Mr President, Ladies and gentlemen, On 20 October, the ...

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It makes us less happy when we're on the other side. Every party in ... And this political change, which Luxembourg is undergoing with our new. DP-LSAP-déi ...

Mr President, Ladies and gentlemen, On 20 October, the Luxembourg people voted. They did so earlier than expected going by our normal democratic rhythm. A procedure that is rather unusual in Luxembourg. A procedure that is nonetheless highly democratic. A procedure that, in this situation, has done our country more than good. On 20 October, the voters spoke. Some parties emerged stronger, others weaker. This makes us happy when we’re on one side. It makes us less happy when we’re on the other side. Every party in here has, at some point, stood on one or the other side – some more, some less often. And every party, every politician, knows that on both sides – majority and opposition – it is worth fighting for one’s values, ideas and convictions. This is living democracy. This is what should drive us in politics. Politics must not be reduced to aspects of force, magnitude and power. This results in important dimensions of politics being misconstrued. In fact, it is the common values, ideas and convictions, the shared desire to fight for these, that ensure policies are policies for the people. And this political change, which Luxembourg is undergoing with our new DP-LSAP-déi gréng government, is an expression of this. Following 20 October, from an arithmetic point of view, several coalitions were possible. But coalitions are not formed on the basis of arithmetic alone. 1

Coalitions are formed to achieve common goals that are founded on shared convictions. And this is what drove the DP, the LSAP and déi gréng. This coalition was formed by three parties, who consider themselves partners. This coalition was formed for a future project. For a political landscape characterised by openness, responsibility and cohesion. We will be building on the solid foundation left to us by the preceding governments and political majorities. A foundation, which my predecessor Jean-Claude Juncker lent a very strong hand in shaping, displaying a high level of conviction, courage and personal commitment, both in Luxembourg and in Europe. And this is why, from where I am standing now, I wish to extend my heartfelt thanks to him, to you Jean-Claude, for everything you, together with your successive government teams, have accomplished for our country. This is worthy of respect and recognition. Mr President, We are facing enormous challenges. The people are expecting clear answers. They want clarity regarding their future. Every party in here was aware of these challenges during the elections. These are challenges that we can handle and that we will handle. As a country, as a society, we must be united and we must be prepared and willing to shoulder our responsibilities, both towards our society today and the future generations of tomorrow.

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We must modernise the state and the economy, create employment, safeguard future prospects through sustainable policies in all areas, systematically tackle the new social challenges surrounding housing, education and energy poverty and update the rules of the game when it comes to our society. To achieve this, we have created a leitmotif, which governs our shared ministerial declaration: openness, responsibility, cohesion. It illustrates what the coming years are all about for us. It clearly states that we want to bring about change in our country. It underlines the need for us to be open to tackling new challenges with new ideas, the need for us to be willing to assume responsibility for both ourselves and future generations, the need for us, in all our desire for reform, to stick together so that nobody falls by the wayside. To carry on as before is not an option for us. This was also clearly stated by all three coalition partners in their respective electoral programmes. This was furthermore confirmed by us over the last few weeks in our coalition negotiations, which saw us engaged in many protracted and objective discussions. A strong and shared commitment to address the challenges facing this country: this is what unites us. We have the ambition to seek political renewal in our country, to modernise this country and to tackle the enormous financial challenges head-on. We want to achieve this on the strength of a common future-oriented project, as manifested in the coalition agreement you were presented with last Monday night. This coalition is peppered with commitments. I am sure you understand I cannot address every single point and so I will restrict myself to some of the key considerations. Mr President, 3

If we set ourselves the target of a spirit of openness, the latter will also be defined by its political method and clear targets. The political method we aspire to is built on openness, on good access to information, on debate and discussion. We want more participation, meaning we want to actively involve the people in the political decision-making process. We want to truly involve your Parliament, the social partners and civil society and to discuss with them the difficult issues and decisions that lie in store for us. We wish to engage in a constructive dialogue with them and as such are also prepared to strengthen their rights. Furthermore, we want to ask our citizens for their opinions – by means of referendums. Important reforms should not be imposed from the top down. Important reforms are made with the involvement of the people. In particular when they concern the way our society lives together. When they concern the very rights of the Luxembourg people. We want and seek a great socio-political debate here in our country. We don’t just want a referendum on the Constitution. But we feel that, in the run-up to this, important issues need to be discussed with the citizens. We want to further develop the democratic foundations of our country and to do so in discussion with the people. We do not want to simply accept boundaries that confine or obstruct the unfolding of democracy and our social coexistence, but rather subject them to critical scrutiny. Which is why we want the conditions governing the acquisition of Luxembourg nationality to be fairer, in particular concerning the level of linguistic proficiency required.

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Which is why we also want a discussion on the political rights of those who live in Luxembourg, both Luxembourgers and non-Luxembourgers. We feel we need to strengthen and develop these rights, because we are of the opinion that this will further our democracy. But we do not wish to make these decisions without consulting the people. Which is why we want to hold a referendum in 2015 on important issues in this context: In particular the extension of the political rights of non-Luxembourgers, voter participation for young people from the age of 16 and the issue of term limits on ministerial mandates are to be judged by the voters following in-depth discussions and subsequently incorporated into the constitutional revision. A further issue we wish to raise in this referendum concerns the funding of the clergy. We are of the opinion that there is an imperative need for such a debate in our society. And we are willing to hold this debate in a spirit of mutual seriousness and respect. Furthermore, we want to fundamentally restructure the relations between the religions and the state and render them more transparent. In schools, we want to replace religious studies as well as secular morality studies with a general moral education class. In doing so, we want to avoid school splitting children into two groups; school is meant to unite. Naturally, churches and religious communities shall remain free, in future also, to organise their education and, here too, school will be on hand to help solve any practical problems. We will be introducing these changes together with the teachers who teach these two courses, religious studies and secular morality studies, changes that will allow them to continue working in the schools. National Day we want to restructure by means of a central civil act. Naturally the Church will retain the right and the opportunity to hold a celebratory Te Deum. Nevertheless we feel it is important, in particular for National Day, to have an act that everyone, every religion in this country can identify with, which nobody feels excluded from, an act that reflects our country in its diversity and cohesion.

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It goes without saying that we want to discuss these reforms with all our partners, including the churches. Mr President, Confidence in the institutions is one of the greatest assets of a free society. This confidence has suffered, particularly in the last months. We have set ourselves the objective of restoring this confidence. The reasons for this loss of confidence are varied and complex. At the heart of it was undoubtedly the so-called secret service affair and the findings of the commission of enquiry report must be truthfully acknowledged and the archives accounted for, both scientifically and historically. As a result, though not exclusively, of the secret service affair, a pretty much widespread feeling started emerging among the people that possibly there were individuals within the state who had more rights than others. This is a very dangerous feeling. And here we must draw clear conclusions: this is why, in addition to clear rules and procedures, we also want to introduce deontology codes on all levels of public administration and the municipalities, to make it even clearer what the rights and duties are of those responsible within the state. Confidence also evaporates when cooperation between institutions fails. We therefore want to bring the procedures between the institutions and within the institutions in line with 21st-century requirements: Parliament is to be given means so it can be assisted by experts in the conduct of its control function. Your majority factions will be submitting proposals to strengthen Parliament’s control rights when it comes to the government and in particular to facilitate the conditions governing the establishment of a commission of enquiry. We also want to clarify the procedures regarding the trust issue between Parliament and the government in the context of the constitutional revision. Furthermore, we want to reform the Council of State and in particular its appointment procedure. We must strengthen the role of the justice system to ensure it can carry out its duties in complete independence. We therefore propose to introduce a 6

