The Chamber of Employees (CSL) presented its assessment of the government’s 2026 draft budget on Thursday, arguing that the state should intensify its efforts to combat poverty and characterising its planned defence spending as excessive.
In its official opinion, the CSL concluded the government is missing a key political opportunity. The employee representatives criticised the significant increase in defence expenditure, contrasting it with stagnating funding for housing and a decline in funds for the ecological transition – a set of priorities they find “incomprehensible”.
The Chamber challenged the government’s “alarmist” messaging on public finances, pointing out that Luxembourg is projected to have the lowest public debt in the European Union next year. Conversely, it noted the country’s poor performance on poverty metrics, including child poverty and in-work poverty.
CSL President Nora Back lamented the absence of clear, ambitious government announcements to address these social issues.
While the Chamber’s director, Sylvain Hoffmann, welcomed the increase in a tax credit to offset the CO2 tax, he argued the income threshold to benefit from it should be raised, as wage inflation is making fewer taxpayers eligible.
The CSL also reiterated its call for greater tax justice, specifically by increasing – or finally introducing – taxes on capital income and wealth.
On employment, the Chamber attributed the current slowdown to reduced business investment, stating that continued state recruitment is therefore a positive measure. It also voiced criticism over the proliferation of fixed-term employment contracts.
When questioned on whether Luxembourg’s national budget is financed through international injustice via its financial centre, Vice-President Jean-Claude Reding offered a systemic critique.
“That would be the case even if it weren’t in Luxembourg”, he stated, concluding, “It’s the system of capitalism in general. We must therefore call this system into question.”
