Economy & Politics

“The current crisis is not an alibi”

Jean-Paul Olinger, director of the Union des entreprises luxembourgeoises (UEL), believes that partial unemployment should continue for a good part of 2021 and should be a response to the consequences of the crisis. Just like what is happening elsewhere in Europe.

Jean-Paul Olinger, director of the Union des entreprises luxembourgeoises (UEL), believes that partial unemployment should continue for a good part of 2021 and should be a response to the consequences of the crisis. Just like what is happening elsewhere in Europe.

(Pierre Leyers with Jmh) – Autumn promises to be difficult economically. For Jean-Paul Olinger, director of UEL, the crisis linked to the covid-19 pandemic is not the only cause, but exacerbates its effects. In particular the challenges linked to digitization and globalization.

Massive job cuts at ArcelorMittal, restructuring at SES or even tensions at Luxair. How do you see the situation for the weeks and months to come?

Jean-Paul Olinger – “It was already clear, during confinement, that this fall would highlight the effects of the pandemic on our economy. But not all sectors are affected in the same way as all companies in the same industry. Covid-19 plays a decisive role in certain sectors, such as hotels and restaurants or the cultural sector. In others, it is an aggravating factor. For the steel industry, the challenges lie on a global scale, even without viruses.

This is why the discussion around the ‘Green Deal’ – and the fear that our partners outside the EU have different rules than ours – remains a topic on the table. The attitude of certain members of the government towards new projects does not naturally contribute to the enhancement of our economy abroad, even for new investments of companies already established here.

The unions accuse the employers of taking advantage of the exceptional situation to pass unpopular decisions …

“The current economic crisis is not an alibi. Take the case of aviation, for example: Cargolux currently has a large number of orders, the freight center is operating at full capacity, but Luxair is bearing the brunt of the consequences of the pandemic. The cost structure in Luxembourg is very high in many areas. This is a fact that will create additional pressure in the near future.


Politik, Itv Xavier Bettel, Sechs Monate Covid-19 Foto: Chris Karaba / Luxemburger Wort

Six months after the arrival of the pandemic in the Grand Duchy and its consequences on society, the economy and the political world, Xavier Bettel looks back on a period that he describes as “more difficult” of his mandate as Prime Minister.


Is the tripartite still the right instrument for resolving conflicts?

“Social dialogue works well on many levels. In July, we had a national tripartite, and now there are sectoral tripartites in steel and aviation. It is precisely in these two sectors, which are particularly affected, that the social partners must talk to each other and find a common solution. Sectoral tripartites are very important as an instrument of crisis. At the national level, the dialogue is a little more difficult. It seems that we still need a crisis to move the dialogue forward.

In this context, I was struck by a position taken by the CGFP. While the representatives of the OGBL and the LCGB demonstrate for employment in these two sectors, Romain Wolff explains that, given the budgetary situation, any renunciation of his union to additional wage demands must be considered as a gesture of solidarity.


IPO, PK CGFP, Forderungen an die Regierung, Romain Wolff und Steve Heiliger, Coronakrise, Covid-19, Sars-CoV-2, Foto: Guy Jallay / Luxemburger Wort

Interviewed Monday morning on RTL, Romain Wolff, president of the CGFP, assured that all the elements present in the new civil service salary agreement would not be required by the end of the year, as initially planned .


Has a date been set for the next national tripartite?

“At the July meeting, it was decided that the social partners would meet in the fall, without any specific date being set. Either way, the meetings will be more effective if the working groups decide to continue working in the meantime. Benefiting from purposeful and coordinated approaches is more important than ever.

What will be the themes that will be discussed?

“It is the government that sets the agenda. But jobs, like in July, will likely be a priority.

How does the UEL position itself in the face of the tax increase requested on the highest incomes, the hardening of inheritance taxes and the reintroduction of wealth tax?

“We currently have a deficit in the budget but we can close it in the medium term. That is why we should look to the future and continue to invest. We need to do it in skills and infrastructure in order to generate new income in the long term. We need a qualitative tax reform that encourages businesses and individuals to invest in the transformation of the energy system, in digitization and in skills. The State must support and facilitate these investments, but it does not need to finance them. From this point of view, inheritance or wealth taxes are counterproductive.

How long do you think the State will be able to continue to finance partial unemployment?

“The crisis will continue to accompany us for some time to come. France, Germany and Austria have already announced that short-time working will continue for much of next year. This gives companies planning security they are ready to invest. In Luxembourg, there are whole sections of the economy that are doing badly. I am thinking in particular of retail trade, hotels and restaurants, as well as many companies in the industrial sector. Part-time work is vital for their survival.


ARCELOR MITTAL ILLUSTRATION BELVAL FACTORY. Friday November 30, 2012. © PHOTO / NICOLAS BOUVY

The Ministry of Labor has just sent companies that have benefited from financial support a reminder: they must quickly reimburse any overflow that may be perceived. There is talk of 320 million to reimburse the state.


Do you believe that a wave of bankruptcies will occur without recourse to partial unemployment and other aids?

“Despite state aid, some companies will not survive. The cost of partial unemployment and leave for family reasons, which aim to maintain the purchasing power of households, will amount to around one billion euros by the end of the year. In addition, there are still only around 95 million euros in grants for businesses.

However, this aid is offset by social security contributions of the same amount for partial unemployment that companies must bear. It’s a zero-sum game that places a burden on these companies. As a result, state aid is in reality less generous than it appears at first glance. In any case, more help is needed, but it must be targeted. The surcharge on fixed costs, as applied in Austria, could be a solution. Other areas also need additional support. A Luxembourg without culture, for example, would be unthinkable.


2,966 files were validated by the last Economic Committee. And for 43.5% of cases, these are companies linked to the hotel and catering, tourism and events sectors.


In a recent report, the Economic and Social Council indicated that teleworking was one option of the future, among others …

“The CES proposes that home work continues to be possible on a voluntary basis – that is, there is no ‘right’ to work from home, but also no ‘obligation’ “. This is a good thing, because many companies want to offer work from home to their employees and many people want more home offices. But this is not the case for everyone! The Economic and Social Council provides a legal framework in which employers and employees can move freely.

The increase in the number of teleworking days for cross-border workers raises questions in terms of taxation and social security. CES offers a limit of 55 days per year. Is it realistic?

“With regard to social security, it is possible to spend up to 25% of one’s working time – i.e. the equivalent of 55 days of full-time employment – outside Luxembourg’s borders while remaining covered by social security in Luxembourg. This is a rule that applies at EU level. If an employee spends more than 25% of his working hours abroad, he is fully covered by the social security system of his country of residence. The situation is however different for taxes.

The Grand Duchy has agreed with each neighboring country on a limited number of working days which can be carried out outside the borders of Luxembourg without these working days being imposed in the employee’s country of residence. If these limits are exceeded, all working days not carried out in Luxembourg are taxable in the country of residence and exempt in Luxembourg.


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