A government takeover of a business is a legally complex matter in itself, let alone when the business is facing bankruptcy, as is the case for the Cardoso construction company.

Although the proposed takeover of one of Luxembourg's biggest construction companies could theoretically be possible, it is not considered to be economically viable at this time, the Ministry of Finance said in a statement on Friday.

At the end of July, the Left Party ('déi Lénk') suggested the government take over the Manuel Cardoso company and transform it into the first publicly owned construction firm, after the business announced it was facing bankruptcy.

In response, the Ministry explained the government is permitted to temporarily acquire stakes in companies in specific cases in order to assist with reorganising the business and relaunching it from a better position. Such operations are generally overseen by the state-owned public-law banking institution Société Nationale de Crédit et d'Investissement (SNCI) and are analysed on a case-by-case basis, depending on whether the business's recovery is in the interest of its employees, or the national economy.

The Ministry added that different measures already exist to assist companies facing financial difficulty, with options such as partial unemployment, or the loaning out of employees to other firms.

Further reading: Trade Chamber opposes turning Cardoso into state-run construction firm