RTL Today - Your Weekly Recap: Rent law controversy, new Caritas, and German far-right wins state election

Your Weekly Recap for 2–6 September.

Here are five things you should know at the end of this week:

Luxembourg's revised rent law sparks controversy
Frieden announces creation of 'new Caritas'
European School in Kirchberg implements mobile phone ban
Germany's far-right AFD wins first regional election
Michel Barnier named Prime Minister of France

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1. Luxembourg's revised rent law sparks controversy

The implementation of Luxembourg's updated rent-and-lease law on 1 August has ignited debates, with Homeowners' Union President Georges Krieger warning that the changes could worsen the housing market.
The reform includes mandatory sharing of agency fees, a cap on rental deposits, and the requirement for all lease contracts to be in writing, sparking criticism from landlords and housing experts.

Krieger highlights the impracticality of some changes, particularly the framework for flat-sharing, which he claims was poorly thought out and copied from Belgium's failed model.

Key changes – Agency fees will now be split equally between tenants and landlords, whereas previously, tenants were responsible for the full amount. Additionally, tenants will only need to provide a security deposit equivalent to a maximum of two months' rent, reduced from three months.

New provisions also outline how security deposits should be returned when moving out. For example, landlords are required to refund half of the deposit within a month if no significant damage is reported.

The reform also provides a legal framework for co-rentals or shared apartments, and mandates that all rental agreements must be documented in writing, rendering verbal contracts legally invalid.

Agency fees – The new requirement for sharing agency fees could result in agencies setting high, fixed charges rather than the traditional percentage-based commissions, potentially increasing costs for renters. Critics argue that the law may undermine the previously "peaceful" rental climate, and some provisions, like the legal rent cap, remain untouched, sparking doubts over enforcement.

Concerns – Experts, including Michel-Edouard Ruben, express concerns that while the reform targets tenant protections, it could lead to unintended complications for both landlords and renters. The requirement for written contracts could invalidate long-standing verbal rental agreements, leading to legal complications, especially within families.

Provisions like potential caps on returns from invested capital might deter new property development by making it less financially attractive for investors, potentially slowing down housing supply growth.

2. Frieden announces creation of 'new Caritas'

Prime Minister Luc Frieden unveiled plans to overhaul Caritas' management structure amid a €60 million embezzlement scandal, focusing on maintaining essential services.
Frieden announced the creation of a "new Caritas" to manage crèches, drop-in centres, and support for vulnerable populations, with government oversight and new agreements expected by October.
The Prime Minister assured that the Luxembourg State has not lost money in the scandal, clarifying that the embezzled funds were sourced from NGO reserves and bank credit lines.

Embezzlement –The scandal involved €60 million, with €30 million from NGO reserves and €30 million from credit lines. The NGO had used anticipated government payments to secure the final sum.

Not 'a single euro' –Earlier in July, Frieden explained that the government had no trust in Caritas' structure and emphasised the need to protect taxpayers' money. The government was demanding a contact person from Caritas to address practical concerns, such as appointing a provisional administrator.

Systemic weaknesses –Frieden called on other NGOs to review their systems and report anomalies, and urged the Financial Sector Supervisory Commission (CSSF) to address systemic weaknesses.

Frieden expressed his anger and bewilderment at the scale of the embezzlement, acknowledging that the situation was as shocking to him as it was to the public. "We will do everything in our power to recover this money," he stressed.

In other news: During the speech, Frieden announced a public consultation on pensions for autumn, involving various stakeholders and a platform for citizen input. A report will be prepared in early 2025 to guide future pension system decisions.

3. European School in Kirchberg implements mobile phone ban

The European School in Kirchberg has banned mobile phones on its premises starting Wednesday, aiming to address concerns over screen addiction among students.
Younger students (1st to 3rd year) must leave their phones in lockers, while older students (4th to 7th year) can carry their phones but not use them on school grounds, with designated areas for phone use.
The ban seeks to mitigate issues such as concentration problems, social isolation, and cyberbullying, and to encourage more face-to-face interactions among students.

Mixed reactions – The decision followed a year of consultations with teachers, parents, students, and psychologists. While parents support phone use for travel to school, students expressed mixed reactions to the ban.

To be discussed nationally –The thorny subject of smartphone use at school is in the spotlight after a public petition calling for the ban on the devices once students enter the school grounds has reached the 4,500-signature threshold.

The ban aligns with a growing trend in Nordic countries and neighboring Luxembourg schools, reflecting broader concerns about screen time and its effects on student well-being.

Test year – The effectiveness of the ban will be assessed at the end of the 2024-2025 school year, with potential adjustments based on its impact.

