After the parliamentary elections, Luxembourg is on the brink of forming a new government. Following five weeks of intense negotiations, the Christian Social People's Party (CSV) and the Democratic Party (DP) have agreed on a government program. Luc Frieden, the CSV's national lead candidate and the individual tasked with forming the government, announced this on Monday, revealing that the coalition agreement will be signed on Thursday.
Frieden expressed his satisfaction with the agreement, mentioning that the aim was to merge the objectives of the two parties' programs. He emphasized that this was possible due to serious, intense, constructive, and amicable negotiations. The finalization of the individual texts is expected to be completed over the next couple of days.
While specific details of the program remain undisclosed, Frieden stated that priorities include housing construction, boosting people's purchasing power, reconciling work and family life, and environmental and climate policies that prioritize individuals. Ensuring the country's security is also an essential aim.
This three-party coalition, led by the Liberal Bettel, which has been in power since 2013, was pushed out of office on October 8 due to the Greens' heavy losses. The CSV emerged as the strongest party, followed by the DP. With a combined majority of 35 out of 60 seats in parliament, this coalition has the necessary backing to shape the country's future.
Although Frieden did not disclose any details about the program, the new coalition has introduced several policies and measures across the housing, purchasing power, work-life balance, environmental, and security sectors.
Housing construction initiatives involve administrative simplification measures such as revising Article 29bis, introducing the "silence means consent" principle, and harmonizing environmental instruction procedures for housing and renewable energies. Combined, these reforms aim to generate 9,300 additional housing units, including 3,600 affordable units, respectively.
Programs to improve purchasing power include tax reduction measures, which the budget 2025 includes to boost the country's attractiveness and restore its competitiveness. These measures include adjusting the tax scale, revising class 1A, and lowering corporation tax.
New employment laws focusing on workplace fairness, mental health, and work-life balance are also a priority. Proposed changes include expanded Paid Family and Medical Leave (PFML) policies, salary transparency laws, and remote and hybrid work mandates.
The new coalition government is also focusing on environmental policies, particularly in the housing and renewable energy sectors. Measures have been introduced to harmonize environmental instruction procedures, simplify procedures for photovoltaic installations, and reduce administrative burdens.
Lastly, the government has committed to increasing defense spending to reach 2% of GNI by 2030. This will involve spending €2.3 billion over four years, investing €792 million in defense in 2025.
Critics have accused the CSV-DP government of undermining social dialogue, abandoning climate policies, and prioritizing private interests over public welfare. They have highlighted rising poverty statistics and criticized the government for revertiing to policies that favor the private sector over meaningful public intervention in the housing crisis.
With the coalition agreement set to be signed within days, Luxembourg is eagerly awaiting the details of the new government's policies and priorities.
