The commercial activity must recover globally and Luxembourg can deal with both the economic recovery and an increase in commercial activity. We have to be ambitious.
Finance Minister Pierre Gramegna (DP), accompanied by Deputy Prime Ministers François Bausch (Déi Gréng) and Dan Kersch (LSAP), detailed the new aid measures decided by the government on Wednesday May 20th. Again a very ambitious program.
A new stage has been passed and that requires a change of scenery. The one in the press conference room of the European Convention Center in Luxembourg, featuring a map of Luxembourg and, above all, a slogan: “Neistart Lëtzebuerg” (a new beginning for Luxembourg). With three even more marked priorities: quality of life, solidarity and stability.
Lack of growth requires action
Thanks to the good figures of the health authorities, a new beginning starts after a hard phase of confinement, which severely put the homes and businesses of the country to the test. On Wednesday May 20th the Government Council decided new subsidy, which Prime Minister Xavier Bettel had already announced to a large extent. And that complements the other measures taken in recent weeks. Finance Minister Pierre Gramegna (DP), accompanied by Deputy Prime Ministers Dan Kersch (LSAP) and François Bausch (Déi Gréng), gave the details.
Firstly, he recalled through a macroeconomic analysis that, in the context of the recovery, “Luxembourg is better placed than the others. Especially since their public finances are healthy. We have more room for maneuver.”. The financial center, which “represents 30% of the country’s wealth”, remained active.
This also offers a significant attack force: this new subsidy, estimated at between 700 and 800 million euros, combined with the previous ones, represents 5.5% of the national GDP, or 3,000 million euros. Belgium and France only made an effort at 2% and Germany at 4.6%. “We will not have growth for two years, so we must act“, insists Pierre Gramegna. This is strengthening the liquidity of households and the economy.
A call was also made for everyone to play the game: individuals to pay their bills, business, VAT or other taxes, for example, “to create a virtuous circle“.
Recovery fund and flat-rate aid
While the Minister of Tourism Lex Delles (DP) will detail the subsidy dedicated to this sector on Friday, the Minister of Finance returned for the first time to the recovery and solidarity fund for companies. It will be aimed at the most affected companies (in the restaurant, tourism, fitness, events, etc. sector) that have not yet been authorized to reopen on May 20th. They will have to demonstrate a loss of turnover of at least 25% in June 2020 compared to June 2019. The aid will be 1,250 euros per employed employee, 250 euros per temporarily unemployed employee, with maximum limits: Maximum 10,000 euros per month for companies with less than 10 employees, € 50,000 per month for companies with less than 50 employees and € 100,000 per month for companies with more than 50 employees. This assistance will be available from July 1st for a period of six months.
Other lump-sum aid will be awarded to retail and personal care companies: € 1,000 per employee in June, € 750 in July and € 500 in August, up to a limit of € 50,000 per month. This measure is limited to SMEs.
As previously announced, a tax exemption of double the reduction granted to a tenant in commercial leases, up to a maximum of 15,000 euros, will be possible. Rent increases on private leases will be frozen until the end of the year.
On Friday, the Minister of Economy Franz Fayot (LSAP) will give details “on other measures“, said Pierre Gramegna: special help to increase the energy efficiency of companies, expansion of the reimbursable advances provided for in the stabilization pact of May 15th to September 15th and aid for investments in the field of digitization. Certain grants can go up to 800,000 euros. Also supporting lawyers and apprentices with a 10% revaluation of legal aid fees, doubling the cost of living subsidy, the sustainability of the family support license, etc.
“The good use of partial unemployment has helped maintain social cohesion“. said Dan Kersch, Deputy Prime Minister and Minister of Labor.
For the Minister of Labor, Dan Kersch, the correct use of partial unemployment has avoided a disaster. “In the United States, like us, they had 5% unemployment. Now we believe they will reach 25%”, he said.
The measure has cost 725 million, 32,000 requests have been made, and 325,000 wages have been paid through it. “Partial or temporary unemployment has been the instrument to maintain social cohesion“, says Dan Kersch.
Partial unemployment maintained until the end of 2020
The partial unemployment measures will continue until the end of the year and the advance system will continue. Short-term conjunctural unemployment due to Covid-19 will evolve towards structural partial unemployment, which will be simplified, because “nobody can pretend that companies do not face changes“.
