Inflation in Luxembourg: “Social crisis” or “companies in difficulty”? The new index is split

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Inflation in Luxembourg“Social crisis” or “companies in difficulty”? The new index is split

LUXEMBOURG – While Statec is planning a new index tranche at the end of the year, trade unions and employers are each pleading their case before the three parties that form.

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Jerome Wiss and Thomas Holzer

The agreement to postpone index tranches and payments was signed on March 31.

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Statec plans, on Wednesday, a new index tranche for the fourth quarter of 2022. If the figures still need to be refined and confirmed at the beginning of September, it seems now that a new index will take place between the end of 2022 and the beginning of 2023. It remains to be seen if it will be applied immediately to payslips or if it will be postponed, such as the start of the summer that does not start until next year.

To make this decision, the government, the trade unions and the employers must meet again within the framework of a tripartite, as decided after the agreement last March. At OGBL, we are not surprised by this new index bracket. “We knew from the beginning that the figures presented during the tripartite meeting did not continue,” breathed Jean-Luc De Matteis, central secretary of the OGBL. The different scenarios of the State, with inflation up to 7.3%, show “a huge impact on people’s purchasing power. Pasta has increased by 20%, oil by 30%, heating oil by 80%”, lists of unionists. “We touch people’s wallets too much and we risk having a huge loss of purchasing power”.

OGBL did not sign the agreement in March.

OGBL did not sign the agreement in March.

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As a result, the OGBL is approaching the next tripartite “like the last. We must fully support the households and not touch the index. The index is just a catch-up with inflation, it must go further,” explained According to him, “the companies have no problem. The oil companies are getting rich, the industry and construction are going well”.

“We don’t want to talk only about the index”

Jean-Luc De Matteis, OGBL

Jean-Luc De Matteis hopes that “the tripartite will be prepared by the government this time. We don’t want to talk only about the index, but talk about all the real problems. Taxes, housing… We can finance things with scales in the tax on big salaries, more taxes on corporations…”

In the LCGB also, “this index is not a surprise, everyone is used to the idea”, commented Patrick Dury, president of the union. He will also go to the negotiating table with “the same priorities as last time: the purchasing power of employees and the protection of jobs. This crisis must not become a social crisis”.

Patrick Dury (LCGB)
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But should the protection of purchasing power include the use of the index or are possible compensations, such as tax credits given instead of the summer share? “The agreement last time was based on unity, but there I still don’t know what to talk about next time,” continued Patrick Dury. “We have other demands, such as the adjustment of the tax scale, the release of the minimum wage from taxation… We rely on the support of low and moderate wages”.

“Social dialogue is and remains an important tool in the crisis and part of our success story. The government does not leave anyone” by the wayside, Prime Minister Xavier Bettel responded on Twitter. “With social partners, we will find common solutions that will bring relief to people and businesses.”

On the side of employers, it is time for reflection and analysis taking into account “the evolution of the situation and the new elements”, answered Jean-Paul Olinger. The director of UEL recalled that the scenario of the new index tranches was included in the agreement signed with the government in April, and it provided “lag and compensation”.

Jean-Paul Olinger (UEL).
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Mr. Olinger insisted on the need to consider the economic situation in a global way, without forgetting the risks that weigh on companies: “All economic indicators are negative. Inflation also affects societies. If they additionally have to deal with unexpected salary costs, some may find themselves in a lot of trouble,” he concluded.

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