Conseil National de la Justice (National Council of Justice), which will monitor the independence of the judicial authorities. The public prosecution office is to be reformed to guarantee its independence from the political authorities. Trust is also lost when people get the feeling the state is hiding something, is withholding information from them or they cannot see what is happening with their records or their personal data even. We want to change this and strengthen the rights of citizens. We want to subject the so-called Information Act to scrutiny once again and improve access to public information for citizens and the press. In addition, we want to proceed with a systematic digitalisation of the state apparatus to ensure a more straightforward, efficient and transparent collaboration with people and businesses in future. We want to guarantee citizens secure, uncomplicated and autonomous dealings with electronic data and to this effect we are happy to strengthen the national data protection commission while championing high European and international safety standards. In addition to this, we aspire to a new culture in data handling. People should in future be able to reconstruct and check who within the state accessed their data and for what purpose. Civil servants themselves are to be systematically familiarised with correct data handling and issues of data safety. Alongside the state institutions, the country’s municipalities of course also play a key role, in particular since they are the ones who are in close daily contact with our citizens. To improve their autonomy, we want to recast the role of the Ministry of Home Affairs. We want to analyse and restructure the principles of proportionality and subsidiarity, the scope of ministerial control and ministerial double control, the criteria governing municipal subsidies and the establishment of an electronic administration. Municipal missions must also be adapted to 21st-century challenges and restructured. Consequently municipal finances must also be redrafted. The reforms that I have just listed are extremely important for our country, because they strengthen our institutional foundation and bring the institutions, their functioning and their inherent regulations in line with the expectations that people justifiably have of them these days. 7

Institutions too must move with the times. If they fail to do so, they risk losing the acceptance and confidence of the people. Mr President, Confidence is, however, also placed by us in the people themselves. We believe that they themselves – not others for them – make the best decisions. And it is not up to us or up to anyone else to pass judgment on these decisions. A modern country calls for an open and tolerant approach with regard to these issues. A modern country guarantees that its people can decide and live autonomously and freely. And this is why we also want to pursue a policy of openness in the social policy arena. We want to modernise family law, allow same-sex couples to marry, while also giving them the opportunity to adopt children. We will be reforming the divorce law and abolishing divorce on the grounds of fault except for very serious cases. We will be introducing family judges. We will be reinforcing the rights of children through reforming the law on anonymous childbirth. We will be removing the voluntary termination of pregnancies from the penal code and adapting the abortion law by making the second consultation optional. In addition, we want to commit to the fight against gender inequality. On the one hand by helping women in particular, by rectifying the causes underlying unequal treatment, and on the other hand by also setting ourselves the objective of improving the representation of women in politics and on the boards of public institutions and businesses. This is why we have set ourselves the objective of encouraging more women to assume these roles and we will endeavour to increase their participation in these fields to a 40% quota in the coming years. Mr President, 8

The global financial and economic crisis put a severe strain on many countries and their businesses. Luxembourg, too, did not emerge unscathed. The last government had to make some difficult decisions and had to rescue and stabilise major, systemically important banks. It had to fight for the euro, which a good many in Europe were prepared to abandon. And here at home, quite rightly, it let the automatic stabilisers play, in particular to cushion the impact of the shock on the economy and employment. Here in Parliament we expressed almost unanimous support for this. And we are happy that together we made the right choices in this extremely difficult situation, both for Luxembourg and for Europe. And now, a few years down the track, I think we are once again in agreement that we need to swiftly put our house back together again and and carry out those reforms that are necessary. Over the last few days I have been hearing talk that this government is placing much, yes too much, emphasis on the economic challenges. This astounds me: because if we do not do so now, then tomorrow we will be faced with a whole different set of questions. How then do we intend to fight unemployment, continue to guarantee the financing of our social policy and prepare for our future, if today we choose to not provide an answer to the economic challenges facing us? Lots of things are no longer the way they used to be. And as a result, we too can no longer fully remain what and how we were. The world is undergoing constant change. Our motto must not be: we want to remain standing where we are. This way we are sure to be overtaken by all the others.

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Behaviours in Europe have changed and become harsher, because Europe too is facing hard times. Luxembourg’s financial foundations are also undergoing change. They are showing obvious cracks. Not everything that worked yesterday continues to work today. And we must accept this reality. And once we accept this reality, we create the premise to forge new confidence in our future. Because people need confidence, in themselves, in others, in their surroundings and also in politics: He who has confidence can unlock resources and potential. To strengthen that confidence, the government wants to provide a firm direction. We will be telling people what we want to do, what they can expect, where we want to be heading together. We also want to give people security, by telling them how we want to do things, what principles and systems we intend to use and what timeframe we are looking at. People should know where they stand. That way they also know what they need to do for themselves, their families and their businesses. Yes: the moment has come to assume responsibility. Because the forecasts we have received from the Comité de prévision (Forecast Committee) speak for themselves: In 2007, our public debt made up 6.7% of GDP. The forecast for 2016, based on a scenario of unchanged policies, is for public debt to increase to 15 billion euros, i.e. 29.2% of GDP, pretty much reaching the magical threshold of 30%. At the same time, central government would show a deficit of 1.6 billion euros. 10

The social security surplus, which has always somewhat embellished our general government situation, is also starting to decrease and by 2016 will have dropped from 1.5% to just 0.9% of GDP. Growth appears to be increasing only marginally, hovering around 2%, which is not much compared with an average growth rate of 4% prior to the crisis. These are merely numbers. It’s not like the numbers are hurting either when they go up or down. But a peek behind these numbers will reveal the presence of people. So what do these figures represent? - They represent an increasing number of people – young and old – who are looking for work and whose very financial existence is at risk. - They represent the fact that the future prospects of the young generations are at risk, because as a result of debts and deficits not enough means are available for them to design their own future. - They represent the fact that people and businesses are losing confidence in Luxembourg as a location and turning away from us, respectively no longer coming to us. If it was just about numbers, we could almost be forgiven for not really caring what we do. But because it is about jobs, future prospects, our location, our country, it is our blasted duty to straighten up those numbers. To do nothing is not an option for us. We will be taking action. But we certainly won’t be doing so pursuant to any kind of ideology or any kind of accounting method. We want to do politics in the true sense of the word. And our actions will therefore be guided by a few principles: 11

Responsibility, oppenness, efficiency, sustainability, social cohesion and equal opportunities. This coalition is prepared to address the enormous challenge on the basis of these principles. This coalition is determined to not see the poor condition of the state finances as a fatality. We are willing and ready to assume this responsibility – today and for our future generations. Mr President, Our problems are clear. Our method for tackling these problems is clear. As are our goals. By the end of the legislative period we want to have achieved a structural balance of +0.5% of GDP and a public debt level throughout of less than 30%. In other words, this means we must structurally consolidate the budget to the tune of approximately 1.5 billion euros. This is not just an ambitious goal that we want to set ourselves; we want to achieve this goal through a series of concrete measures. What measures have we foreseen? We want to introduce a new classification system for the management of public finances. Our aim is to pursue better policies with less money. But we have realised that, to live up to this claim, there is currently a lack of adequate structures and means of modern financial and budget management. Which is why we will be equipping ourselves with a new classification system, the aim of which is to help objectify public debate. We want to improve and modernise this as soon as possible because we can afford no more fiscal blind flight and because we simply owe individuals 12

and businesses a transparent representation of the numbers and a professional handling of their tax money. We will therefore be embarking on a so-called Kassensturz (finance check) in the coming year, which will also allow us on the expenditure side to make our first operating expense savings and our first efficiency gains. We would like to appoint a task force to carry out a screening in the short term over the next two years and to improve the efficacy of public expenditure, by coming up with less costly solutions to existing policies. On top of this, we aspire to a far-reaching structural reform in terms of budget drafting, with the aim of spending public money more efficiently and economically and of equipping ourselves with new and more transparent forecasting and assessment tools. We will be carrying out periodic assessments of the expenditure programmes and establishing internal audit structures, while also institutionalising the Comité de prévision (Forecast Committee) and developing it into a “Comité économique et financier national” (National Economic and Finance Committee). We will be introducing a budget standard and we will endeavour in every ministry to keep our expenditure to a percentage, which is to be determined, so as to introduce sufficient reform pressure into the individual ministries. We also want to create an internal stability pact between the state, the municipalities, the public institutions and the agreement sector, to drive these consolidation efforts through all the governmental and paragovernmental structures. We will professionalise the management of state contributions and bundle it into a common structure. Any revenue and dividends we want to reinvest into the economy and thus the future of our location, and into creating secure jobs. These measures and new structures will more than pay for themselves over time, because at the end of the day they will bring in more for us than what they cost us. 13

