MPs in the Chamber of Deputies were briefed on Wednesday by key ministers about the ongoing Caritas scandal, as the government faced increased pressure to find solutions for affected projects.

On Wednesday, seven parliamentary committees convened for two hours to receive updates on the latest developments in the Caritas scandal.

Read also: New contracts for staff: 'Chaotic transition' as Caritas becomes HUT in wake of embezzlement scandal

Prime Minister Luc Frieden, Minister for Foreign Affairs and Development Cooperation Xavier Bettel, Minister of Education Claude Meisch, and Minister for Family Affairs Max Hahn informed MPs about the ongoing situation.

Cooperation Ministry seeking solutions for Caritas projects abroad

Following the meeting, Foreign Minister Xavier Bettel clarified that the state could not act as "comprehensive insurance" in cases of theft but reaffirmed the government's commitment to supporting the poorest communities. LuxDev, Luxembourg's national development agency, has been tasked with assessing whether it can assume responsibility for certain Caritas projects. Discussions are also underway with other organisations to explore options for sustaining these initiatives.

In South Sudan, for instance, the government is working with Caritas Netherlands to extend a project for another year, giving officials time to find a new provider. Both opposition and majority MPs have stressed the importance of continuing this work. While Bettel did not name specific organisations, he revealed that the government had already held talks with NGOs that initially expressed interest in taking over the project but later withdrew their offers. Despite this setback, Bettel assured that the government "will do everything possible" to keep the projects running.

Bettel also confirmed that the government is planning to assist organisations impacted by Caritas' collapse.

In recent days, Caritas informed officials about "potential collateral damage," indicating that three associations working on government-funded projects in various countries are at risk of closure without additional support. In response, Bettel's ministry is working to secure a temporary budget of €200,000 to aid these associations, which provide assistance to Ukrainian refugees in Moldova, deliver aid in Mali, and support earthquake relief efforts in Turkey. "We are evaluating how to maintain this support," Bettel stated.

Preliminary figures suggest that approximately €4.7 million of the funds provided by the Ministry of Foreign Affairs and Development Cooperation for Caritas' international projects have been lost due to the embezzlement.

State to ensure liquidity to wind down Caritas operations

Caritas is expected to properly wind down its activities, according to Prime Minister Luc Frieden, with a small number of employees remaining to settle the necessary accounts.

Frieden explained that, as the organisation continues to provide services for which it receives monthly payments, the government may still owe Caritas "some money". To support this process, the government has offered a "small transition loan."

Since the government cannot directly provide these funds due to banking constraints, the state will act as a guarantor for a loan that Caritas can secure until the end of the year. This loan, guaranteed by a mortgage on Caritas properties, is intended to ensure the organisation can pay the remaining employees responsible for closing its operations.

By mid-October, the state is expected to owe Caritas around €4 to €5 million for its services, which will likely offset the loan guaranteed by the government for employee payments.

Government committed to preserving Caritas' "political voice"

Prime Minister Frieden emphasised that the government has never viewed Caritas' political advocacy as a criticism but rather as "a valuable voice from the social sector." He expressed the government's intention to support the employees who were not transferred to the new organisation, Help on the Ground (HUT). The Prime Minister noted that the government had only recently worked with these employees on child poverty issues.

Specifically, two former employees of Caritas' political advocacy department are under consideration. Frieden underscored that "all of these voices are needed in our country" and that efforts are underway to determine if they can be integrated into ongoing initiatives aimed at reducing child poverty and conducting social analyses. He expressed optimism that Caritas' political advocacy work will continue in Luxembourg.

Frieden did not comment on whether Caritas employees should have been transferred to HUT under standard company transfer regulations or if terminating and renegotiating their contracts was appropriate. He noted that this matter is now in the hands of the competent court.

Read also: Union raises concerns: Majority of Caritas employees transition to new employer HUT

Opposition bewildered by government's shift on Caritas

MP Djuna Bernard of the Green Party (Déi Gréng) attributed recent government announcements to pressure from both the opposition and the media.

Bernard pointed out that just two weeks ago, the government did not feel responsible for preserving Caritas' political advocacy department. She noted a shift in the stance of Foreign Minister Xavier Bettel, commenting that the minister "is slowly becoming aware of his significant responsibility." Bernard also expressed relief that the government is now seeking solutions for those at risk of requiring a social plan.

The opposition was generally surprised by the sudden availability of funds to support Caritas. MP Taina Bofferding, head of the Luxembourg Socialist Workers' Party (LSAP) parliamentary group, criticised the process for lacking transparency.

Bofferding referenced Prime Minister Luc Frieden's earlier statement from late July that "not a single euro" would be paid to Caritas and questioned why the announcement of a transition loan could not have been made earlier. She suggested that an earlier announcement might have eased tensions. While Bofferding welcomed the fact that Caritas can now pay its bills, she criticised what she saw as "the muddled way decisions are made without transparency."

MP Marc Baum of the Left Party (Déi Lénk) echoed Bofferding's concerns, describing the entire situation as "a disaster."

Opposition criticises absence of labour minister

Amid criticism over the handling of Caritas employees' contracts now taken over by HUT, several MPs had expected answers from Minister of Labour Georges Mischo, who was notably absent.

MP Marc Baum expressed disappointment, remarking that Mischo, who also serves as Minister of Sport, "is skilled in two sports: backpedalling and vanishing." Baum stressed that the issue is clearly a matter for the Inspectorate of Labour and Mines (ITM) and has been looming for several days. He noted that he had prepared "a series of questions" for the labour minister and called Mischo's absence "unacceptable during such a severe social conflict."