Mix of confidence and scepticism in face of economic crisis

The social partners and the government are currently negotiating within the framework of the tripartite committee in order to reach an agreement about which nothing is yet known. While certain actors are optimistic, since the country is in a better economic position than others, other actors are growing more anxious. Trade unions point to the job-loss figures and fear that redundancy programmes will multiply. However, the authorities and economic analysts remain confident.

Several debates have taken place since the start of 2009, bringing together government representatives and actors from the economic world. During these debates, the Minister for the Economy and Foreign Trade, Jeannot Krecké, has acknowledged that while job losses have not been overly significant in Luxembourg, this does not mean that the economic crisis does not pose challenges for the country. The Minister for the Treasury and Budget, Luc Frieden, has reiterated his confidence in Luxembourg’s ability to withstand the crisis better than other countries, due to its small size and ability to adapt to change, its high degree of social cohesion and its effective tripartite cooperation. Certain analysts even feel that the current crisis represents a real opportunity for Luxembourg. Without ignoring the difficulties to be faced, a clear-sighted analysis of the current situation does not result only in pessimistic forecasts, at least for the financial services sector. The Luxembourg Chamber of Commerce (Chambre de Commerce Luxembourg, CDC) considers that the fundamentals of the Luxembourg economy are healthy. This is confirmed in particular by the sustained growth in employment, and a level of public debt which is among the lowest in Europe. In addition, both the great majority of Luxembourg companies and the financial services sector are well managed and have solid foundations.

Financial services sector

However, not everyone shares this optimism. The Luxembourg Association of Bank and Insurance Employees (Association Luxembourgeoise des Employés de Banque et Assurance, ALEBA) has looked at the employment situation in the financial services sector in Luxembourg. According to the trade union, 438 people have lost their jobs in recent months. The financial services sector is the main driving force of the Luxembourg economy, which employed 27,269 people in September 2008. But, for 2009, ALEBA remains cautious about developments in the sector. No fewer than 15 financial institutions have already laid off workers, in three cases due to the definitive closure of their operations in Luxembourg. Other financial institutions have benefited from state support, which has enabled them to avoid taking such drastic measures. In the majority of cases, the trade unions have succeeded in negotiating a redundancy programme. In other cases, no solution has been found.

In addition, the circumstances of the 104 Landsbanki Luxembourg employees has provoked anger among members of the main trade union in the sector. The Luxembourg Commercial Court had announced the dissolution and liquidation of the bank and a redundancy programme was supposed to be drawn up. However, a few days later, the liquidators told the bank’s personnel that the bank would not be put into liquidation but would go bankrupt. Under these conditions, employment contracts were automatically terminated. ALEBA found this approach unacceptable and has asked the government to take a position on the case.


In Luxembourg, like in other countries, the automotive sector has felt the consequences of the economic crisis. The President of the Association of Luxembourgish Automotive Suppliers (Industrie Luxembourgeoise des Equipementiers de l’Automobile, ILEA), Paul Schockmel, acknowledged in a press release that ‘all companies are or will be affected in one way or another. Many parts manufacturers have reduced their production by now’.

Eight of the 29 parts manufacturers in the country have already asked for partial unemployment programmes to be set up. Mr Schockmel stated that these are preventive measures, and believes that ‘Luxembourg parts manufacturers are in general well positioned to cope in a difficult environment’. Looking at the larger picture, there is certainly a crisis in the industry, but in the Grand Duchy of Luxembourg parts manufacturers have the resources to rise above it. The businesses present in the country are often focused on innovative products. Moreover, while they wait for better economic times to come, companies are counting on being able to use ‘the job retention instruments offered by Luxembourg legislation’.

Transport sector

Other economic sectors are also asking for access to these instruments. The haulage section of the Luxembourg Trade Confederation (Confédération Luxembourgeoise du Commerce, CLC) which describes itself as ‘among the most seriously affected by the effects of the economic crisis’, and which consists of nearly 300 companies, is demanding the same conditions for awarding partial unemployment measures as those which apply to industry. Up to now, the Committee for the Economy has judged that the haulage sector is not in crisis. Hence, only those haulage companies that have experienced difficulties due to an ‘economic dependency link’ with an industry in crisis have been granted the right to partial unemployment benefit for their personnel. Professionals in the sector have spoken out against this situation, stating that ‘the vast majority of hauliers’ are unable to take advantage of this measure for preventing redundancies.

Call to government to maintain employment

Fearing that an increasing number of companies will introduce redundancy programmes and job cuts, the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) has asked the government to take clear action to maintain employment or to provide training for people who are affected by a redundancy programme or threatened with redundancy. The trade union insists that everything possible must be done to retain the skills and qualifications present in the Luxembourg job market, adding that this also applies to cross-border workers.

Odette Wlodarski, Prevent

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