Mr President, A second key consolidation measure consists in scrutinising the targets of the transfers and to reorganise them, to put a stop to double and conflicting allowances and to lend support to those areas that really need support. Over the last weeks and months, in Parliament and not least during the election campaign, all the parties have in great depth been discussing more selective and targeted social, family and housing transfers, respectively general subsidies. When there are only limited means available, it must be ensured that these means end up where they are truly needed. And this coalition is willing to systematically embark on this path. All three parties also clearly stated this in their respective electoral programmes. I will give you just a small example: if we encourage building loan contracts, the intention is that people invest in their own homes. The intention is not for it to be used to pay fewer taxes. We want to change this, for instance. This is but a small example but it illustrates our approach. Namely to review policy goals and to readjust them when necessary. We are in the process of systematically carrying out this exercise through all the transfer structures. The undifferentiated “watering-can” policy will be replaced by a selective policy, which aims systematically and consistently to fulfil shared social and political targets. We are therefore in the process of carrying out a broad-based analysis of all the existing transfer structures: we aim to scrutinise subsidies, allowances, discounts, cash benefits, and so forth, to ensure the targets and recipient groups are in fact those we want to reach, respectively to ensure that with this policy we are indeed achieving the goals we set ourselves. In this we will be working very closely with the administrations. This is why we want to give ourselves the necessary time for this exercise and as such we will in the coming year be putting draft decisions to you for discussion. Mr President,

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If we want to get a handle on the budget, we need to ensure that at the very least we get a grip on the development of the big expenditure blocks in particular. One of the big spending blocks is of course the state wage bill. Hence we are of the opinion that the civil service should and must take part in the collective consolidation effort. Yes, we will respect the contractual obligations entered into by the last government when it signed the last wage agreement. We will implement the statutory component of this reform as quickly as possible, whereby we will take into account the opinions submitted in the context of the legislative procedure. Because back then a package was negotiated, we will be tying the entry into force of the wage agreement in with the entry into force of the statutory component of the reform. Given the state of our public finances, however, we are proposing no further increases in point value until the end of the legislative period. We feel that this is an important measure and reflects an effort by the civil service that is reasonable as well as characterised by solidarity. Mr President, If we want to achieve budgetary balance, our discussions also need to target the revenue side, namely taxes. We want to restore the confidence of the people and the investors in the future of our country through a predictable fiscal policy. In doing so, we will not be engaging in any hectic or haphazard moves. Instead we will plan a global reform, in peace. We want to present a homogeneous fiscal reform. The objective here is to pursue a fiscal policy that is based on the principle of redistribution and justice, - that generates growth, thereby creating jobs, - that generates sufficient revenue for the state so that it can fulfil its duties, 15

- that is characterised by social justice, - that does not land us on any grey or black lists abroad. Here too, much like our budgetary policy, we are currently lacking adequate state structures that would allow us to fully meet these objectives and challenges. It is vital that we develop our expertise in the various tax administrations, in particular if in the long term we do not wish to be playing a hopeless game of catchup with developments abroad. All the more now that our foreign neighbours are launching a series of attacks against Luxembourg at fiscal level. Here we will be making huge efforts and endowing the tax administrations with the necessary means to improve their organisation, management and operation. In doing so, we also want to ensure that those taxes that are owing are in actual fact collected. And we want to ensure that we are better able to meet our international obligations to avoid standing in yet another pillory, having to suffer the consequences of yet another rating or ranking. We aspire to a significantly improved factual monitoring of national and international tax matters. We will be appointing a Comité consultatif de la fiscalité (Advisory Committee on Taxation) to advise the Minister of Finance and to clarify issues surrounding fiscal attractiveness and competitiveness. In addition to the structures within the Ministry of Finance, we must also, however, give consideration to the taxes themselves. We have had intensive discussions among ourselves and with the tax administrations and other experts regarding these issues. And we have come to the conclusion that our taxes have, in many respects, reached maturity. In other words: even if we were to tighten the tax screw a little here or there, the bottom line is that no more – and often indeed less – would be coming in. We agreed that we do not wish to jeopardise the businesses of the financial centre with new taxes, but that instead we want to reinforce their activities by making adjustments, which for instance aim to attract international 16

groups to set up their headquarters in Luxembourg. With this policy, we want to reassure the players of our financial centre, which is undergoing great upheaval, and lend them a positive hand through this upheaval. The era of the sovereignty niches must now be replaced by increased competence within the financial centre. When it comes to businesses, we want to continue to foster innovative strengths and investments into our location and thus the creation of new jobs. To this effect we would like to introduce a clever mechanism of notional interest and create the possibility of a tax-exempt reserve for investments. As far as the tax burden is concerned, we can see no way of avoiding an increase in VAT. The holes in the state budget are simply too big. We are in the process of finetuning the details and will be submitting a proposal for discussion in the coming months, whereby we will be seeking to maintain the super-reduced rate of 3%. No matter what, we will ensure that we retain the lowest standard rate in the EU. As far as the taxation of private individuals is concerned, we are in the planning stages of a large-scale reform. Fiscal reforms must be well prepared. Our objectives are known, namely to head in the direction of an individualisation of the tax system and to critically review tax allowances with the aim of supporting only that which actually makes sense. We will be reviewing the rates and brackets of the tax scale, in particular to take into account the phenomenon of the middle-class hump. To this effect we have also committed to commissioning a series of detailed analyses. This is important, because we want to analyse precisely what the best and fairest method is. This will take a little time. We will be carrying out the necessary analyses swiftly without losing any time in doing so. To act with precipitation is not our style and also not in the best interest of the country. Mr President, Our objective is above all to increase our fiscal revenue through an increase in economic activity.

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In our eyes, however, increased economic activity does not equate to an unregulated growth policy. We won’t be doing just anything to achieve economic growth. It is important to us that this growth is sustainable, i.e. that social and environmental policy components are fully and totally complied with. We see a sustainable policy not as an impediment but as a great opportunity to improve our country and the competitiveness of our economy. As a country, we need to once and for all use the opportunities presented to us as a result of the scarcity of resources and the environmental challenges, and place Luxembourg, as a competent player in this field, on the local, regional and international market. Here lie huge opportunities for our country. These are the fields in which we can gain our competitive advantages. If we want to assume responsibility for the future, we must commit to a sustainable economic policy. Because this is the only way we can create future prospects for our country and our people. We, the government in its entirety, are aware of this responsibility. And yet often it is not the momentous centennial reforms that really move things along. Often it is the little things that have more of an effect. Which is why first of all we want to break up the silo mentality within the ministries. We will ensure better coordination both at governmental level and within our departments. And we will be establishing internal government structures in order to effectively implement this policy, to conduct arbitrations and to unblock gridlocked situations with wellconceived political decisions. Furthermore, we will be entering into a dialogue with civil society and breathing new life into the social dialogue, which had hit rock bottom. When it comes to the big issues, the tripartite represents a key voice for us. We may not always reach an agreement, but I hope that by showing 18

