Inflation in Luxembourg“Social crisis” or “companies in crisis”? The new index divides
LUXEMBOURG – As Statec is planning a new tranche of the index at the end of the year, unions and employers are making their case to the tripartite that is taking shape.
- Jerome Wiss and Thomas Holzer
Statec planned, on Wednesday, a new index tranche for the fourth quarter of 2022. If the figures have not yet been refined and confirmed in early September, it now seems certain that a new index will be produced between the end of 2022 and the beginning of 2023. It remains to be seen if it will be applied immediately to the payroll or if it will be postponed, like the one at the beginning of the summer that will not take effect until next year.
To make this decision, the Government, the unions and the employers will have to meet again in the framework of a tripartite, as was decided after the agreement of last March. At OGBL, we are not surprised by this new index. “We knew from the beginning that the figures presented during the tripartite did not hold up”, breathes Jean-Luc De Matteis, central secretary of the OGBL. The different scenarios of the State, with inflation up to 7.3%, show “a great impact on people’s purchasing power. Pasta has increased by 20%, oil by 30%, gas oil by 80%”, lists the trade unionist. “We hit people’s wallets deeply and we risk having a huge loss of purchasing power.”
As a result, the OGBL approaches the next tripartite “as the last. We must absolutely support households and not touch the index. The index is just a recovery of inflation, we have to go further”, he explains. According to him, “the companies do not have any problem. The oil companies are getting rich, industry and construction are doing well”.
Jean-Luc De Matteis hopes that “this time the government will prepare the tripartite. We don’t want to just talk about the index, but discuss all the real issues. Taxes, housing… We can finance things with tax brackets on big paychecks, plus taxes on corporations…”
In the LCGB neither, “this index is not a surprise, everyone had gotten used to the idea”, says Patrick Dury, president of the union. He will also come to the negotiating table with the “same priorities as last time: the purchasing power of employees and the safeguarding of jobs. This crisis must not become a social crisis.”
But does the protection of purchasing power necessarily go through the application of the index or are compensations possible, such as the granting of tax credits instead of the summer quota? “The agreement last time was based on solidarity, but I still don’t know what will be discussed next time,” Patrick Dury continues. “We have other demands, such as the adequacy of the tax scale, the release of the minimum wage from taxes… We have the support of low and medium wages.”
“Social dialogue is and remains an important crisis tool and part of our success story. The government leaves no one,” Prime Minister Xavier Bettel responded on Twitter. “Together with the social partners, we will find common solutions that will relieve people and companies.”
On the part of businessmen, it is time for reflection and analysis considering “the evolution of the situation and the new elements”, reacted Jean-Paul Olinger. The director of the UEL recalls that the scenario of the new sections of the index is included in the agreement signed with the Government last April, and that it provides for “delay and compensation”.
Mr. Olinger insists on the need to consider the economic situation globally, without forgetting the risks that weigh on companies: “All economic indicators are negative. Inflation also affects societies. If they also have to deal with unforeseen salary expenses, some could find themselves in great difficulty, ”he concludes.
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