“For two reasons, this year’s general assembly is taking place in unusual circumstances,” says Robert Dennewald, president of Fedil. One of these is obviously the economic crisis, which Dennewald describes as having “attained an undeniably serious and widespread level, clearly separate from normal cyclical variations.” The other point of interest is the impending election on June 7. Fedil has been working on proposals to assist the next government in tackling the challenges that lie ahead over the next five years, and is hopeful that at least some of these proposals may be adopted and prove advantageous.

As one term of government comes to a close, however, Dennewald was also keen to highlight the good, and not so good, aspects of economic policy in this country since 2004. On the government’s response to the crisis, Fedil appreciates the effort of such measures as boosting public investment and directly supporting enterprise as well as keeping an eye on purchasing power and minimum wages, but believes the overall effect of the government’s crisis response has been somewhat limited. Looking slightly further back towards the beginning of the current term, initiatives taken in the interest of the economy were praised. Measures taken to improve Luxembourg’s competitiveness and efficiency were highlighted, as well as innovation. Dennewald acknowledges the financial support for Research and Development, but sees a need to concentrate on “key areas for modernisation and the prosperity of Luxembourg, and for increased cooperation between public research entities and businesses, from drawing board to project realisation.”

No quick fix

On the minus side, Dennewald admits disappointment that the government hasn’t dealt with certain structural weaknesses that have been present in Luxembourg for several years. Major concerns include the lack of sustainability in the health service and pensions assurance, as well as Luxembourg’s lengthy and complex administrative processes.

There is no quick fix. Fedil has outlined several more gradual targets both for the period of recession and thereafter. Among these is to improve the country’s economic diversity by boosting and supporting the technology and R&D sectors, as well as adjusting retirement age to be more in line with increased life expectancy.

Fedil also sees a need for changes in the labour market, starting with education but also taking in reform of placement for the unemployed and an improvement in part-time and flexitime working options. Dennewald insists that Fedil member organisations are ready to play their part in the fight against potential rising unemployment and towards the goal of full employment, as well as support for policies that stimulate the creation of jobs. Finally, he is in favour of reversing the Europe-wide trend towards de-industrialisation by “revitalising innovative companies through the use of proven policies of economic diversification and development.” The coming years will necessitate a move away from more laissez-faire economic policy. Planning ahead is half the battle, even if it can sometimes be difficult to know what lurks around the corner.