Luke Frieden: "We have an obligation to tell the truth."

Every year Luxembourg welcomes between 10,000 and 15,000 new expats. This mix of cultures is part of the national capital. Luc Frieden is convinced that the country's uniqueness lies in its ability to combine stability, economic growth, social justice and solidarity. But behind the façade of cosiness lie unresolved issues: poverty, ageing population, housing crisis. The Prime Minister speaks openly about them.

He is convinced: economic growth is a condition for the existence of the welfare state. That is why the government has raised the energy premium from the first months, increased the living allowance, and exempted the minimum wage from taxes. An anti-poverty plan is in the pipeline and will be presented before the end of 2025. The main goal is to modernise, but not to cut back.

Frieden recognises that even a job does not guarantee a way out of poverty, especially in a country with expensive housing. There are solutions: lower taxes, simplified procedures, incentives for construction. However, two key bills - on lease reform and a tax on unused land - are still at the preparation stage. The reason is legal complexity and mistakes of past governments. "Now we are striving for complete coherence," he says.

Frieden stated explicitly for the first time that the country's pension system is unstable in the long term. To avoid automatic cuts in the future, the government proposes to bring the actual retirement age closer to the statutory age of 65. Luxembourg is now the EU leader in early retirement. "We are not touching the age, we are asking people to stay on the market longer," the Prime Minister clarifies. One of the tools will be progressive retirement - part-time employment with a partial pension.

The final version of the reform is expected in the summer of 2026, despite the approaching elections.

In response to the unions' rebuke, Frieden admits: some statements have hurt him. He insists: "I am open to dialogue, even in case of disagreement. But this requires respect on both sides." The prime minister reminds that trade unions are an important partner in democracy, especially in matters concerning social policy and working conditions.

Speaking of multinationality, Frieden refers to Luxembourg as a "little UN". There are not two or three communities here, as in other countries, but dozens. This requires effort but offers unique opportunities. Culture and sport are ideal spaces for integration, says the prime minister, especially among children. Instead of alienation, there is mutual support.