The economy and finances took centre stage during a recent ministerial trip to Spain, though the visit unfolded against the backdrop of the ongoing war in the Middle East and significant geopolitical tensions.
At a press conference organised in Madrid on Thursday evening, Deputy Prime Minister and Minister of Foreign Affairs Xavier Bettel opened by stressing that the situation in the Middle East must not be underestimated. He described it as “an escalation that will lead to further tensions.”
Bettel noted that several countries in the region are invoking their “right to self-defence,” a development he suggested does not point to swift de-escalation.
For Luxembourg, the priority in this volatile context is ensuring European unity. Bettel emphasised that the strength of the European Union lies in the fact that 27 countries stand as one. In his view, the recent events have once again demonstrated the importance of a common European foreign policy.
Regarding the evacuation and support of Luxembourg citizens abroad, the Foreign Minister stated that while the government is “not a travel agency,” it would nonetheless examine how it can assist its citizens.
Minister of the Economy and Energy Lex Delles focused on the necessity of greater European resilience, particularly in the energy sector. For him, it is clear that Europe must strategically secure its energy supply.
“If Europe wants to be more resilient, we must be able to achieve progress on hydrogen and renewable energies,” Delles said. This imperative, he explained, is why the government seeks to make cooperation with Spain in this area more concrete. On Thursday, a memorandum of understanding was signed in the green hydrogen sector, focusing on developing a European infrastructure to enable the production and transport of green hydrogen through Spain, France, and Germany to Luxembourg.
A separate memorandum of understanding was signed in the space sector, aimed at strengthening cooperation between companies, research centres, and national programmes. The agreement covers, among other areas, earth observation technologies and the processing of satellite data, with the goal of bolstering European expertise and creating new economic momentum.
Spain remains an important partner for Luxembourg, particularly in the financial sector, according to Finance Minister Gilles Roth.
Roth noted that approximately 115 banks are active in Luxembourg, including six major Spanish banks. He further highlighted that over €30 billion are deposited in around 70 Spanish funds operating out of the Grand Duchy.
Roth described the delegation as “fortunate” to have met with several owners and CEOs of banks during the trip. He stated that all provided “very positive feedback” and confirmed their intention to continue basing their European operations out of Luxembourg alongside their domestic business in Spain.
The minister also pointed to the strong flow of investment in the opposite direction, noting that 72% of international funds investing in Spain originate from Luxembourg. For Roth, this represents a clear sign of a mutually beneficial and functioning partnership.
Highlighting the sector’s importance to the national economy, Roth noted that 25% of Luxembourg’s economic output comes from the financial and banking sector. As such, he believes that maintaining a strong international network is essential for the country’s continued prosperity.
