When Simon Gray arrived in Luxembourg in 1981 on a busking tour of Europe, little did he realise he would become one of the most trusted and authoritative journalists in the grand duchy. But when he came across the nascent “Luxembourg News Digest”--a weekly publication launched by Luxembourgers--he soon landed a job as its editor and never looked back. His career since has led Gray to edit the now defunct “Luxemburg Business” and write for a number of international publications, including the Financial Times. He has made his home in Castries in southern France, but is still a regular visitor to the grand duchy and keeps up to date with financial and political issues as head of editorial for Luxembourg-based curated news and content provider VitalBriefing.

In the Delano Live Chat with editor-in-chief Duncan Roberts, Gray talked about the current state of Luxembourg politics and provided context to the current political landscape thanks to his years of experience covering the grand duchy.

International perspective

He pointed to the way that Luxembourg cornered a wealth of talent and expertise, and attracted international companies, in the funds sector by speedily transposing the first Ucits directive--“one of the crucial moments” in the diversification of the economy, he says now. “The government took pains to rush the directive into law, faster than any EU country.”

Indeed, Gray thinks that the “outward looking character of the country” has allowed Luxembourg and its politicians to seize opportunities over the years and gain footholds in the satellite sector through SES and now the space sector, fintech and biomedicine. “At that point [before the University of Luxembourg was founded], everybody had to go to university outside the country…so it encouraged an international perspective.”

That period was dominated by the CSV under the successive premierships of Pierre Werner, Jacques Santer and Jean-Claude Juncker. But now the CSV has been in opposition for six years and faces an uphill struggle to win back voters by the next election.

Compromise

Not that the current coalition is having an easy ride. The government parties, especially the LSAP and Déi Gréng, have had to compromise and sometimes water down their traditional political stance. Gray said that this has always been the case with the leading lights of the LSAP, citing former deputy prime minister Jacques Poos (who had previously worked in banking) as an example. “They’re not fully trusted by their base. They are regarded as having made compromises. Or maybe they were never terribly good socialists in the first place.”

The Greens are finding it hard to retain their identity “at a time when everybody is trying to demonstrate their green credentials,” says Gray. But strong performances at the last two elections show there is quite a bit of confidence “They have convinced people that they can uphold their principles as well as they can…and have proved solid members of government. They don’t look like long-haired extremists.”

Pandemic

Policy issues tackled during the chat included the housing challenge. Attempts by the government to encourage land owners to free up building plots face difficulty, says Gray. “Can you provide sufficient incentives compared with rising housing prices of up to 10% a year?”. Gray thinks the government performed well, with a few caveats, in tackling the covid-19 pandemic and its impact on the economy. “I think they’ve taken the necessary decisions decisively, and they recognized the need to take quick action to stabilise the economy.” And they had the resources to do so.

Indeed, even though there are currently no “stand out figures who had a reputation well beyond Luxembourg, like Werner and, after him, Juncker”, Gray thinks the current batch of politicians are “a group of sound people with sound judgement who have already been put to the test in the last six months and have not been found wanting.”

Watch the replay here:

Next Delano Live Chat:

“Why ‘green’ and ‘good’ funds are growing”: Denise Voss, chair of Luxflag, and former chair of Alfi, will talk with Aaron Grunwald. She will demystify “ESG”, discuss the new EU sustainable finance taxonomy, and explain why the sector is becoming increasingly important to the Luxembourg fund industry. Wednesday 23 September at 12noon

For more events, visit paperjam.club.