4. Germany's far-right AFD wins first regional election

The far-right Alternative for Germany (AFD) won its first state election in Thuringia, securing between 30.5 and 33.5% of the vote according to exit polls.
The AfD's win comes as a blow to Chancellor Olaf Scholz's coalition government, with his SPD polling at just 6.5-7% in Thuringia.
Though other parties refuse to form a coalition with the AfD, this result signals a significant shift in Germany's political landscape.

Historic win –The AFD's victory in Thuringia marks the first time a far-right party has won a regional election in Germany since World War II. This is significant as it signals a major departure from the post-war consensus in German politics, which has largely excluded far-right parties from power.

Thuringia has historical significance as it was one of the early strongholds of the Nazi Party in the 1930s, adding weight to the symbolic nature of the AfD's win.

A blow to the government –Chancellor Olaf Scholz's coalition, made up of the Social Democrats (SPD), the Greens, and the Free Democrats (FDP), saw poor results in the regional elections, especially in Thuringia, where the SPD scored only 6.5-7%.

The Greens and FDP fared even worse, with scores lower than the SPD, raising questions about the viability of the coalition government leading up to the national elections in 2025.

This weak performance can be attributed to growing voter dissatisfaction with the government's handling of key issues, particularly immigration and foreign policy, which the AfD has capitalized on.

AFD surge –The AFD's rise has been largely fueled by discontent over immigration, particularly in the wake of incidents such as the recent knife attack in Solingen. Many voters feel that the government has not adequately addressed concerns about migration and security.

The party has also benefited from skepticism regarding Germany’s support for Ukraine in the ongoing conflict with Russia, with many voters in the eastern regions opposing military aid and sanctions.

Key leaders like Bjoern Hoecke and Alice Weidel have used these issues to rally support, presenting the party as a defender of German national interests and the only force capable of bringing about political change.

5. Michel Barnier named Prime Minister of France

Michel Barnier, former Brexit negotiator, named Prime Minister of France after a 60-day delay following legislative elections.
Barnier, 73, now holds the title of the oldest French Prime Minister, taking over from Gabriel Attal, the youngest at 35.
His main task will be to form a government that can survive parliamentary scrutiny in France's hung National Assembly.

Political crisis –Barnier’s appointment comes amid one of France's most severe political deadlocks, with no majority in parliament after July’s elections.

The National Assembly was divided into three main factions: the left-wing coalition, Macron's centrist group, and the far-right National Rally (RN). Without a majority, Macron struggled to govern, delaying the appointment of a new Prime Minister by 60 days.

This unprecedented post-WWII uncertainty has raised concerns of prolonged instability, with any new government vulnerable to parliamentary censure.

Politically acceptable –Macron's choice of Barnier as Prime Minister was strategic to avoid a swift no-confidence vote. Previous candidates like Xavier Bertrand and Bernard Cazeneuve risked opposition from both the left and far right.

Barnier, a seasoned politician and former EU commissioner, is viewed as more politically acceptable, appealing to a broader range of parliament members to maintain balance in the National Assembly.

Rassemblement national –Marine Le Pen’s National Rally is key, as it might refrain from blocking Barnier’s government formation. RN leader Jordan Bardella signaled that they would judge Barnier on his actions in office, suggesting a more pragmatic approach than outright opposition.

The best of... 📚

Business & Tech – Elon Musk's woes are hardly limited to Brazil as he now risks possible EU sanctions in the coming months for allegedly breaking new content rules.
Science & Environment – Former Volkswagen CEO Martin Winterkorn faced trial on Tuesday for his alleged role in the 'dieselgate' scandal, where VW was found to have rigged emissions tests in millions of vehicles, a controversy that has cost the company billions and could see Winterkorn jailed for up to 10 years if convicted.
Entertainment – The British government has said it will probe surge pricing after furious Oasis fans faced huge hikes in ticket prices for the Britpop band's much-anticipated reunion.
Sport – Ugandan Olympian Rebecca Cheptegei has passed away from severe burn injuries after her boyfriend allegedly doused her with petrol and set her ablaze at her home in Kenya. Her death is the latest in a string of tragic incidents involving female athletes.

And in case you missed it... ⚠️

New report – Recent data from STATEC indicate a continued decrease in Luxembourg's annual inflation rate, driven by changes in consumer prices.
EU aviation policy – The Ministry of Mobility has refuted claims made by the LCGB union, asserting that flight safety is not at risk following a recent announcement from the EU aviation authority.
Public harvest – The Ministry of Agriculture's 'Yellow Ribbon' campaign, now supported by 64 municipalities, aims to reduce fruit waste by identifying trees whose fruit can be picked by the public.
Top 15 – Another STATEC report has revealed that Porto, Lisbon, and Frankfurt were the top three flight destinations from Luxembourg's Findel Airport in 2023, with Porto significantly leading the list as a favourite among travellers.

Your Weekly Recap is published every Friday at noon. Read earlier versions.