Following the report presentation on Tuesday, finance minister Pierre Gramegna (DP) gave further explanations to MPs on Wednesday. He pointed out that there was no need to worry about public finances despite the size of public debt. The latter could amount to 19 billion euros next year, which corresponds to almost 30% of GDP.
Gramegna has indicated that a series of amendments, which he tabled in October, are to be included in the bill. In October, it was not yet known that fundamental health restrictions would have to be taken again, which would slow down economic activity. Nor was it known two months ago that a vaccine would be available so quickly. As a result, this is a period in which it is difficult to make predictions.
The hoped-for rapid economic recovery is not coming, regrets Gramegna. After a good third quarter, the fourth is proving to be bad. Brexit is causing problems: it is concering for the United Kingdom and it is bad for the European Union, and therefore also for Luxembourg, says the minister, but most of the players had prepared for it, he concludes.
Gramegna also highlighted positive developments. Statec has revised its projections and now envisages a decline in growth of 3.5% instead of 6% for 2020.
Because of the additional expenditure generated by the health crisis, the central government deficit is expected to increase by around €191 million next year to €2.7 billion.
The ten most important amendments were presented on Wednesday. These include the release of an additional €30 million to finance the new measures announced under the Recovery and Solidarity Fund for Business.
In total, this amounts to €180 million to cover the fixed costs of businesses. Short-time working will be extended until 30 June 2021. Additional aid will be granted to artists and the self-employed. €20 million is planned to help the most vulnerable companies to compensate for the 2.8% increase in the social minimum wage.
Another amendment concerns the reimbursement by the State of 386 million euros over four years to the National Health Fund for the financing of family leave, family support leave and financial compensation.
A budget extension of 500,000 euros is planned to strengthen the CGDIS, the Grand Ducal Fire and Rescue Corps, in order to make hospitals operate more efficiently during the pandemic.
The repercussions of the pandemic will still have to be dealt with for some time, but the vaccine in particular gives hope that the crisis will soon be overcome. This vaccine, which will be distributed free of charge, will cost the state around €16.5 million.