understanding for each other’s positions and respect towards each other we can together take one or several steps forward. And I am convinced – and I remain personally committed to this – that with this approach we will be able to achieve something for the people and the country. If we start talking and listening to each other again, if we are prepared to focus on the heart of the matter instead of sticking to our old guns, then we can once again establish trust and the premise for unlocking the potentials of this country of ours together. As the government, however, we also want to make our own contribution to ensuring that the economic players – the large, medium and small sized businesses – place and retain their confidence in Luxembourg as a location. Because confidence translates into investment and job creation. We want to provide businesses with predictability and planning security. A business wants to know if and how a government is willing to get a handle on its fiscal situation. It wants to know how what it considers important framework conditions will develop over time. And it wants to know whether the state is also prepared to pave the way for its future with a smart investment policy. We are prepared to make clear commitments in this regard. And I would therefore like to briefly go into a few points to substantiate this: We are in agreement to continue systematically to fight inflation. The index adjustment, in effect until next year, is to be repeated once more. Meaning that once the so-called counter has been reset to zero, after 2015, as up to now, a maximum of one index adjustment per year will be paid out. At the end of this period we will once again reset the counter to zero. This provides our businesses with more breathing space and planning security. This adjustment moreover also helps maintain the purchasing power of the people. Furthermore, as far as the almost ominous sectoral plans are concerned, we will ensure that over the coming weeks they are swiftly scheduled for 19

processing, to ensure clarity is achieved with regard to where businesses can in future establish themselves. As far as the employment law is concerned, we want to enter into negotiations pursuant to the Labour Code in particular with regard to the provisions relating to the organisation of work plans in the review period. And we have agreed that with fixed-term contracts, several fixed-term contracts may be drawn on within the statutory two-year period. We also want to create more flexibility through the introduction of working-time accounts, whereby we will be basing our discussions on the opinion issued by the CES (Economic and Social Council) in 2004. We will also expedite the reform on the Bankruptcy Act. We plan on tackling the long-running task of “simplifying and speeding up procedures” head-on. We want to create a structure under the authority of the Minister responsible for Administrative Reform, within which, together with external experts, our civil servants are to inject new dynamism into this process and swiftly achieve some concrete results. On the energy front, we are intent on the one hand on retaining the competitiveness of the industry and at the same time on supporting businesses in a bid to decrease their energy consumption. We will be addressing the mobility challenges head-on, because mobility is an important economic and location factor. We will continue to implement the “MoDu” mobility concept and the tram will happen. It will even be extended. On the public investment front we will be focusing on the economically important areas and continue to make funds available in preparation of our future. This applies in particular to the areas of housing and mobility. From a regulatory perspective, we also want to provide businesses with an interesting framework. For instance, for businesses that are involved in ecommerce and in future will need to navigate their way around complicated VAT regulations, we are analysing the possibility of a so-called “mini one-stop shop”, which would make their administrative life a lot easier.

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We are furthermore looking into how the ILR (Luxembourg Institute of Regulation) and the Conseil de la concurrence (Competition Council) could be brought together to ensure that the rules governing competition are in fact in use on the respective markets. We also consider the data protection commission a key player and we want to provide it with the necessary means to allow it to do justice to its role and the expectations surrounding it. Mr President, I cannot go into every single point of our location policy. This would be taking things too far. I would, however, like to focus for a moment on two points, which are of great importance to us, because they are at the very source of the many jobs we want to create in Luxembourg in the future:  firstly, the way in which we promote our location  and secondly, our wish to launch a campaign to generate or attract new activity to Luxembourg, through innovative ways in the field of business creation and business finance and support. Alongside the general framework conditions, these two points in particular are salient. Because we need fresh momentum. We need to explore innovative paths. And we must put Luxembourg back on the map of those people who have ideas and projects. And we can do this only if we present a coherent external front and consistently tread new paths. This is why in future we want to represent Luxembourg on the international stage as a whole on the basis of clearly defined values. We want to achieve this throughout the entire state apparatus and present it to the outside world as a clearly recognisable performance of Luxembourg. It is not good enough to be telling the outside world what we are; when people do come to us, it has to reflect reality. 21

We furthermore feel that some thought should be given to consolidating all the promotional platforms we have throughout the various sectors, to provide us with coherent vehicles. On the one hand, the representation of Luxembourg abroad should be incorporated in these promotion efforts and, on the other hand, we would like to see an efficient “economic diplomacy” put in place. As far as smaller businesses are concerned, we feel that here also the promotion of trade, tourism and culture should and must be coordinated. We furthermore want to forge new paths and evaluate and review our existing instruments when it comes to the funding of activities and the support of companies willing to invest. To this effect, we want to adapt the instruments of the SNCI (National Credit and Investment Company), to review the existing financial instruments, such as investment aid, research subsidies and government guarantees, and in general to regularly assess the effectiveness of the subsidies. We want to attract new activities to Luxembourg, on the one hand via the Luxembourg Future Fund together with the European Investment Fund and on the other hand via a funding and investment agency, which in collaboration with Luxinnovation, aims to bring people who have a project into contact with people who want to invest. Because we know how important SMBs are for stable employment, we want to implement an SMB action plan and in doing so also enhance the image of the entrepreneur to make it more interesting for young people. And to promote entrepreneurship further, we have given thought to introducing a statute for the self-employed so as to provide the self-employed with equivalent social rights. In this context it must be noted that we also want to create the option of a simplified form of Sàrl, whereby individuals can launch a business with a start-up capital of effectively 1 euro. And we would like to assess to what extent a micro credit instrument could prove interesting in helping launch small businesses. As far as trade is concerned, we will assess the existing regulation on trading hours and possibly review it upon consulting with our social partners. 22

Our commitment in the area of economic diversification will continue unchanged. We continue to see Luxembourg as an industrial hub and are also willing to factor the conclusions that will be drawn up, e.g. by the Haut Comité pour la promotion de l’Industrie (High Committee for Industrial Promotion), into our considerations. We will also continue to concentrate our efforts on the known futureoriented sectors – such as ICT, ecotechnologies, logistics and biotechnologies – where we also want to step up a gear or two. Our aim is to link visions for the future with concrete projects on the ground, which will provide us with advantages over our direct competitors and therefore create secure employment. Our aim is to make innovation and research more accessible for our businesses, so they can become pioneers in their field. Our aim is to interconnect areas in which, on the one side, we experience basic needs and therefore need to invest in, and in which, on the flip side, we can use these investments so as to espouse as our own the know-how that we gained this way in the first place. For instance, we are of the opinion that in the field of ecotechnologies we must create centres of excellence for our businesses from the field of construction, where we can ascribe more value to research and innovation. In this context we also want to inject new dynamism into the field of renewable energies and energy efficiency through the creation of a climate bank. We are of the opinion that we can create new skills niches and markets in the field of sustainable mobility together with the ICT field. In the field of information security, we want to further develop our quality standards in order, on the one hand, to better protect businesses and their data, as well as the storage and transmission of data, and, on the other hand, to use this know-how to attract new activities to Luxembourg. We are planning a campaign on the digitalisation of our state apparatus and beyond, which would allow us to open new doors to interesting markets in the area of electronic archiving, for instance. 23

We will also be backing the sector of the media, the satellites, audiovisual production and the so-called creative industries. We feel it is time to explore modern pathways in agriculture and viticulture, which we do not see as a purely peripheral phenomenon of our economy, but rather as an area with huge future potential and sound and secure jobs for our country. We are prepared to support this branch of our economy through its difficult transformation phase towards a modern, highperforming, innovative and above all sustainable economic sector. We must therefore address the new challenges facing this sector head-on and see them as an opportunity. The new Ministry of Consumer Protection that we have created will provide for a coherent and structured policy in this important area, in the interest of all consumers, and also help guarantee and certify the quality of domestic production. The University of Luxembourg is and will not be there for the economy alone, and we feel that we must utilise the university and its associated research more efficiently as an important economic sector. We want to bring public and private research closer together and place even more emphasis on ensuring that research findings subsequently have economic value. We therefore want to reinforce the entrepreneurial spirit at university and CRP level and, with the instruments I just described, foster the creation of corporate start-ups and spin-offs. Mr President, Since we’re talking of key economic sectors, I of course also want to mention our financial centre. The financial centre is one of the key pillars of our economy and our state budget revenue. It is undergoing a difficult transformation process. Nobody from the outside will be protecting our financial centre and our country. We have often been made to feel this in recent years and I fear things will not really be getting any better. We as well as the previous government

