Your Weekly Recap for 2–6 December.
Here are five things you should know at the end of this week:
- STATEC confirms no wage indexation until 2025 amid falling prices
- Government earmarks €171 million to offset rising electricity costs
- Paralympic milestone, stellar performances honoured at 2024 Sports Gala
- Macron defiant as French PM Barnier ousted in historic no-confidence vote
- South Korea's President faces impeachment vote after failed martial law push
1. STATEC confirms no wage indexation until 2025 amid falling prices
Luxembourg's inflation rate dropped to 1.6% annually in November, delaying the next wage indexation to 2025, according to STATEC.
- Lower travel costs and a 7.2% decrease in gas prices significantly contributed to the decline in inflation.
- Wage indexations, triggered by a 2.5% rise in the consumer price index, ensure purchasing power is maintained, with the last adjustment made on 1 September 2023.
Inflation stable – Luxembourg's annual inflation rate for November decreased to 1.6%, down from 1.0% the previous month, as reported by the National Institute of Statistics and Economic Studies (STATEC). This persistent decline has postponed the next wage indexation to 2025. STATEC director Tom Haas had previously anticipated this delay, citing the low inflation environment as a key factor, with a detailed analysis expected in a report scheduled for 20 December.
Seasonal shifts – STATEC attributed the decrease in inflation primarily to a significant drop in travel costs and gas prices in November. Gas prices fell by 7.2%, while holiday travel expenses saw a 12.6% reduction compared to the previous month. Additionally, airfare costs dropped by 14.5% since October and 3.9% compared to November 2023. These price reductions provided relief to consumers, demonstrating the impact of global economic conditions and seasonal shifts on Luxembourg's inflation dynamics.
Purchasing power up – Wage indexations in Luxembourg are tied to the consumer price index, which must rise by 2.5% compared to the previous adjustment to trigger the next increase. These adjustments are designed to shield residents from inflation by preserving their purchasing power. Despite recent economic challenges, purchasing power has continued to grow, supported by these mechanisms. The last indexation occurred on 1 September 2023, following several adjustments over the past two years, ensuring stability for households amid fluctuating economic conditions.
2. Government earmarks €171 million to offset rising electricity costs
The Luxembourg government has allocated €171 million in subsidies for households consuming less than 25,000 kWh annually to offset rising electricity costs, effective throughout 2025.
Despite these subsidies, many households will face higher electricity bills due to increased grid costs and a reduced energy price cap, with electric car owners being particularly affected.
Opposition MPs have criticised the timing and messaging of the changes, while Energy Minister Lex Delles defended the measures, highlighting efforts to optimise consumption and maintain price caps.
Concrete measures – The Luxembourg government has earmarked €171 million to help households manage rising electricity costs in 2025. These subsidies will automatically apply to households consuming less than 25,000 kWh annually, providing financial relief to a significant portion of the population. The initiative includes examples of the state's contributions, such as €110 for a flat consuming 1,500 kWh annually and €520 for a single-family home using 7,000 kWh, including charging an electric car.
Price hikes unavoidable – Despite the subsidies, many households will still experience increased electricity bills due to higher grid costs and a halved energy price cap. For instance, a single-family home using 7,000 kWh annually will see an overall increase of around €400 even after the state's contribution. Owners of electric cars and heat pumps are particularly affected, as they face unique challenges in balancing energy costs with the new pricing structure. Consumers are encouraged to spread their energy usage throughout the day to mitigate price hikes, as peak usage may lead to higher costs.
Opposition criticism – Opposition MPs, including Joëlle Welfring (Déi Gréng) and Georges Engel (LSAP), criticised the government's decision to reduce the energy price cap, arguing that it sends a poor message at a time of rising costs. They also expressed concerns about the timing of these changes, which could exacerbate financial pressures on households. MP David Wagner (Déi Lénk) added that practical constraints might prevent consumers from effectively adjusting their consumption patterns. In response, Energy Minister Lex Delles defended the measures, noting that the Luxembourg Regulatory Institute (ILR) independently developed the new price structure over the past two years and emphasised that Luxembourg remains one of few countries maintaining energy price caps.