The plan proposes guaranteeing access to simplified structural partial unemployment to companies affected by the pandemic crisis and that have benefited from partial unemployment due to “force majeure due to Covid-19“, starting in July. Therefore, it follows that companies must present a recovery plan, or even a job retention plan, authorizing layoffs in the structural system of partial unemployment, but that should be avoided as much as possible. Keep in mind that companies will benefit from a simplified, even ultra simplified, digital procedure. This will allow them to reorganize to gradually adapt to the post-Covid-19 situation.
Finally, the economic recovery will also require an ambitious state. “We are not going to reduce public spending, it would be a very bad idea. On the contrary, they will increase 6.3% in 2021. No other country is doing this in Europe”, says François Bausch.
Measures aimed at sustainability
Convinced that, more than ever, it is necessary to go in the direction of sustainability, Minister Déi Gréng detailed a list of ecological measures:
- The Prime House for energy modernization of buildings increased by 50% for contracts signed from March 20th to March 21st, 2021, work can be done until the end of 2022.
- An “25% increase in the subsidy” if you replace your heating with a renewable energy based system.
- A 25% bonus for replacing the boiler.
- Aid for photovoltaic installations above 30kW will now be accessible to everyone.
- A subsidy program for private electric charging stations is being developed, complementary to the Chargy Network, aimed at users who want to charge their vehicle at home.
- A network of fast charging stations will be developed.
“These are measures that will be beneficial for the construction sector” at the same time as for the planet.
These ambitious measures are “essential” for the government. Of course, it can be reviewed in the event of a resumption of the epidemic. A working group is studying this situation that nobody wants. Because, as François Bausch pointed out when looking at Pierre Gramegna, “we cannot allow a confinement every three months“.
New measures include aid for businesses and hotel vouchers to boost tourism industry.
Luxembourg will roll out between €700 and €800 million in fresh aid to help companies as part of the country’s economic recovery plan after businesses have suffered from a nation-wide lockdown put in place two months ago to contain the spread of the coronavirus.
The newly announced package includes aid to make up for financial losses, vouchers to spend at hotels to boost the tourism industry, and a stop on rent increases.
“Today, we can’t say we have won the fight against the virus“, prime minister Xavier Bettel said during a press conference on Wednesday. “But we have reduced the effects of the virus. We have opted for the right strategy, I’m certain we took the right decision“.
Bettel put the country into lockdown on 16 March, closing shops apart from those selling food, and all restaurants and hotels. While most shops have now opened their doors again, restaurants, bars and hotels are mstill waiting for a further easing of the lockdown.
A new multi-million-euro plan – which comes on top of a rescue package that had already expected to reach a budget of €10.5 billion – aims to maintain jobs and keep companies in business despite the lack of revenue and a reduced need for staff over the past months.
Companies which have been heavily hit will receive €1,250 per month. People receiving cost-of-living allowance will get twice the amount for the rest of the year, while residents and cross-border workers will receive a voucher to spend a night at a hotel in Luxembourg to boost tourism. Landlords will not be able to increase rents until the end of this year.
The health crisis has meant fewer people already unemployed were able to find jobs last month. Unemployment agency ADEM said the high number of unemployed people in April was mainly due to fewer people finding jobs rather than more people signing up for unemployment benefits.
A total of 1,796 new people registered – 18% fewer than in April last year. But only 884 people ended their benefits after finding a new job last month, compared with 2,512 in April 2019. There were 1,895 vacancies last month, 43% less than in the same month of last year.
More measures to lift the lockdown could come out next week, Bettel said. He had previously said restaurants could reopen on 1 June if the spread of the disease remained in check, but he repeated the date is still uncertain.
“Foreign affairs minister Jean Asselborn has been in talks with France and Belgium to see when the borders will fully reopen“, Bettel said. No date has been agreed but Luxembourg had hopes Belgium would open before France, which will remain fully closed until 15 June.
“Looking back, this crisis has shown us to what point it’s difficult to take measures without knowing if they are right or not. We had to act quickly. Figures show us we have avoided a big catastrophe“, Health Minister Paulette Lenert, who was with Bettel, said at the press conference.
“We had one aim: pull the hand break. Now our aim is to reintroduce normalcy by gradually reducing these measures“.
On May 13th, the Official Spanish Chamber of Commerce in Belgium and Luxembourg hosted a webinar on “With the development of society through football”, in collaboration with its member company LaLiga.
The aim of this webinar was to present and explain the different social, educational and sportive projects of LaLiga, as well as the new initiatives they have been organizing during the COVID-19 crisis to support society and get closer to their fans all over the world. The webinar, which was taught in English, aimed to explain how through these projects the values of football are the vehicle to build a better world.
Andrea Oriol, LaLiga’s delegate in Benelux, started by informing about the important place these projects have in the company’s activity and explained that it is more than just about football and competition. “Giving back to society what society has given us” is the guiding theme of all these projects.
During the conference it was explained how due to the pandemic LaLiga has organized various activities under the subject of #LaLigaSeJuegaEnCasa. Among other examples, the association has organized its own initiatives such as “LaLiga Santander Festival” in which they managed to raise more than 1M € in donations from all over the world. At the same time, they have also participated in other initiatives run by other organisations such as the Red Cross in which they worked with their partner companies in China to donate medical supplies to Spain.
In addition, she reported the digital transformation of all LaLiga Foundation’s sports programs due to the pandemic but stressed the importance, more than ever, of keeping these programs active. Social and sports projects around the world have been maintained thanks to the social work of LaLiga. These projects are spread all over the globe, for example in India to promote gender equality, or in Brazil to promote youth telent’s visibility. They also have social projects developed through programs as well known as LaLiga Genuine Santander, Social Fair Play or LaLiga Valores y Oportunidad.
To conclude, the speaker presented the objectives achieved so far in figures as a general balance and highlighted the three future objectives in this social work: giving continuity and monitoring all its projects, continue to generate opportunities and empowerment among its participants and continue to expand horizons to new projects and countries.
At the end, a Q&A round was held in which the participants were able to raise their doubts about the information presented.
From the Chamber we want to thank Andrea Oriol and LaLiga for their presentation and dedication, as well as all participants for their presence.
The management bodies of the employers and of the main unions ratified the agreement that their managers had reached at the last minute with the Ministry of Labor, according to which the ERTE designed by the Government after the declaration of the state of alarm are extended until the June 30th.
In this way, they are disconnected from the political decision to extend this exceptional situation and both the Ministry of Labor and the social agents undertake to evaluate its expansion beyond that date based on the economic conditions of the sectors and companies affected, according to the text to which the Government also gave the approval and approved in the Council of Ministers.
“This is a balanced agreement based on the value of social dialogue in which we all committed”, said the Minister of Labor, Yolanda Díaz, at the press conference after the extraordinary Council of Ministers, in which she also recognized the negotiating effort of the social partners. “They have demonstrated their commitment and that they are at the height of their country’s history at a time as difficult as this”, Díaz praised.
Along the same lines, the President of the CEOE, Antonio Garamendi, acknowledged that all the parties had to be flexible, and put social dialogue as an example of the effort that the country needs at all times in all its spheres.
It was not easy for the president of the businessmen to convince the CEOE leadership to sign the agreement. The stumbling block to the condition of maintaining employment during the six months after the end of the ERTE continues to be difficult in sectors especially affected by this crisis.
The CEOE wanted to erase the condition of maintaining employment the following six months
In the official statement issued by the employers following the meeting of its management committee, it is recognized that “a longer-term agreement would have been desired that would have given security and certainty to companies and workers, to accompany them in the process of full recovery of the activity”. But it also recognizes that “within the Government’s time and budget margins, the agreement improves the initial proposal”.
The truth is that the CEOE negotiating team has managed to initiate not inconsiderable changes for its interests. On the controversial issue of job maintenance, although the requirement to keep jobs for the six months after returning to activity remains, the employers have achieve an exception. Companies that demonstrate the risk of entering bankruptcy will not have this obligation.
On the other hand, Labor maintains the requirement that companies that have activity in tax havens or distribute dividends cannot access the advantages of ERTE due to force majeure, but at this point it has also made concessions. The requirement is maintained only for those who on February 29th, 2020 had more than 50 employees. In other words, it frees SMEs from this obligation and also establishes that large companies will be able to distribute dividends if they return the Social Security contributions from which they had been exempted, compared to the initial requirement that they intended to also return the benefits they would have received. your workers.