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have already been made to feel this ahead of the upcoming European Council in Brussels. We must therefore remember our strengths. We must remain open to new ideas and be sufficiently reactive in order to adapt accordingly. In the first instance, however, a government is expected to pursue a stable and predictable policy for the financial centre. This is important for the investors but also for the people who work here. As a result we will endeavour to keep the fiscal and regulatory environment of the financial centre competitive and in compliance with the European OECD standards. Luxembourg has clearly committed itself to continuing a financial centre policy that conforms to international rules, in particular with regard to the automatic information exchange system set up under the Savings Directive. This is a key point of our strategy. We want a financial centre that complies with international rules, that offers its clients quality, discretion and security. It would be wrong to want to pursue a strategy that would isolate us on an international level. As far as transparency and the exchange of tax information is concerned, we will be actively involved in developing generally applicable international standards in the context of the European Union and also the OECD. But the same applies to the automatic exchange of information, namely that this can occur only according to a specific calendar, which does not call into question the stability and competitiveness of the financial centre in relation to other financial centres throughout the world. The government will be insisting on the need to lay down homogeneous standards worldwide that apply to all financial centres. In this event, Luxembourg will not be opposed to an automatic information exchange. The government wishes to adopt the same principled position on other issues dealing with new international standards in financial operations. The government will furthermore, in the context of the Haut Comité de la Place Financière (High Committee for the Financial Centre), arm itself with 25

the necessary means to react sufficiently quickly to any changes and to adapt the legal framework in the interest of the financial centre and its challenges. We would also like to send a clear signal to investors, by also stating what we do not want to do. We do not want to introduce a wealth tax for private individuals or an inheritance tax. We will also ensure that we always remain at the forefront in terms of investment funds, so-called UCITS funds, when it comes to adapting the legal and regulatory framework to ensure it remains attractive. We will not be increasing the subscription tax and we will also not be introducing a tax for specialised investment funds (SIF). As far as the socalled SICAR are concerned, we will be maintaining the current tax regime. On the private equity front, the current tax regime will be undergoing review and will be adapted to make it more attractive to investors. A financial transaction tax in the context of enhanced cooperation is out of the question for us. We will consider the possibility of a financial transaction tax only if such a tax were to be sought worldwide. Mr President, We have a plan of how we want to restore our public finances. We have a plan of how we want to generate new impetus for the economy. We also have a plan of how we can improve the chances of the young starting out and how we can achieve better results on the labour market. Today we see many people on the labour market who do not possess the basic skills to find a job: Shortcomings that are attributable to our – but not just our – education system. Shortcomings that we must rectify if we as a country wish to exploit new future-oriented sectors. Shortcomings that we must rectify if we are serious about social cohesion and equal starting opportunities. 26

This is why this coalition attaches great importance to an integrated approach of childcare and education policy. Hence our decision to integrate youth and childhood into national education. This firmly places the focus on the child, in all its facets. This will allow us to support the development of the child more efficiently through both its formal and informal education. Whether one gets off to a good start in life or not is decided in the very early years of one’s life. The shortcomings that children accumulate during the first three years of their life are difficult, if not impossible, to redress later in school. Language problems in particular can be traced back to this developmental stage of the child, and our education system does not sufficiently account for this factor. This is why it was right to develop childcare in the last few years. But now the focus is on also guaranteeing a high quality of services without delay. A quality that we are prepared to pay for, as it is an investment in people and therefore our future. As soon as our state finances will allow, we would like to introduce and provide high-quality and free childcare. This prepares for and complements the state school system, which is and must remain free also. For us, this is about a lived cohesion policy, because in doing so we want to provide children, independently of their family and social backgrounds, with the best starting opportunities in life. Quality means quality standards. We will therefore once again review the government bill 6410 on youth, against the backdrop of the integrated system of school and childcare, which this government is setting out to achieve. We want high-quality educational work to be carried out within these structures and we want, especially when it comes to promoting early language development in children, to consistently tread new paths to provide them with the best opportunities in a multilingual school system. Quality is, however, also determined by the staff and support structures. Here we want in future to improve qualifications through continuing education and to generally appoint more qualified staff within the structures. 27

Mr President, On the education front, many structural reforms have been championed in recent years. And, as always when reforms are implemented, some elements have proven to be successful while others have brought new problems with them and raised new questions. We are determined to improve, in a composed and resolute manner, those elements that are not doing so well and to continue to support those that are doing well. In view of this, we want to simplify the learning plan in fundamental education, to reduce the core skills descriptors by narrowing them down to the essential fields that are important for the education of the child. We also want to render the interim evaluations more comprehensible. We want to redefine and significantly expand the competences of school principals to ensure a better governance and administrative management of individual schools. The governance of a school is key for the development of quality and also the necessary pathway to a better integration of parents into the education system. As far as secondary education is concerned, the government bill on the secondary education reform submitted by our former Minister Mady Delvaux will serve as our basis for addressing this reform. We will, however, reexamine this bill in its broad lines, as recorded in our coalition agreement, respectively on the basis of the opinions that are expected to be issued in this context. A lot remains to be done as far as vocational training is concerned, because in practice this is not really working. Without calling the reform into question, we will be adjusting the screws to achieve better results. We have most certainly changed the education structures in recent years. But the success of our education lies firmly with our teachers. We therefore want in coming years to place great emphasis on treading new paths in supporting teachers in their educational work. Because it is 28

the teachers who determine the quality of education. This is why we want to strengthen them. This is why we have set ourselves a very ambitious programme. Our primary aim is to differentiate the education offer. The training and the continuing education of teachers are to be improved. We want to reinforce in particular the didactic and pedagogical aspects of the individual training programmes, in collaboration with the university, and, when it comes to secondary education, possibly also by prefixing an aptitude test or a placement in a school, or by placing more value on pedagogical knowledge in the exam competition. Generally speaking, we will endeavour to improve the didactic material for teachers, respectively to incorporate new didactic ideas into their daily life and to make it accessible in a straightforward way. We will also launch a campaign to review the school books and to reconcile the didactic material with the learning plans and programmes. We want to professionalise the programme commissions with the objective of providing the schools with experts, who are able to introduce new pedagogical and didactic elements into daily school life. We want to extend the autonomy of the schools, to allow them to better adapt to their specific regional circumstances, respectively to the needs of their pupils. In this respect, schools are to be given more freedom to make pedagogical choices and to give themselves an identity, to more freely organise their staff and time schedules, whereby of course nationally defined education targets and standards must be respected. We also want to involve parents much more than before, so that together with the teachers they can act as true partners for the child. Because of course parents have a huge influence on the success of their children. But very often they are in possession of not even the most basic information or knowledge of the school, the child’s development or how this development can be positively influenced. We would therefore like to create a type of “family learning”, which aims to bring children, schools, childcare structures and teachers more closely together. 29