3. Paralympic milestone, stellar performances honoured at 2024 Sports Gala
© Valentin Wagner
Patrizia van der Weken was named Sportswoman of the Year for the second consecutive time, following her record-breaking performances and Olympic semi-final qualification.
Paralympic bronze medalist Tom Habscheid made history as the first Paralympic athlete to win the title Sportsman of the Year.
The women's national basketball team and coach Arnaud Starck were honoured as Team of the Year and Coach of the Year, respectively.
Sportswoman of the Year – Patrizia van der Weken, one of Luxembourg's most celebrated sprinters, once again claimed the title of Sportswoman of the Year. This recognition comes as no surprise, given her exceptional achievements on the track in 2024. Van der Weken is the national record holder in both the 100m and 200m sprints and delivered a stellar performance at the 2024 Paris Olympics, where she reached the semi-finals in the 100m dash.
Sportsman of the Year – Tom Habscheid achieved a historic milestone by becoming the first Paralympic athlete to be named Luxembourg's Sportsman of the Year. The shot putter's remarkable bronze medal performance at the 2024 Paralympic Games highlighted his dedication and excellence in sports.
Team and Coach of the Year – The women's national basketball team was awarded the prestigious title of Team of the Year, reflecting their collective hard work, strategy, and successful campaigns that have elevated the team's standing in Luxembourg sports. Complementing their success, Arnaud Starck was named Coach of the Year, recognising his leadership and vision in guiding Luxembourg's athletics team to new heights.
4. Macron defiant as French PM Barnier ousted in historic no-confidence vote
Outgoing French PM Michel Barnier gestures after the result of the no-confidence vote on his administration at the National Assembly in Paris on 4 December as French MPs voted to oust his government after just three months in office in a move which deepens a political crisis in the country. / © AFP
French Prime Minister Michel Barnier's government was ousted in a historic no-confidence vote, marking the first such event in over 60 years and extending political turmoil in France.
President Emmanuel Macron rejected calls to resign, vowed to appoint a new prime minister to form a "government of general interest", and criticised the hard-left and far-right for creating instability.
France faces growing unrest with looming public-sector strikes, a delayed budget, and Macron preparing to host world leaders at Notre-Dame's reopening this weekend amid a deepening political crisis.
Political limbo – Prime Minister Michel Barnier's administration was toppled after just three months in office through a no-confidence vote backed by both the hard-left France Unbowed (LFI) and the far-right National Rally. This historic event, the first successful no-confidence motion in over 60 years, came after a contentious debate over austerity measures in the 2025 budget. The government's collapse underscores the instability of the National Assembly, which has been deeply divided since snap elections earlier this year resulted in a hung parliament. Barnier's resignation leaves France in a state of political limbo, further exacerbated by the lack of a clear majority coalition.
Macron defiant – Despite mounting pressure from opposition leaders and public sentiment – polls show a majority of French citizens favour his resignation – President Macron has refused to step down. In a national address, he affirmed his commitment to completing his five-year mandate, criticising an "anti-republican front" for orchestrating the political crisis. Macron emphasised his resolve to appoint a new prime minister who will focus on passing a budget and stabilising the government. However, the task of finding a successor willing and able to navigate the fractured political landscape remains daunting, with potential candidates facing similar challenges as Barnier.
Market nervousness – The political upheaval comes at a precarious time, as public-sector unions prepare for widespread strikes against cost-cutting measures, threatening to disrupt schools, transportation, and air traffic. The budget impasse further complicates France's economic outlook, while uncertainty over Macron's leadership adds to market nervousness. Amid this turmoil, Macron must also host world leaders, including US President-elect Donald Trump, for the grand reopening of Notre-Dame Cathedral – a high-profile event intended to showcase France's resilience. This juxtaposition of international diplomacy and domestic unrest highlights the precarious balancing act facing the French government.
Frieden reacts – In a first statement since the historic vote, Luxembourg PM Luc Frieden has lamented the political instability in the Greater Region, expressing hopes that the Grand Duchy's neighbouring countries can soon form stable governments again and pointing to Luxembourg's dependence on France, Germany, and Belgium.
