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New wage talks due in Luxembourg as prices climb
cost of living

New wage talks due in Luxembourg as prices climb

by Yannick HANSEN 03.08.2022
Another pay hike is due this year, statistics agency said, but government has been delaying such automatic indexations
Last round of talks between the government, business representatives and trade unions took place in March
Last round of talks between the government, business representatives and trade unions took place in March
Photo credit: Anouk Antony

A next round of government-led wage talks between workers and bosses is due after the latest forecasts showed rampant price rises would trigger another automatic wage indexation by the end of the year.

"The government has asked Statec to update its [inflation] calcuation for early September. On the basis of those calculations I will convene a Tripartite [meeting]," Prime Minister Xavier Bettel tweeted on Wednesday.

If the war in Ukraine continues, inflation is forecast to hit an annual rate of 6.6% by the end of 2022, national statistics agency Statec said on Wednesday, enough for a 2.5% top-up of wages in the last three months of the year.

But social partners decided to suspend the next automatic wage indexation which became due in July, and instead pay out tax credits to make up for the loss in purchasing power. 

Workers would receive the July indexation in April next year, the agreement said, and could meet again should another indexation become due in the meantime, a scenario that is now playing out.

"I assume that will happen in November at the latest," Romain Wolff, the head of the trade union CGFL told broadcaster RTL on Wednesday. "The slate will be wiped clean and new negotiations will take place," he said.

The government previously said that future wage indexations would be pushed back until 2024 or 2025. By paying out tax credits instead of going through with wage indexations, the government shifted the financial burden away from businesses and on to the taxpayer.

Russia's war against Ukraine and ongoing problems with the global supply chain continue to drive up inflation, Statec said. Should the war continue, inflation could hit an annual rate of 5.3% in 2023.

In response to ballooning fuel prices, Luxembourg put together a support package that will cost the taxpayer more than €1 billion. Amongst the measures are tax credits, a discount on fuel and rent subsidies.


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