Mr President, The language problem in education is an issue that has a very strong bearing on the educational opportunities of thousands of pupils. We want to guarantee multilingualism in Luxembourg but in order to do so we must start treating the language issue differently. We are no longer a country to which a handful of foreign-language speakers come to live. Today we are a country where a whole host of mother tongues flock together. And to date we have not come up with an adequate response to this challenge, which nevertheless like no other decides on success or failure in Luxembourg schools. We do not want to stand by and do nothing. So for this issue in particular we have set ourselves an ambitious programme: We want to start with the very young, supporting children in the précoce and cycle 1 stages with suitable programmes, which we want to develop, to widen their language skills and vocabulary. It is precisely during these years that we want to reinforce Luxembourgish, which will pave the way for these children through our education system. We spent a lot of time discussing the possibility of a literacy reform and this appears to be a path that we really need to explore. We want to address two issues: on the one hand, whether it makes sense to offer parallel German and French literacy in one class. And on the other hand, the possibility of offering French literacy, with the aim, however, of those pupils rejoining the normal system at the end of their compulsory schooling. We also want to see what could be achieved by postponing written French for a year. We will later lay down the bases for the various stages of the educational pathway that aim to define language knowledge and skills, whereby we want to differentiate between first and second languages. And we will commission a scientific study on vehicular languages in education, because we suspect that for many pupils they represent a big hurdle if not a barrier and are the source of failure and misdirections. We are seeing time and again that it is not until the end of their school career that pupils start thinking about their professional future. Often by 30

then it is too late, with many finding themselves at an impasse. We are also noting that pupils are often guided on the basis of their weaknesses rather than their interests or their strengths. We want to counteract this phenomenon. Pupils must learn to auto-reflect on their interests and prospects. To this effect we want to introduce a mentoring system in secondary schools, in which pupils, together with their mentors and in a structured setting, flesh out their own personal “futureoriented project”, documenting it over the years. In addition, we want to continue expanding the Maison de l’orientation, with regional branches, and to bring schools and businesses closer together, for instance through work placements or introductory days. These points that I have listed make it clear what our approach is. We do not wish to once again rehash the same old debate over education. We have held enough of those debates. We now have school structures that we can build upon. Our task now is without delay to very pragmatically start adjusting those screws that are pivotal to the success of our pupils. This may well appear rather unspectacular from a political debate point of view. But it is likely to make a real difference for our children. Mr President, An active economic policy and a sound educational policy are the best prerequisites for a secure and good job market. We want to work systematically and hard at this. Nevertheless the situation on the employment market is currently very difficult. In the last few years, the country’s unemployment rate has seen a drastic increase. Luxembourg was in no way prepared for this development. Here too, first of all appropriate structures had to be implemented. 31

The ADEM reform was initiated by the previous government. We must now systematically see this through to completion. We are willing to release more means to ensure a better support setup for job seekers. We want, in coming years, to improve the numbers, the training and the specialisation of professional counsellors and to improve IT equipment and facilities, in particular in the capital. Furthermore, however, it is precisely the quality of the placement process that we want to prioritise, whereby we will placing higher demands on both sides, ADEM and the job seekers. Via the cooperation agreement to be signed by ADEM and the job seeker, we will be making the unemployed accountable, defining their rights and duties and above all placing the focus on a high job search intensity. We furthermore want to define the so-called rules of reasonableness in more detail. We will improve the support and mentoring of job seekers with psychologists, qualified educators and social workers and beyond this we will endeavour to guide people into training schemes and work without delay. We have discovered strong shortcomings particularly in the area of training organisation, which we want to avoid in future through an improved coordination between ADEM and continuing vocational training. We want to put in place a centralised “cellule sanctions” to prevent abuse and to facilitate the early recognition of problems in job seekers. We also want to develop ADEM into a partner for businesses. At present this is not the case, and this is why we want to introduce an “employer service” with specialist consultants and advisors to support and counsel businesses in their efforts. Here also, we want with the help of businesses to target what their needs are, so that we can look for people early on and train them to match the profiles required by the businesses for their activities. We also support exchange between ADEM and private employment services in order to subsequently get people onto the primary labour market.

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As far as labour market instruments are concerned, we will be assessing their efficiency before adapting them. In particular the re-employment assistance services revealed a high incidence of abuse, which we aim to remedy swiftly through a government bill. Mr President, Youth unemployment and unemployment among older people has risen in recent years. We particularly want to combat this. In the fight against youth unemployment, we would like in the context of the “garantie jeunes” to negotiate together with the social partners a “solidarity pact for the employment of young people” with binding targets. We will be offering young people personalised career paths, which either lead them back to school for further training or which see them go to work in order subsequently to enter the primary labour market, or in which they follow an activation process, which aims to help them work out their life project or their professional project more clearly themselves. ADEM, the SNJ, the ALJ and the Ministry of Labour will be working closely together for this purpose. We also want to improve the cooperation between ADEM and the Centre National de la Formation Professionnelle Continue (National Centre of Continuing Vocational Training), to improve the educational orientation of those young people who want to start an apprenticeship and to prevent them from reaching a dead end. As far as older people are concerned, we want to increase the employment rate particularly in the older age bracket, which in 2012 was a mere 56% for those aged between 55 and 59. This bracket should not be consigned to the scrapheap. This age group has accumulated a wealth of skills that we as a society and businesses can make very good use of. This is why we want to support the idea of a mentoring scheme within businesses, respectively support senior volunteer work, as well as ensure a more flexible and smooth transition from working life to retirement. We also want to discuss and reform the various early retirement schemes that are present in our legislation, with our social partners. We also want to see the amended government bill on professional reclassification adopted very soon. 33

Mr President, School, family and work are all key factors for cohesion in our society. Nevertheless there are a number of people in Luxembourg who are excluded from this cohesion, people with special needs such as the hearing and visually impaired, people with mobility issues or the mentally ill. They encounter obstacles preventing them from becoming truly integrated. The implementation of the UNO Convention is more than imperative. A permanent improvement of the day-to-day lives of these people is one of the ambitions of this government. And in the last few years, a further factor has joined the list, causing us a lot of problems, namely housing. Housing drives a wedge between society, it divides people into those who can afford it and those who cannot afford it, or else can do so only barely or no longer. It divides people into those who have and those who are unable to have. Housing, however, also exerts huge pressure on wages and therefore our economy. If half or more of a wage has to be sacrificed to retain a roof over one’s head, it soon becomes obvious that to make ends meet on a minimum wage is an impossibility. To tackle the housing problem, this government has set itself a huge task. It wants in particular to counteract the problem by resolutely going down the supply path. We have thus set ourselves four objectives: to release building land, to embark on a large-scale development of social housing and moderate-cost housing, to review the housing pact and the housing package and to restructure the subsidy policy. We want to achieve the release of building land primarily in a three-fold process: firstly we want to make viable public land and, in general, existing land suitable for building and empty sites. Secondly, we want to bring to the market land that will be reclassified or has now been defined as suitable for building through the sectoral housing plan, and we want to do so via building land agreements and the obligation to build, among others. We 34

also want the public players, in particular the municipalities, to take on a more active role within the real estate and land market. And thirdly, we want to simplify and speed up procedures whenever possible. We want to reassess and reform the Fonds du Logement (Housing Fund) and the Société Nationale des Habitations à Bon Marché (National Society of Low-Cost Housing) with the objective of injecting more dynamism and productivity into the creation of social housing – both for rent and purchase – and moderate-cost housing. In this, the municipalities play a key role. This is why we want to support them in creating social housing and we are willing in future to provide them with the necessary funds and guidance. We will also be calling upon private initiatives for the construction of social housing. Because only together can we succeed in ensuring that the huge amount of housing that must be created in coming years is in actual fact created. We furthermore want to insure a better follow-up of Housing Fund clients together with the social offices. In this context it should also be noted that we are thinking of further developing the Agence immobilière sociale (Social Housing Agency). We want to continue to support the long-term lease and lease-purchase instruments. We will subject the various subsidies that are currently available in the housing area to scrutiny and restructure them on the basis of selective and sustainable social criteria. And we would also like to draw up a comprehensive old building refurbishment programme, whereby on the one hand we, as a public state and municipal player, will fix our own buildings and whereby on the other hand we want to lend a hand to individuals and businesses via alternative funding and advanced funding mechanisms in cooperation with the banks and a climate bank. This is good news for our CO2 balance. But it is also good news for the individuals and businesses who will carry out the work on site as it will lead to the creation of thousands of new jobs. I have been able to provide only a cursory rather than an integral oversight of the many measures that we have proposed in our coalition agreement. It is clear, however, that our policy intends to breathe new life into the housing policy. 35