A commission is created to evaluate sectors that can continue in ERTE from July
Another novelty agreed by Labor and social agents is the possibility that ERTEs can be extended beyond June 30th depending on the sanitary conditions of economic opening of companies and territories.
To channel this possibility, a tripartite commission has been created in which Labor, unions and employers will work to define which sectors and companies meet the conditions that allow them to expand the ERTE.
Even so, the agreement contemplates incentives to return to business activity by lowering the exoneration of contributions and quotas for workers during the months of May and June for employees who remain in ERTE and expanding it for those who return to work.
Faced with the economic difficulties faced by merchants and hoteliers, Luxembourg City has decided to postpone the resumption of rent collection until June 1st, Serge Wilmes (CSV) announced.
The first councilor confirmed that the city renounces not only the income collected during the period of confinement, but also the resumption of activities, at least for companies. Restaurants are currently closed across the country, but some offer a takeaway or home delivery service.
In total, “the income that the City of Luxembourg renounces, to help companies and hoteliers, amounts to about 80,000 euros per month“, indicates the first councilman in charge of trade, that is, a total of 240,000 euros for the period of March to June 2020.
Serge Wilmes clarified that the resumption of rent collection only concerns tenants who can reopen their doors. Therefore, hoteliers can still breathe a little.
On May 6th, the Spanish Chamber of Commerce in Belgium and Luxembourg hosted an event as part of the “Breakfasts with the European Parliament” cycle, a platform for meetings between Spanish companies and the European Parliament, on the “Priorities of the Committee on Economic and Monetary Affairs (ECON) in the context of the Coronavirus: A new recovery and reconstruction package for Europe?”. Members of the European Parliament (MEPs) Isabel Benjumea, Vice-Chair of the Working Group on Budgetary and Structural Policies and member of the Group of the European People’s Party (EPP), and Jonás Fernández, member of the ECON and also a member of the Group of the Progressive Alliance of Socialists and Democrats (S&D) in the European Parliament attended to the session. Given the exceptional circumstances of the expansion of COVID-19 in Belgium, this Breakfast-debate was held telematically and there were also representatives of member companies of the Spanish Chamber, managers of companies, multinational and, European and Spanish associations.
Pablo López Álvarez, Vice President of the Chamber and moderator of the event, introduced the speakers, thanked them for their participation and also acknowledged that of all other attendees. Before moving on to the speeches, the Vice President briefly referred to the current historical circumstances we are experiencing, and explained that this situation has undoubtedly compromised the short-term priorities and activity of the Eurogroup.
MEP Isabel Benjumea made a deep historical and geopolitical reflection on the current moment, which seems to announce a new crisis in economic and social terms. She remarked that this health crisis has highlighted the different social tensions that already existed and which generate a confrontation between northern and southern Europe. Isabel Benjumea also pointed out that the European Parliament was right to provide a solid response by providing immediate funding to meet the initial needs arising from this health crisis. In these circumstances, MP Benjumea added, the Parliament will discuss with the Commission and the Council the form and volume of the Community budget and the recovery fund for Europe. In addition, the parliamentary groups are facing the challenge of reflecting on and rethinking the European Union’s priorities in this new environment and accordingly proposing a budget.
Next, MEP Jonas Fernandez reflected on the lack of coordination between member countries at the beginning of the decision-making process. Herein, he noted that the Eurogroup succeeded in giving a series of common economic measures, and observed that each member state individually assumed the costs. Additionally, MP Fernández claimed that thanks to the second response of the European Central Bank (ECB), it has been possible to provide guarantees and resources to deal with the crisis and to avoid the massive closure of companies during the period of confinement. He emphasized that it is also necessary a broad economic recovery plan, preferably to be undertaken by European funds through Community transfers, to minimize the credit route. In the upcoming weeks, the MEP specified that the Commission must obtain a clear view of the size of the fund and the extent to which this debt could be backed by the markets, favoring the mechanism of grants over loans. Furthermore, it will continue to discuss the conditionality of the measures and the possibility of debt mutualization.
During the time for questions, the participants were able to inquire the speakers on many issues of their interest. Thereby, they covered topics such as the perception that different parliamentary groups have on political consensus, the expected characteristics of the recovery fund (volume, sectoral distribution and modalities) and other issues related to the possible inclusion or exclusion of the recovery fund within the multiannual budget of the European Parliament.
