Luxembourg names first ever female finance minister

By John Monaghan and Yannick Hansen

Yuriko Backes has been named as Luxembourg's new finance minister, the first woman to ever be appointed to the post, just days after Pierre Gramegna said he was stepping down from the role and leaving politics.

The 50-year-old, who is not an elected politician and is currently chief of the Grand Ducal household, is a career diplomat and has worked as diplomatic advisor to both Juncker and Bettel.

Backes' appointment was unveiled at a press conference held on Friday by the Democratic Party, of which she confirmed she was not a member. Neither Prime Minister Xavier Bettel nor Family Affairs Minister Corinne Cahen indicated when Backes will take over from Gramegna but he will step down "in the first days of January", he said at the press conference. 

"I am not from the finance sector," Backes said. "I didn't grow up in the finance sector. But I will commit myself to this task".

Backes, who holds degrees from the London School of Economics and the School of Oriental and African Studies, was Luxembourg's head of the representation of the European Commission for four years before becoming chief of the Grand Ducal household last year.

She previously worked as counsellor at the Ministry of Foreign Affairs as well as permanent representative of Luxembourg to the United Nations in New York and deputy chief of mission for the Luxembourg Embassy in Japan.

Gramegna, who had been in the post for almost a decade and oversaw the country's financial response to the pandemic, surprised many observers on Monday with the news he was exiting political life.

A statement issued by the party cited "personal reasons", with Gramegna telling RTL later the same day that he had decided he would not run in the country's next elections, scheduled for 2023.

The 63-year-old had served as finance minister since the Democratic Party returned to power in 2013 as part of a coalition government led by fellow DP member and Prime Minister Xavier Bettel.   

He had been expected to stay in office until the end of the year to oversee the parliament's passage of the 2022 national budget, which he was also responsible for presenting, the Luxemburger Wort newspaper reported.  

Friday's announcement marks the end of a week of change at the top of Luxembourg's government. Two other long-standing ministers, Labour Minister Dan Kersch and Agriculture Minister Romain Schneider, both of the social-democrat LSAP party, confirmed on Tuesday that they were also leaving their posts.

Schneider, who said he was retiring after 12 years in government to focus on his health, will be replaced by Claude Haagen. Georges Engel is to take over the post vacated by Kersch, who is stepping down after eight years as a minister. Unlike Schneider, Kersch said he is not retiring from political life and will continue as a deputy in Luxembourg's parliament.

The role of deputy prime minister, also held by Kersch, has been given to Paulette Lenert, the health minister.

Gramegna spent his tenure in government defending Luxembourg's financial centre, the home of the world's second-largest investment fund industry with assets worth €4.7 trillion, from critics who labelled the country as a tax-avoidance haven.  
 
In a speech in parliament in February, following the so-called OpenLux media investigation that Russian and Italian mafia gangs were among those able to hide money in the Grand Duchy, Gramegna said that criticism from neighbouring countries of Luxembourg's tax arrangements was simply borne out of "jealousy".

"People think we have cheated because we are so successful,” Gramegna said, the day after the investigation which slammed Luxembourg's financial transparency laws as ineffective.  

Prior to joining the government, Gramegna was the head of the country’s Chamber of Commerce for a decade. Before that, he had a 20-year career as a diplomat representing Luxembourg in France, the US, Japan and South Korea.

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