Young people and families must be given a fair chance to have a roof over their heads. Because housing is a right and must not remain a privilege. Mr President, Assuming responsibility for our future does not simply equate to not leaving a mountain of debt for our children. What applies to fiscal management also applies to our handling of our resources, our environment, our water, our air. Here also, the principle of sustainability must apply, and sustainability also always implies coherence between all policy areas. In the eyes of this government, sustainability is an important and multidimensional concept. A concept that encompasses economic dimensions just as much as social, cultural and ecological ones. The responsible handling of our resources starts with comprehensive information and participation. Which is why this government will be evaluating the operation and interaction of all the components featured in the second national sustainable development plan. We feel it is important to get citizens to participate as much as possible. Here, much like in other areas, the aim is to develop policies together with the people, to make policies for the citizens. We will in future be focusing on carrying out sustainability checks on all important decisions. This is why we want to conduct a broad discussion on the future development of our country, a discussion that must exclude nobody. The Economic and Social Council as well as the Conseil Supérieur pour un développement durable (High Council for Sustainable Development) have already done some important groundwork. The ecological impact must in future be incorporated into the assessment and establishment of a global welfare indicator. The principle of sustainability will also be reflected in the necessary tax reform, which will combine social, cultural and ecological objectives. This government will place new importance on urban planning. To us, responsible policy in this area also means regional and decentralised 36

development; aspiring to and encouraging proximity to employment, housing and living and therefore a better quality of life. Urban planning, mobility, the environment and regional developments must merge into new synergies, just as we strive for a balanced distribution of the economic activities and housing throughout the country. We want and intend to drive and implement this objective together with the municipalities. Since 2004, several ministries have been working on the sectoral plans for transport, housing construction, rural conservation and activity zones. The government will in the near term review the compliance of these sectoral plans with the urban planning guidelines and the sustainable development imperative. As soon as this is done, these plans will be published, so they can be discussed and analysed with all those concerned before being adopted once and for all. We need planning security, we urgently need clear indications on how we want to develop our country and where we are heading in the future. Developing our country also means coming up with an answer to the issue of transport and mobility. Our objective is to ensure sound public transport, a systematic integration of comprehensive mobility concepts when developing new construction zones, public buildings or leisure and activity zones. We want to be heading for a system in which a quarter of all travel meets the soft mobility criteria and those of public transport. In addition to this, we will be systematically developing and prioritising the tram and train network. This government wants to spare no effort in ensuring a prompt extension of the tram to Findel, Howald, Cloche d’Or and Cessange. To us, mobility and further development also means a better connection to the cross-border regions. Here the train plays a major role, as it does when it comes to hooking up our country with the great international networks. We will leave no stone unturned in improving connections to Brussels and in guaranteeing the best possible connections to the Eurostar and Thalys networks and in improving our connection to the German ICE network. We need to reinforce our motorway and road network where necessary while at the same time giving increased priority, within the 37

conglomerations, to public transport, and systematically continuing to develop electromobility and soft mobility, in particular over short distances. It is not just about guaranteeing the mobility of the citizens, however. Luxembourg is also an economic hub that we want to develop and the transport of goods also calls for an increase in efficiency and at the same time environmental awareness. The continuous development of CFL-cargo and the multimodal infrastructures in Bettembourg and Mertert are of particular importance here. The efforts undertaken to develop a true logistics pillar for our economy must be supported by suitable infrastructures. This also applies to developing the activities at Findel. This government is intent on maintaining and strengthening the viability and competitive power of our door to the outside world for our businesses and citizens, while keeping night flights to a minimum. Sustainability for the state also means investing in the quality of its buildings. There is enormous savings potential in our buildings and houses. More so, there is not just the opportunity of making significant energy and cost savings, but also of creating an abundance of jobs and skills. Many people, however, are hesitant to invest in energy-saving measures, because they deem it too complicated or because they do not have the means to do so. This, however, is a case of literally saving in the wrong places. We must escape the trap of high heating costs: the state and families alike. To this effect, this government wants to create a climate bank, which can fund projects in the private and business sector that make a significant contribution to our energy balance being pushed down. The target put forward to us by the European directives on energy efficiency is a 20% reduction in energy consumption by 2020. We must achieve this goal. We also want to take advantage of this effort by creating new jobs in construction and trade and by funding these jobs to a large extent with the energy savings made. In this project everyone is a winner: our environment and our climate, our labour market and our economy and, last but not least, our state budget.

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We want to turn Luxembourg into a centre of excellence within the Greater Region for sustainable construction and renovation. The state wants to lead by example and as such in future any large buildings will be authorised as passive buildings only. We have set ourselves the additional objective that by 2020 at least 11% of our energy consumption will come from renewable energy sources. This is a challenge of gigantic proportions. Here too, the climate bank can make an important contribution without the need to fall back on tax money. Climate protection, energy efficiency and the promotion of renewable energies are also goals that we systematically foster on a European level and that, in particular during our presidency of the Union, we will be counting among our diplomatic priorities. We do not see a conflict between sustainable development and economic success, quite the contrary. Efficient handling of our resources is a key to economic success. Sound, transparent and efficient procedures are an essential factor in this. The administrative simplification and the reduction in delays remain also in the area of environmental protection a priority of this government, much like the harmonisation and simplification of the environmental law. Not at the expense of the fund or citizens’ rights, however, but at the expense of unnecessary bureaucracy. On the commodo front, this means implementing the necessary reforms, without compromising the protection of the environment or citizens’ rights. To achieve this goal, we will be developing a reform of the nomenclature of the classified establishments, to give the administration the time and means to attend to projects that risk having a significant impact on our environment. We are also committed in the near term to finally drawing up all those missing regulations so that investors and private individuals can count on planning security. To guarantee a better management of our water resources, the water administration is being incorporated into the Ministry of Sustainable Development and Infrastructure and its advisory role is being strengthened.

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The working method of the environment fund will be simplified and organised according to transparent criteria. There will be firm deadlines for the analysis and decision of projects. Systematic investment is necessary to continue to guarantee the quality of our drinking water in future. Which is why the SEBES installations in Eschdorf are being completely rebuilt The correct and timely transposition of European directives and international agreements is a matter of course for this government. We have better uses for our tax money than paying penalties to Brussels because we are years behind in actually honouring the commitments we entered. We must, however, also tackle the sins of the past. This applies in particular to the issue of soil contamination. To avoid the general public in future having to stump up the remediation costs, we will be creating a new decontamination fund, which will be financed according to the “polluter pays” principle, and we will be reinforcing the corresponding environmental law provisions. We will continue resolutely to pursue the reforms that have been launched in recent years on the health front. They are based on clear values and goals. Here the focus is on universal access to high-quality healthcare in compliance with long-term secured budgets. We are familiar with the challenges. They include: the effects of the financial crisis, our ageing population, the rapid development of new medical technologies and the necessary preventive character of our health policy. Our health policy for the coming years thus builds on efficient investments and optimal training and further education. This government intends to continue the reforms from the previous legislature period and to complete them where necessary. The bills that need to be brought to completion as soon as possible include those on patient rights, on psychotherapists, on laboratories and the expansion and refurbishment of the ZithaKlinik in the context of the planned merger and on the assumption of specialisations on the various sites. The government strives to guarantee the best quality of care for everybody, to increasingly invest in prevention, to give priority to primary care and to promote accountability among patients and service providers. 40

