Luxembourg has attracted over €2 billion in investment
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The Luxembourg government has carried out a large-scale bond issue, raising €2.5 billion on the capital markets. A similar amount was raised in October last year, but the terms of the current issue reflect the general tightening of financial conditions. The interest rate on the new ten-year bonds stood at 3.125%, which is higher than the autumn figure of 2.9%.
The main aim of raising funds is to replenish liquidity reserves against the backdrop of a projected budget deficit of €1.49 billion this year. As a result of this operation, Luxembourg’s public debt ratio has risen to 28.4% of GDP, whereas it was forecast at 27% when the 2026 budget was presented. Nevertheless, as noted by André Bauler, Vice-Chair of the Finance Committee, the debt burden remains below the critical threshold of 30% of GDP — a strategic limit set by the government to maintain financial stability.
Investors’ keen interest in the securities of the Grand Duchy stems from its unique position on the global stage:
