Luxembourg

   
 

Executive Summary

Growing population
with many foreigners
Luxembourg is an economically prosperous country in the middle of Europe. It is a member of all important and relevant economic alliances. On 1 January 2018, the country had 602,000 inhabitants, the highest level in its history, of whom 47.9% are foreigners (compared to 43% in 2011 and 29% in 1991). In recent years, tens of thousands of people have been naturalized Luxembourgish. Dual nationality is possible with many countries within the European Union. In addition, following the Brexit vote in the United Kingdom, the number of UK applicants for a Luxembourg passport has increased significantly. In 2017, more than 9,000 people were naturalized. That was almost 2,000 more applications than in 2016 and 15 times as many as in 2000.
Open to migrants
and refugees
In 2017, Luxembourg received 2,300 refugees. Overall, the country is coping well with immigration. Xenophobia and anti-Semitism are not widespread, and are consistently punished by the courts.
High employment figures, many border crossers
In 2017, the number of employed people in Luxembourg reached a new high of 432,000 (compared to 418,000 in 2016). In 2000, the number of employed people was only 264,000. However, 175,000 of Luxembourg’s 432,000 employees are cross-border workers from Luxembourg’s three neighboring countries and this number is increasing.
Highest minimum
wage in Europe
In 2017, the average disposable income per household reached a record high of €5,584 per month. The median household income was €4,666 per month. Moreover, the statutory minimum wage has increased to €2,458 per month for a person with a qualification and €2,048 per month for a person without a qualification, based on a 40-hour working week. This is a record high minimum wage for Luxembourg and the highest minimum wage in the European Union.
EU capital and international financial center
Luxembourg’s economy is booming and profiting from expanding EU and global economies. The relocation of new industries and businesses, increased public investment and rising domestic demand are fueling economic growth in Luxembourg. Luxembourg City is one of three EU capitals and a key international financial center. The country offers extraordinary business conditions with an attractive tax environment, high private and public investments, strong GDP growth, a high living standard, an outstanding social security system and low unemployment. The country’s public administration is efficient and the overall economic outlook remains stable.
Strong economic growth, with fiscal stability
Luxembourg has experienced strong economic growth and fiscal stability. This has provided public authorities the means to develop and maintain an outstanding welfare system over the last two decades, even as neighboring countries have reduced public welfare provision. Luxembourg’s welfare system includes generous insurance coverage, benefit schemes and public services. For example, health care provision has recently been expanded and the level of retirement benefits exceeds Scandinavian standards.
Environmental protection
a weak spot
There are a number of problems with environmental protection. The rivers are in poor condition and the country has problems ensuring fresh water supplies. Nitrate pollution due to agricultural runoff is a major problem. In addition, many places are still not connected to wastewater treatment plants. The condition of the forests has deteriorated in recent decades. The percentage of clearly damaged trees has increased from around 23.4% in 2000 to 38.3% in 2016. Since 2013, successive governments have adopted several environmental reforms to tackle this problem. In the 2018 national elections, the green party was able to significantly increase its vote share and, as a result, the number of government ministries it holds.
Citations:
“Luxemburg in Zahlen.” STATEC 2018. https://statistiques.public.lu/catalogue-publications/luxembourg-en-chiffres/2018/luxemburg-zahlen.pdf. Accessed 25 Oct. 2018.

“Budget 2018.” www.budget.public.lu/lb/budget2018.html. Accessed 25 Oct. 2018.

“Luxembourg.” OECD Better Life Index, www.oecdbetterlifeindex.org/countries/luxembourg/. Accessed 25 Oct. 2018.

“Luxembourg.” OECD, www.oecd.org/luxembourg/. Accessed 25 Oct. 2018.

National plan for smart, sustainable and inclusive growth – Luxembourg 2020. Le gouvernement du Grand-Duché de Luxembourg, 2017. www.gouvernement.lu/6854313/2017-pnr-luxembourg-fr. Accessed 25 Oct. 2018.

Zenthöfer, Jochen: “Standort Luxemburg. Vom Wachstum eines Kleinstaates,” in: Frankfurter Allgemeine Zeitung, 22 January 2018, p. 16.
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