Every cent we invest in prevention pays for itself twice over: we maintain our health and avoid costs associated with often expensive and protracted treatments. Hence we will be creating a special health fund, which will be funded via a tax levied on substances that are harmful to health. The training and continuing education of medical personnel remains a priority. Post-university specialisation of general practitioners is therefore firmly incorporated into the framework of Luxembourg University. As far as the hospitals are concerned, the government has reached an agreement on the total budgetary envelope until activity-based funding is introduced prior to the end of the legislature period. It is therefore important that documentation on medical activity is introduced, that hospital management is improved and that collective invoicing is ensured. Good governance of the hospitals entails collaboration on a regional and national level, as well as a balanced distribution of the hospital infrastructures throughout the country. For this reason we support the construction of a new hospital in Esch/Raemerich as well as that of the environmental clinic on the Niederkorn CHEM site. The final stages of life must also be accompanied medically. This involves the fields of both palliative medicine and euthanasia, which complement one another. Here, much like in research, ethical and medical issues are closely interlinked. With this in mind, the government will extend the palliative medicine review foreseen for 2015 to include the comprehensive needs of a dignified death. As far as our health funds are concerned, this government will do everything in its power to get a handle on cost developments. If we sit idle, we will have lost our financial equilibrium by 2015 at the latest and that is not an option. Without having to affect the contributions of the insured parties, savings can be made through a stricter application of medical references, thereby cancelling out repeat or multiple analyses or documents, through consolidating the hospitals’ information services, quality control schemes, the laboratories… There is also a savings potential to be harvested through an improved handling of patients during the rehabilitation or convalescence phase 41

within the corresponding structures, providing relief to the hospitals, as well as in home-based care. Based on the recent report of the Inspection Générale de la Securité Sociale (Inspectorate General of Social Security), we will be implementing the proposed measures in order to carry out the structural measures that will also help us to get a handle on cost developments. The objective of longterm care insurance must remain the provision of those services and facilities that enable a dignified and autonomous life in familiar surroundings. As far as our pension funds are concerned, we will retain the existing financing model, which of course is based on universality and solidarity. The 2012 reform took an important step in the direction of financial consolidation. What remains important is a review, every five years, of the actuarial situation of our pension system, to ensure an early recognition of possible imbalances and the ability to take necessary precautions. We must, however, continue to give thought to further anti-overlap mechanisms, to incentives to keep people working longer, or to combining part-time work with part-time pensions. This government is also of the opinion that the 1999 law on complementary pensions must be reviewed, in particular to guarantee the equal treatment of freelance professionals and salaried employees. In this context, we must also once and for all implement the directive of 20 December 1996 on the equal treatment of men and women in social security. Culture is a basic element of every democratic, modern, open, tolerant and solidly united society. The freedom of culture and the diversity of artistic creation underline the humanist values of a multicultural society. Culture is an important integration factor in our society. As far as cultural policy is concerned, we will be giving ourselves a clear strategy, a so-called “cultural development plan” will be set up, defining the priorities of cultural policy on all levels. We will provide ourselves with a culture governance that will contain not only an analysis of the operation of the cultural institutions and the Ministry, but will also provide transparency and the establishment of clear rules in the subsidy policy. 42

We are proud of our artists. We are committed to promoting our creative artists and their works on the international stage, so that they get the recognition they deserve there. As cultural ambassadors, they are moreover in a position to help develop the image of our country in a positive light. A good example of how culture can contribute to the positive image of a country is the award we received last weekend for “The Congress”. In education, cultural activities for pupils are being improved. Together with schools, we wish to see the creative talents of our children being stimulated as much as possible and their imagination being fostered further. Mr President, This government will also make sure that the voice of Luxembourg will continue to be heard throughout the world and that our influence within the European Union remains such that it allows us to represent our interests effectively. We have already proven this over the last year as a member of the Security Council and we will continue to pursue this committed and responsible policy for the second half of our mandate also. Preparations are now underway for the huge task that awaits us during the second semester of 2015, when we once again take over the presidency of the Union. The cooperation with the Union strengthens our country and our economy. Which is why this government sees no alternative to a closer integration and cooperation within the European Union. As a small country, we are very aware of the fact that more integration is a good thing, not just for the future of Europe but also for that of Luxembourg. This is why we are committed to a strong, democratic, solidly united and also an ecological Europe, which keeps its doors open to those countries that share our ideals and democratic principles. The active foreign policy that this government intends to pursue will always keep our political, economic, commercial and cultural interests in mind. Which is why we will be strengthening our network of embassies, consulates and trade offices in those locations that are of importance to our economy and provide opportunities, while also supporting and helping to develop the business location of Luxembourg through assertive diplomacy. 43

We also strive for a closer cooperation within the Greater Region and we are happy the decision was made last week to bring the Secretariat of the Greater Region to Luxembourg. This government remains firmly committed to the field of development cooperation, to which 1% of our GDP will also be dedicated in future. We do this out of solidarity to those who were not fortunate enough to have been born in a developed and democratic part of the world. However, we also do it because we know there is a strong connection between development, future prospects and stability; much like there is between stability, democracy and human rights. We thus also do it for ourselves, since we all share the same planet. New tasks beckon. We have all together made remarkable progress in the fight against global poverty. Now it is time to reconcile the objectives that we set ourselves as a global community with the requirements of sustainability, good governance and the respect of human rights. Mr President, I am unable to enter into every aspect of the coalition agreement. The coalition agreement itself, however, does endeavour to go into every aspect of our social coexistence and to propose clear goals and paths. We will in the coming weeks and months be getting ample opportunities to discuss this within the respective areas of study. In addition, in our effort to continue to objectify discussions, we will naturally be publishing the minutes of our negotiations. We will also be asking all those associations who wrote to us during the negotiations for their consent to publish their proposals online on the government website. We furthermore offer the opposition the opportunity to submit any ideas and suggestions they might have, for instance with regard to restoring public finances, for assessment by the administrations concerned. We do not want a good idea to be lost in the process. As far as the structure of the government is concerned, we have endeavoured to regroup the key competences so as to allow us to achieve as high a degree of political efficiency as possible in those areas. 44

And because we attach great importance to the horizontal approach and we feel a collective responsibility to solve the big issues, we will be systematically and regularly discussing the improvements and problems of the core policy areas, such as public finances, unemployment and housing, as well as the improvements of the administrative reform on the level of the entire government. We have in the last days and weeks regularly been questioned whether what we are taking on is not too ambitious. Whether we will actually manage to tackle it all. I have to tell you that our country does not really have a choice. We simply have to tackle it. We have a duty, a responsibility towards our citizens and, let us not forget, towards the future generations. What we are not prepared to change or improve today will rest twice as heavily on the shoulders of those who come after us. It is time for political action. Practically every single one of us said the same during the electoral campaign. Over this we were in agreement. And now we have to act. Together. The opposition must also assume its responsibilities. We should therefore in future look more closely at what unites us so that we can do what needs to be done for the future of our country. That’s why it is so important that we do our utmost to involve the people, our civil society and the social partners in this political process in a true dialogue. That’s why it is so important that we modernise our institutions and the structures of our state apparatus. That’s why it is so important that we remedy the situation of our public finances and create new, sustainable growth. 45

That’s why it is so important that we do our utmost to live together in harmony, to guarantee the cohesion of our society. We are neither iconoclasts nor revolutionaries. Quite the contrary. We want our policy to close old graves, not dig new ones. Yes. We want to tell people clearly where we see problems and what we want to do to solve them. But, whatever it is we want to do, we will raise for public discussion. Our focus in on solving problems and it is not about us always being in the right. We rely on the power of arguments. We are not prepared to not act. We want a lived openness, responsibility, cohesion. We owe it to ourselves and future generations.

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