Luxembourg companies are united in the fight against inflation through the measures adopted in favour of households and companies. UEL strongly emphasises the considerable additional financial burden for companies of the two index tranches planned for 2023, by the increase in the minimum social wage on 1 January 2023 as well as by the explosion in energy bills and the risks of additional inflationary surges due to factors other than energy prices.
In the interests of the country’s economic fabric, UEL urges the Government to honour its commitment to avoid any impact on businesses from a 3rd index tranche in 2023, over and above the two planned tranches, in order to ensure the necessary predictability for businesses.
During the tripartite exchanges of 18-19 and 20 March, UEL presented its views on the economic context, which confirms the observations and fears put forward by UEL during the exchanges of the Tripartite Coordination Committee in March. Indeed, it is clear that the economic situation is deteriorating and that the multi-crisis context is becoming more pronounced. STATEC has confirmed the deterioration in the economic situation, the increases in inflation and production costs, the impact of indexation on the price of services and the risks to the economy. In addition to STATEC, most international organisations such as the European Commission, the IMF and the OECD are showing that economic forecasts are heading downwards. Companies will therefore have to cope with rising costs and charges in an extremely difficult economic climate.
Employers have accepted a package of measures designed to curb inflation without touching the indexation system (which is neither the solution to the current situation nor a social mechanism). With this agreement, the companies wanted to underline their solidarity with their employees and households who are also affected by soaring prices.
Companies will benefit from a degree of predictability between now and the end of 2023. The government has undertaken to ensure that businesses will not have to bear a 3rd instalment in 2023, given that, according to STATEC’s central forecast scenario, failure to reach an agreement would have led to 4 index instalments between now and the end of 2023. In addition, the tripartite agreement contains a number of important measures to help businesses with energy prices, as well as tax measures to help all businesses accelerate their energy, ecological and digital transition.
In the long term, Luxembourg’s competitiveness and economic attractiveness are also at stake, factors that until now have been the guarantors of the welfare state that we all hold dear.
In addition, the signatories to the agreement have agreed to avoid an abrupt end to price stabilisation measures at the beginning of 2024, especially when such an end would trigger an inflationary shock. If this were to happen, a phasing-out period over 2024 would have to be provided for.
Finally, the tripartite agreement signed today upholds Luxembourg’s tradition of social dialogue and political, economic and social stability.