Economy & Politics

Luxembourg, country least vulnerable to the pandemic

Even if the second wave of covid-19 does not spare the Grand Duchy, its medium and long-term effects should be minimal, according to the conclusions published on Monday from the Pandemic vulnerability index. This compares the impact of the pandemic on the structures of the country.

Jean-Michel HENNEBERT

Jean-Michel HENNEBERT

Even if the second wave of covid-19 does not spare the Grand Duchy, its medium and long-term effects should be minimal, according to the conclusions published on Monday from the Pandemic vulnerability index. This compares the impact of the pandemic on the structures of the country.

According to the German rating agency Creditreform Rating AG, Luxembourg has won the title of least vulnerable country among EU member states in the face of the pandemic. With a score of -0.65 on the Pandemic vulnerability index, the country is ahead of Germany, Denmark and Sweden. Countries characterized by “a high quality health system, a favorable labor market with few precarious jobs and few self-employed workers, as well as a high capacity for remote work”.

Based on five criteria, the Pandemic vulnerability index ranks Luxembourg among the best performers in virtually all of the areas studied. The only notable exception is a relative vulnerability that is higher than the European average with regard to its economic structure. A “fragility” that the Competitiveness Observatory puts under the influence of “openness to international trade and strong integration into international value chains”.

Note that to assess the country’s capacity to overcome the health crisis, members of the Competitiveness Observatory have combined this index with “fiscal latitude”. In other words, with the ratio between tax revenue and gross debt of general government. A combination of two criteria which means that “the situation is relatively benign in Luxembourg, Denmark, Sweden and Estonia”. Characterizing thereby these countries as having “a relatively low structural vulnerability and a fairly high budgetary room for maneuver”.

On the European level, Luxembourg ranks fourth in terms of competitiveness, just behind Denmark, Slovenia and Ireland. A score identical to 2019. Far from neighboring countries, since Germany is in 11th place, Belgium in 16th and France in 17th. “This shows that Luxembourg had a solid starting position before the crisis,” Franz Fayot (LSAP) assured Monday during the presentation of the competition report. And the Minister of the Economy to say “convinced that Luxembourg will emerge from this crisis stronger than before”.


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