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Luxembourg Public Policy

Current policy

The spirit of consensus and stability characterizes Luxembourg. The Christian Democrats have dominated politics for nearly a century and led most governments. However, after a recent election in 2013, a government formed of liberals, social democrats and environmentalists was formed. The three parties succeeded in retaining a majority in the 2018 elections, albeit with hardly a conceivable margin, and they continue to rule together.

The Christian Democratic Christian Social Party (CSV) became the largest party in the general elections in October 2018. But 31 of the 60 seats went to the three parties in the incumbent government: the Liberal Democratic Party, the Social Democratic LSAP and the Greens. Prime Minister Xavier Bettel, who belongs to the Liberals, was given the job of the Grand Duke to form a government. It took several rounds of talks before the three parties of the outgoing government agreed, but in early December Bettel swore in for a second term.

  • Countryaah: Country facts and history of Luxembourg, including state flag, location map, demographics, GDP data, currency code, and business statistics.

The new election five years earlier was announced after former Prime Minister Jean-Claude Juncker was forced to resign following a scandal (see Modern History). Despite the scandal, Junckers CSV became the biggest even though the party lost some mandates. The coalition partner of the departed government, LSAP, now instead formed government together with the liberals and the environmental party. It was the first time since the 1970s that the Christian Democrats were put alongside power.

Democratic Party leader Xavier Bettel became prime minister after the 2013 election. The then 40-year-old Bettel, formerly popular mayor of the capital, became the first openly gay head of government in Luxembourg. He saw that an important task was to try to reduce the deficit in the state budget and wanted to achieve this, among other things, by cutting government spending.

Public Policies of LuxembourgUnder the new government, liberalization of social policy already began. Same-sex marriage was approved and state funds for the Catholic Church declined, while other communities, including Muslim ones, also received some public funding for the first time.

In connection with an EU summit in 2014, Bettel announced that Luxembourg was willing to give up its cherished banking secrecy and accept the EU Savings Directive, which happened from the following year-end.

But the criticism of Luxembourg as something of a tax haven came to the surface again when the international journalism consortium ICIJ presented a report in autumn 2014 showing how the country has long facilitated tax planning for over 300 international companies. The unveiling came about at the same time as Juncker took on a new prestigious post: the one as President of the European Commission. Juncker himself caught the eye because tax planning took place during his time as head of government. Claims were raised that he would step down, but he managed by a good margin a vote of confidence in the European Parliament.

A comprehensive revision of the constitution has long been discussed. In 2015, the government let voters decide on three amendments that would be included in a new constitution, hoping to bring the opposition with them if the people showed strong support. However, the result was the opposite. A large majority of voters said in a referendum no to proposals on reduced voting age, voting rights for foreign nationals and a limitation to ten years for government ministers. It was a setback for the government, which however said it was planning a new referendum on the entire new constitution.

A political dispute issue has long been the system of automatic enumeration of wages and pensions, coupled with rising living costs, that prevails. Despite opposition from trade unions and the smaller LSAP government party, the CSV government decided in 2011 to limit the increases. The conflict arose with concern that the cherished spirit of consensus and the country's "social model" - where the social partners for discussions on social issues with the government - were about to break down. As a compromise due to continued disagreement, the recalculation of wages has been postponed several times so that the intervals between salary adjustments have become longer than before.

In March 2020, the corona pandemic led to widespread shutdowns of society. Germany closed its borders, causing protests in Luxembourg whose economy is highly dependent on border commuters. Only after two months the border was reopened.

See also Calendar.

FACTS - POLITICS

Official name

Grand Duchy of Luxembourg / Grand Duchy of Luxembourg / Grand Duchy of Luxembourg / Grand Duchy of Luxembourg

GOVERNMENT

monarchy, unitary state

Head of State

Grand Duke Henri (2000–)

Head of government

Prime Minister Xavier Bettel (2013–)

Most important parties with mandates in the last election

Christian Socialist Party 21, Democratic Party 12, Socialist Workers Party 10, Greens 9, Alternative Democratic Reform Party 4, Pirate Party 2, Left 2 (2018)

Main parties with mandates in the second most recent elections

Christian Socialist Party 23, Socialist Workers Party 13, Democratic Party 13, Greens 6, Alternative Democratic Reform Party 3, Left 2 (2013)

turnout

about 90% in the 2018 parliamentary elections

Upcoming elections

parliamentary elections 2023


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