Critical questions persist regarding Luxembourg’s handling of the Mikhail Fridman affair, with Franz Fayot of the Luxembourg Socialist Workers’ Party (LSAP) voicing concerns over the government’s communication and decision-making.
Fayot, speaking on RTL’s “Invité vun der Redaktioun” following Prime Minister Luc Frieden’s recent appearance in the relevant parliamentary committee, criticised what he described as “short and laconic” responses from the government concerning the high-profile case.
Russian oligarch Mikhail Fridman is seeking $16 billion in damages from Luxembourg after his assets were frozen under European Union sanctions. While Fridman’s name has since been removed from the sanctions list, Fayot stressed that this does not necessarily mean the arbitration proceedings are over. He explained that the government assumes the legal basis for the case no longer exists, but there is “no guarantee” that the matter has been fully resolved.
Fayot also noted that Prime Minister Frieden’s responses to the committee, including questions on potential contacts with Fridman or his legal representatives, were brief. The LSAP MP announced that he would formally request access to the government’s legal opinions on the case, as such a decision cannot be taken on a whim.
Asked how the LSAP would have acted if still in government, Fayot insisted his party would not have supported removing Fridman from the EU sanctions list. He argued that doing so undermines European solidarity with Ukraine and sends a troubling message to EU partners, especially in Eastern Europe.
Fayot emphasised that the LSAP would instead have relied on the protection mechanisms within EU law, referencing a “No-Claims” provision in the EU’s 18th sanctions package from 2025, which aims to shield countries like Luxembourg from legal action by oligarchs such as Fridman.
He noted with concern that Prime Minister Frieden claimed to have no knowledge of this provision during Monday’s committee session.
Fayot rejected the suggestion that the LSAP would have accepted the financial risk for Luxembourg, characterising Fridman’s $16 billion claim as vastly exaggerated.
At the same time, he argued that by releasing Fridman’s assets, estimated at €5 to €6 billion, Luxembourg is surrendering a crucial bargaining chip. Fayot described Fridman as a key figure in the Russian economy with close links to the Kremlin.
Fayot called for a European-level discussion on collective liability. If sanctions are decided jointly, he argued, EU solidarity must also apply when a member state faces major compensation claims as a result.
He pointed to the Belgian case about the Russian assets held at Euroclear and warned that small countries with major financial sectors, such as Luxembourg, are particularly vulnerable to pressure from such lawsuits.
Fridman’s claim amounts to roughly half the Luxembourg state budget, Fayot noted, describing the large sum as a deliberate bargaining tactic. He finds it is reasonable to assume that Fridman’s strategy is to demand such a huge amount because he knows it can be used as leverage.
Turning to Thursday’s Chamber debate on Luxembourg’s policy towards Israel, Fayot called for concrete national measures. He argued that an urgent priority should be a full arms embargo, including dual-use goods with both civilian and military applications. According to Fayot, the government could enact such a measure without new legislation.
Furthermore, he proposed legal reforms to enable sanctions against individuals and institutions at national level. Alongside LSAP, the Greens, and the Left, Fayot also supports banning imports from illegal settlements in occupied Palestinian territories, especially the West Bank and East Jerusalem, arguing that recognising Palestine while trading goods from settlements is inconsistent.
Responding to Foreign Minister Xavier Bettel’s position that national sanctions would have only limited effect and be largely symbolic, Fayot rejected this argument as a pretext for inaction and an attempt to shift responsibility to the EU.
He pointed to Luxembourg’s economic ties with Israeli companies in technology and digitalisation, as well as imports, such as dates, and questioned whether the impact of national measures would really be as minimal as claimed.
He argues that we owe it to ourselves to act, because doing nothing is not an option. Citing the devastation in Gaza and the ongoing expansion of settlements, he insisted that Luxembourg’s small size is no excuse for inaction.
On the draft national budget, Fayot’s main criticism focused on the rising deficit. He questioned how the government plans to maintain fiscal balance while promising investments, social measures, and a planned tax reform that is expected to cost around €1 billion annually.
He noted that substantial expenses, such as public sector salaries, are difficult to cut. Fayot warned that spending too much now may lead to austerity in the next legislative period.
The main concern, he concluded, is that resources could be lacking for critical investments in climate and environment, affordable housing, public infrastructure, and services that benefit the entire population.