The Spanish Official Chamber of Commerce in Belgium and Luxembourg would like to thank the MEPs, Spanish companies and representatives of the European Parliament who participated in this Breakfast.
The Prime Minister and the Minister of Health announced on Monday the end of the containment and the resumption of several activities on May 11th. Shops will be able to reopen, and social contacts will restart on a limited basis by continuing to respect the safety measures.
“It’s a return to normality“, but not a return to the way things were before. By announcing the end of the containment or “Bleift Doheem” at a press conference late Monday afternoon, Xavier Bettel (DP) and Paulette Lenert (LSAP) were intransigent on the respect of the measures to contain the spread of the virus: barrier gestures and social distancing. Discipline must be combined with solidarity.
Four more people were tested positive compared to Sunday, bringing the number of people affected by Covid-19 to 3,828. There were no additional deaths reported. 113 people are hospitalized, 21 of them in intensive care.
Considering the positive results over the last few days and the systematic monitoring of health facilities, the Government decided to start a new phase on May 11th:
- Shops can reopen. A precise list of authorized businesses will be released in the coming hours. With a ministerial announcement to come, the modalities of attendance will be adapted this Wednesday.
- The personal care sector, such as hairdressers and beauticians, will be able to return to work only by appointment.
- It will be possible to regain some form of social contact with up to six people (exceptions may apply to people living under the same roof) with the necessary discipline to limit the risk of spreading the virus. “The aim is to resume limited social contact with others, paying attention to the multiplier factor“, specifies Xavier Bettel. “And if it’s the same six people (each time), so much the better“. It’s not yet time for a barbecue or a party at home, says the Prime Minister, as if to better illustrate the idea of moderation that prevails, including in the denunciations that the authorities want to avoid.
- Gatherings and other outdoor events will be allowed, limited to 20 people.
- Cultural venues will be able to welcome the public again, avoiding queues and preserving distance and barrier gestures. Outdoor events that allow this, such as drive-in cinema, will also be possible.
- Outdoor sports will be allowed again, except team and contact sports. The changing rooms will remain closed.
- Indoor leisure areas, such as fitness rooms, casinos, discos or nightclubs, will remain closed.
- The same applies to the sector of tourism and services – forced to survive via delivery for restaurants – for which additional accompanying measures are being discussed. Pastry tasting salons are also affected. If the evolution of Covid-19 continues to unfold positively, the Prime Minister has indicated that bars and restaurants will once again serve meals on their premises on June 1st, subject to adjustments.
Discussions are ongoing within the government to adjust the specific measures that have been implemented to support the economy.
The same discussions will have to continue with neighboring countries concerning teleworking and the tolerance threshold allowed for cross-border workers. Xavier Bettel clarified that telework remains a good measure of social distancing and would continue to be favored in the coming weeks.
50 masks per inhabitant and cross-border
The Government, which has been busy with working groups modelling the evolution of the pandemic according to deconfinement scenarios, has not recorded a significant increase in infections following the reopening of construction sites on April 20th.
Xavier Bettel said he wanted to take the time to conduct the necessary analyses and exchange views with the specialists before taking the decisions announced on Monday. Concerned representatives of the economic sectors were waiting for these measures.
The masks, which have become indispensable elements in daily protection against Covid-19, will remind everyone that ” the virus is now part of our daily life“, and “we must learn to live with it“.
The Prime Minister has announced that a new massive distribution of masks will take place in the coming days. Each person over the age of 16 will receive 50 masks.
“The same applies to cross-border workers“, adds Xavier Bettel. “Discussions are ongoing to determine how the distribution can be done, so that people who work in that sector have the same opportunity to protect themselves“.
Paulette Lenert remarked that if the strict measures, the personnel mobilized and the infrastructures deployed did not ensure a minor impact of the pandemic, the possibility that containment will tighten again remains if the virus resurges.
As Xavier Bettel said on 20th March: Everyone remains part of the solution.
The Official Spanish Chamber of Commerce in Belgium and Luxembourg is a non-profit association whose main objective is the development of trade and investments between Spain, Belgium and Luxembourg. The Chamber offers to the companies a wide range of commercial and promotional services as well as professional contacts and facilitates business networking among its partners.
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