OECD criticizes Luxembourg for failing to implement necessary reforms

The OECD has criticized Luxembourg for failing to implement necessary reforms amidst rising economic challenges exacerbated by global events, particularly the war in Iran, which has significantly increased fuel prices. The report highlights that nearly one in two workers in the country are cross-border commuters, making them vulnerable to rising costs. Despite government efforts, including increased taxes and a gradual restriction on early retirement, Luxembourg’s pension system faces long-term sustainability issues due to a shrinking workforce and a growing number of retirees. As public discontent rises, the OECD warns that the economic fallout stems from delayed domestic reforms rather than external shocks, emphasizing the need for urgent action to address transport and competitiveness issues.

Home Affairs Minister Léon Gloden has called for a return to “full force” within the Schengen Zone, emphasizing the importance of easing border controls amid ongoing discussions at an EU meeting in Kirchberg. Following Germany’s agreement to relax strict border measures with Luxembourg, Gloden noted the positive feedback on these changes but criticized the European Commission for responding late to concerns regarding internal borders. He expressed hope for progress on border controls linked to the upcoming EU asylum and migration package, which is set to be implemented June 12. Additionally, discussions remain about extending the protection status for Ukrainian refugees beyond spring 2027, though potential exclusions for certain demographics may complicate the process.

No trains will operate between Arlon and Luxembourg from July 4 to July 17 due to major maintenance work being conducted on this route, which serves many cross-border workers. During this period, alternative transport options will be provided, including SNCB buses on weekdays between Arlon and Kleinbettingen, and longer bus routes to Luxembourg on weekends. This disruption follows a previous rail closure around the Pentecost holidays, which also required replacement buses to accommodate passengers.