have to help get them through this crisis.”

Align to EU state aid threshold

Thelen added that the Luxembourg government must lower its threshold for companies to access government aid. Currently, the state offers aid to businesses whose turnover fell by at least 40% from 1 March 2020 to 30 June 2021, while the European regime is more inclusive covering businesses recording a 30% decline. “In the next regime we should adjust this threshold and apply the European margin,” Thelen said.

Forecast

In the worst-case scenario, Statec forecast a -4.5% drop in GDP in 2020, and in the best -3.5%. The unemployment rate was expected to be between 6.4% and 6.5%.

There remains uncertainty about how these indicators will evolve in 2021, since much depends on the virus’ evolution, vaccination distribution and public confidence.

During the press conference, chamber head of economic affairs Christel Chatelain said that the Luxembourg economy in 2021 could see a GDP of -0.5% in the worst case and 4% in the best. Unemployment could, meanwhile, rise to between 6.8% and 7.7%.

Employer survey

Based on the September edition of the bi-annual survey of chamber members, the cost of wages (52%) was the main preoccupation, overtaking the lack of qualified staff (48%) for the first time in years. The third main concern was paying off debts that incurred as a result of the pandemic (42%). Almost two thirds of respondents said they intended to maintain jobs and over half said they would continue to make investments. However, Chatelain pointed out the survey was conducted before the second partial lockdown in December.