5. South Korea's President faces impeachment vote after failed martial law push
Members of the Korean Confederation of Trade Unions hold placards reading "Step down Yoon Suk Yeol who led the insurrection!" with a picture of Yoon during a rally calling for the impeachment of President Yoon Suk Yeol in front of the ruling People Power Party headquarters in Seoul on 6 December. / © AFP
South Korean President Yoon Suk Yeol this week declared martial law citing threats from North Korea, but it was swiftly overturned by lawmakers after dramatic parliamentary scenes and widespread protests.
Opposition lawmakers have filed an impeachment motion against Yoon, accusing him of unconstitutional actions to evade investigations into alleged personal and family misconduct, with a vote set for Saturday.
Yoon's ruling party is divided, public disapproval has reached a record low of 13%, and investigations are underway into accusations of insurrection and potential plans for a second martial law attempt.
Martial law repealed – In an unprecedented move, President Yoon Suk Yeol declared martial law late Tuesday, citing national security threats from North Korea and "anti-state forces". The decree, which banned political activities, protests, and strikes, marked the first imposition of martial law in South Korea in over 40 years, raising concerns both domestically and internationally. The decision led to chaos as lawmakers, aided by staffers, defied armed soldiers to enter parliament and vote down the measure. Thousands of protesters gathered in freezing temperatures outside the National Assembly, demanding Yoon's resignation, and the decree was eventually repealed after six hours of unrest.
Impeachment pending – Following the repeal of martial law, opposition lawmakers accused Yoon of attempting to evade investigations into alleged corruption involving himself and his family. They filed an impeachment motion, citing violations of the constitution and insurrection. With the opposition holding a majority in the National Assembly, the motion requires only minimal defections from Yoon's People Power Party (PPP) to secure the two-thirds vote needed for impeachment. If passed, Yoon would be suspended pending a Constitutional Court review, and new elections would be required if the court upholds the impeachment. Meanwhile, public anger remains high, with over 73% of citizens supporting impeachment, according to recent polls.
Investigations launched – The fallout from Yoon's martial law declaration has fractured his own ruling party and sparked legal and political challenges. Initially vowing to block impeachment, PPP leaders have since expressed concerns about the president's ability to govern and the risks of another martial law attempt. Investigations into Yoon and top officials for insurrection are underway, with security footage and testimonies suggesting plans to arrest opposition leaders and use military force to suppress dissent. International allies, including the United States, expressed alarm at the events, further isolating Yoon. His approval rating has plummeted to a record low of 13%, with calls for his resignation echoing across the political spectrum.
The best of... 📚
- Business & Tech – Bitcoin shot past $100,000 for the first time on Thursday, taking the limelight away from stock markets that wavered as investors tracked political crises in France and South Korea.
- Science & Environment – A powerful earthquake that struck off the coast of California sparked a brief tsunami warning on Thursday, with residents warned to flee to higher ground before the alert was cancelled.
- Entertainment – The Cameroonian curator Koyo Kouoh has been appointed the first African woman to lead the Venice Biennale, one of the world's most important contemporary art shows.
- Sport – Lewis Hamilton this weekend bids farewell to Mercedes, the team that carried him to six world titles, as his future outfit Ferrari seek to win a first constructors' crown in 16 years.
And in case you missed it... ⚠️
- Healthcare – Luxembourg's government plans to nationalise the country's blood donation system while introducing a landmark reform allowing homosexual men to donate blood for the first time.
- Tech-savvy heiress – German police have arrested three suspects in connection with a €2.5 million burglary targeting Emma-Lou Becca, the 21-year-old daughter of Luxembourg tycoon Flavio Becca, thanks to her use of Bluetooth tracking.
- Labour woes – Workers at the bankrupt Liberty Steel plant in Dudelange face uncertainty before the holidays, as they may receive part of their salary but will have to do without end-of-year bonuses.
- Education – Lycée Technique de Lallange in Esch-sur-Alzette this week restricted restroom access for its 1,600 students to curb widespread vandalism, sparking mixed reactions among the school community.
Your Weekly Recap is published every Friday at noon. Read earlier versions.
