Your Weekly Recap for 5–9 August.
Here are five things you should know at the end of this week:
- Inflation to stabilise in 2024, moderately increase in 2025
- SIDEC municipalities grapple with 60% rise in waste collection fees
- Executive phishing scandal unveiled at Caritas as government freezes funds
- Kamala Harris picks Minnesota Governor Tim Walz as running mate
- PM Keir Starmer promises tough action as far-right riots sweep across England
1. Inflation to stabilise in 2024, moderately increase in 2025
Luxembourg's inflation rate is projected to stabilise at 2.3% in 2024, with a slight increase to 2.6% in 2025 due to the phase-out of energy price support measures.
- Wage indexations are expected in the last quarters of 2024 and 2025, linked to inflation to balance economic stability with cost-of-living adjustments.
- Luxembourg's annual inflation rate as of July 2024 is 2%, the lowest since early 2021, driven by a drop in core inflation and petroleum product prices.
Ups and downs – Luxembourg's inflation rate is projected to stabilise at 2.3% in 2024, reflecting a slowdown in inflationary pressures. This deceleration is influenced by recent trends, including adjustments in price measures and the impact of energy price policies. However, inflation is expected to rise slightly to 2.6% in 2025, primarily due to the gradual phase-out of government support measures for energy prices. As these supports are withdrawn, the cost of energy is likely to increase, contributing to a modest uptick in inflation.
Indexations forecast – In response to inflation, Luxembourg is set to implement wage indexations in the last quarters of 2024 and 2025. These indexations are designed to adjust wages in line with rising prices, helping to preserve purchasing power and economic stability.
Key areas – As of July 2024, Luxembourg's annual inflation rate stands at 2%, the lowest since early 2021. This reduction is largely attributed to a significant drop in core inflation, which excludes volatile items like food and energy, as well as a slowdown in the prices of petroleum products. The decline in these key areas has helped to ease overall inflationary pressures, leading to a more stable economic environment.
2. SIDEC municipalities grapple with 60% rise in waste collection fees
As of 1 July 2024, citizens in 44 SIDEC municipalities face a 60% increase in waste collection fees due to inflation, with costs for a 60-litre bin rising from €86 to €137.6.
The price hike is attributed to increased electricity and fuel costs, alongside higher employee salaries, and the fact that prices had not been adjusted since 2015.
SIDEC municipalities are adapting differently to the increase, with some rewarding smaller waste production, and plans are underway to establish more resource centres and reduce landfill reliance by 2030.
Rising fees – Since 1 July 2024, residents in 44 municipalities under the SIDEC waste management syndicate are now paying 60% more for waste collection services. This significant increase means that, for example, the cost of emptying a 60-litre bin has jumped from €86 to €137.6, while a 360-litre bin now costs €531.2 instead of €332. These higher charges are a direct response to the soaring inflation rates in the region, leading to substantial financial strain on households.
First adjustment since 2015 – The sharp price hike is driven by a combination of factors, including a dramatic rise in electricity costs, which have surged from €300,000 to €1.3 million over three years, largely due to the energy required for waste separation. Additionally, increased fuel prices and higher salaries for SIDEC employees, also influenced by inflation, have contributed to the higher fees. Despite these pressures, Sidec had not adjusted its prices since 2015, leading to a delayed but now severe correction in fees.
Different strategies – Municipalities within the SIDEC network are responding differently to the new pricing structure. For instance, Erpeldange-sur-Sûre has implemented a pricing scheme that imposes a higher increase on larger waste bins to encourage waste reduction, contrasting with SIDEC's approach, which seeks to not put larger families at a disadvantage. Looking ahead, there are plans to establish more resource centres, aiming for one per 10,000 to 15,000 inhabitants, as well as a shift away from landfill usage by 2030, with a prohibition on storing residual waste at rubbish tips.
3. Executive phishing scandal unveiled at Caritas as government freezes funds
Caritas Luxembourg has fallen victim to a €60 million 'executive phishing' scam, leading to a significant embezzlement investigation, with a high-ranking employee under judicial supervision but claiming to be a victim herself.
The government has frozen all funding to Caritas until responsibility for the fraud is determined, sparking political debate about the future of the NGO's critical social work.
Political parties emphasise the importance of ensuring Caritas' activities continue, while criticising the government for potentially using the scandal to undermine an organisation known for its critical stance on government policies.
Executive phishing – The scam, also known as a 'CEO scam', involved sophisticated criminals impersonating executives to deceive authorised employees into making unauthorised payments. The fraud came to light as part of a broader investigation into embezzlement at Caritas. A high-ranking employee, who has turned herself in, is currently under house arrest, claiming she was manipulated by the scammers and did not benefit from the fraudulent transactions. This situation has raised concerns about internal controls and the vulnerabilities of organisations to such targeted attacks.
Essential services at risk – In response to the scandal, the Luxembourg government has taken the drastic step of freezing all financial support to Caritas until the full extent of the fraud is understood and accountability is established. This decision has led to significant controversy, as Caritas plays a crucial role in providing social services on behalf of the state. The freeze on funding threatens to disrupt these essential activities, raising concerns about the potential impact on vulnerable populations who rely on Caritas' services.
Lawmakers weigh in – Political reactions to the scandal have highlighted the delicate balance between ensuring accountability and maintaining critical social services. Parties like Déi Lénk and The Greens argue that the government's approach might be an attempt to weaken Caritas, which has been a vocal critic of state policies. They stress that while it is necessary to address the fraud, it is equally important to ensure that Caritas can continue its work, which often involves addressing social issues ahead of government action.
4. Kamala Harris picks Minnesota Governor Tim Walz as running mate
© AFP
Kamala Harris selected Minnesota Governor Tim Walz as her running mate in the 2024 US presidential race, aiming to broaden her appeal with his Midwestern and working-class credentials.
Harris and Walz launched their campaign with a rally in Pennsylvania, emphasizing their commitment to uniting the nation and contrasting their vision with that of Donald Trump.
Walz criticised Trump’s presidency, highlighting his own background in service and community, while Harris focused on portraying their campaign as a 'fight for the future'.
Broadening appeal – Kamala Harris chose Tim Walz, the Governor of Minnesota, as her vice-presidential running mate in the 2024 election, with the goal of appealing to a broader range of voters. Walz, a 60-year-old Midwesterner with a down-to-earth persona, offers a balance to Harris's background as a progressive from California. His experience as a military veteran, former teacher, and political figure could help attract working-class and rural voters, as well as moderates who may be concerned about Harris being too far left.
Swing states – The Harris-Walz campaign kicked off with a rally in Pennsylvania, a crucial battleground state, where they presented a unified front against their Republican opponents. During the rally, Harris spoke about the importance of defending fundamental freedoms and building a brighter future, while Walz emphasised his commitment to uniting the nation and supporting the middle class. This event marked the beginning of their aggressive campaign trail through other swing states, highlighting the significance of these regions in determining the outcome of the election.
Aspirations for a better future – Walz used his first major speech as Harris's running mate to sharply criticise Donald Trump, accusing him of weakening the economy, increasing crime, and sowing division. Walz contrasted his own background of service and community values with what he portrayed as Trump’s self-serving behaviour. He also reinforced Harris’s credentials as a fighter for justice and fairness, setting the tone for a campaign that seeks to not only oppose Trump, but also offer a positive vision for the future. Walz's relatable personality and viral moments, like his use of the word "weird" to describe Trump and his running mate, are expected to be key elements in their strategy to connect with voters.
5. PM Keir Starmer promises tough action as far-right riots sweep across England
© AFP
UK Prime Minister Keir Starmer has vowed swift criminal sanctions against far-right rioters involved in the worst unrest in England since 2011, following misinformation about a mass stabbing that killed three children.
The violence, which has resulted in hundreds of arrests, has included attacks on mosques, hotels housing asylum seekers, and clashes with police across multiple cities, with over 6,000 specialist officers on standby for further disturbances.
The unrest has been fuelled by far-right groups, particularly those associated with the English Defence League, and exacerbated by social media, prompting widespread concern and international travel warnings.
Swift action promised – UK Prime Minister Keir Starmer has taken a firm stance against the far-right rioters, promising that those involved in the recent violence will face swift criminal sanctions. The riots, which erupted after a mass stabbing in Southport, have posed a significant challenge to Starmer's month-old government. The Prime Minister, a former chief state prosecutor, has emphasised that the law will be rigorously applied to both those directly involved in the violence and those inciting it online. His administration is determined to restore order and prevent further escalation of the unrest.
Hundreds arrested – The violence, which has been the worst in England since the 2011 London riots, has led to widespread damage and chaos across multiple cities, including Liverpool, Bristol, and Middlesbrough. Rioters have targeted mosques, hotels housing asylum seekers, and clashed violently with police, resulting in hundreds of arrests and numerous injuries.
The situation has grown so severe that the government has mobilised over 6,000 specialist police officers to be on standby, ready to respond to further outbreaks of disorder. The widespread nature of the unrest has also led to international travel warnings, with several countries advising their citizens to avoid affected areas in the UK.
False claims – The unrest has been largely fuelled by far-right groups, particularly those linked to the now-defunct English Defence League (EDL), an organisation known for its anti-islamic stance and connections to football hooliganism. The riots were triggered by rumours spread on social media, falsely claiming that the suspect in the Southport stabbing was a Muslim asylum seeker.
This misinformation rapidly spread online, inciting further violence. Authorities have pointed out that social media played a significant role in amplifying these tensions, with Interior Minister Yvette Cooper noting that it acted as a "rocket booster" for the violence. The situation has been further inflamed by figures like EDL founder Tommy Robinson and controversial comments by Elon Musk, leading to heightened tensions both within the UK and internationally.
The best of... 📚
- Business & Tech – Asian stocks rallied Friday as investors breathed a sigh of relief after US jobs data soothed concerns that the world's top economy could tip into recession, bringing a painful week to a positive end.
- Science & Environment – Swiss commodities giant Glencore announced Wednesday that it had decided against spinning off its coal business for now after consulting shareholders who view the polluting fossil fuel as a cash-generating activity.
- Entertainment – The Vienna leg of a tour by American mega-star Taylor Swift has been cancelled after Austria arrested an Islamic State sympathiser in connection with an attack plot, the organisers said Wednesday.
- Sport – With Tom Cruise widely predicted to engage in a death-defying stunt on the roof of the Stade de France, Sunday's Paris Olympics closing ceremony promises a memorable passing of the five rings flag to Los Angeles.
And in case you missed it... ⚠️
- Canine hero – In a remarkable display of cross-border collaboration, a Luxembourg rescue dog successfully located a missing suicidal woman in Germany, marking the second such life-saving mission within a week for the Red Cross canine team.
- Peace symbol – On the 79th anniversary of the attacks on Hiroshima and Nagasaki, Echternach honoured the victims by planting a ginkgo tree symbolising peace.
- Mobility – In response to a parliamentary enquiry, Mobility Minister Yuriko Backes has clarified that traffic mirrors are only installed after all other options to improve visibility at dangerous crossings have been exhausted.
- US presidential race –Tim Walz, Kamala Harris' vice-presidential candidate, has recently been revealed to have Luxembourgish roots, with his great-great-grandfather hailing from Kehlen, Luxembourg.
Your Weekly Recap is published every Friday at noon. Read earlier versions.
