AMCHAM -Please explain the process of initial understanding and first actions by the Ministry of Economy as this economic crisis unfolded. What were the issues first considered most important and what were the first decision steps taken?
Franz Fayot, Minister of the Economy: When managing the Covid-19 crisis, the Luxembourg Government, above all, applies the instructions given by our national health authorities. Protect the health of people living and working in Luxembourg is the priority and our foremost maxim when it comes to setting up sanitary restrictions and closing or re-opening different economic activities.
The economic support packages set up by the Luxembourg Government received a wide support, both from employers’ and workers’ organizations. Right from the start, we have taken exceptional and extraordinary measures and made available the largest amount of economic aid ever mobilised in Luxembourg to help businesses and their employees get through difficult times.
Different schemes of grants guarantees and other financial measures were put in place to support Luxembourg companies and self-employed that have short-term liquidity needs, to help them cope with cash-flow difficulties and to ease bank financing.
Our highest priority is to ensure employment and thus to maintain the purchasing power of households. So we decided to apply the short-time working scheme to an unprecedented number of economic sectors in a first phase.
AMCHAM -How has the focus of policies and actions of the Ministry of Economy evolved over the time of the crisis?
Franz Fayot, Minister of the Economy: The Luxembourg Government is fully committed to preserve employment and to support companies. We precisely monitor the impact of the Covid-19 crisis on our economy as well as the impact of new restrictions on companies. Safety protocols have progressively been developed and implemented for all sectors. Over the past months, the Government in general and the Ministry of the Economy in particular always took additional actions when it was necessary due to the evolution of the pandemic.
We progressively and continuously adapt and extend the measures to support companies of all sizes and types, to maintain the diversity and strength of our economic tissue. The health of people and the certainty that our health care system and our hospitals can manage the number of ill people are always the first priority.
In a first phase, our aim was to bring immediate support to companies, and our aid measures were in line with this. In the meantime, however, we have had time to broaden our view and to think about the long-term impacts and consequences of the crisis. So we developed new aid scheme that help companies manage the post-crisis. As an example I would mention the aid for investment in the Covid-19 era, that supports companies which already prepare themselves for the time after the crisis, for example with investment projects dedicated to digitalization and energy efficiency, or implementing certain principles of circular economy. For such projects, we have now made available financial aid of a higher percentage than before – we want to avoid the postponement of investment projects that would contribute to a more sustainable and a competitive economy.
AMCHAM -What problems have been encountered implementing these subsidies and how have they been overcome?
Franz Fayot, Minister of the Economy: At the ministry of Economy we have received an unprecedented number of requests for financial aid and for short-time work. It was quite a challenge to set up the necessary online forms and programs in record time and to mobilize all the teams to prepare and process the thousands of requests.
I must say that my staff at the ministry has been very reactive and hands-on. The busiest departments immediately got support from colleagues in other departments. The ministry of Economy had also detached experts to the hotline for companies; those were able to give answers and a quick feedback to companies calling for more information about new measures and available support.
AMCHAM -What current subsidy programs are still available for companies to participate in and what are the eligibility criteria for participation?
Franz Fayot, Minister of the Economy: We have not yet overcome this crisis. We are now in a second wave of infections and have had to make new decisions by closing again several economic activities. In line with those decisions, new aid measures for the most affected sectors as well as an extension of existing measures were obvious choices.
One aid measure I would like to mention in particular, as it helps companies prepare themselves for future challenges, is the “Fit for Resilience” program. We have set it up together with Luxinnovation. Officially launched in May as part of the national economic recovery policy “Neistart Lëtzebuerg”, “Fit 4 Resilience” aims to support companies as they emerge from the crisis and to help them envisage a longer-term development strategy. In this development strategy, a more digital, circular and regional approach should be integrated, enabling companies to become more resilient. The program was scheduled to end on 31 December 2020 and has now been extended by one year.
In just a few months, the mobilisation of all sectors of activity around this programme has been remarkable. The challenges companies face today are unprecedented, thanks to “Fit 4 Resilience”, they can benefit from an analysis of their strengths and weaknesses and can identify actions to implement.
Since the launch of the programme, more than 50 companies have shown their interest and 15 of them are currently in the process. I would like to invite all interested Luxembourg companies, whatever their size and sector of activity, to apply for participation in the program until 31 December 2021 via the platform www.fit4resilience.lu.
As a result of the “Fit 4 Resilence” analysis, companies may come up with new investment projects or projects that they thought of postponing due to the current crisis. For those projects, other financial aids of the ministry of the Economy can be applicable, especially the new aid scheme for investment projects in the Covid-19 era I mentioned earlier. As part of the “Neistart Lëtzebuerg” economic recovery programme, this aid scheme complements “Fit 4 Resilience” by encouraging companies that have suffered a drop in turnover to make investments that would have been cancelled or postponed due to the crisis. These investments may concern, process and organisational innovation projects, or digitalization as well as energy efficiency projects.
AMCHAM -What is your assessment of the lessons learned during this crisis and the current state of the Luxembourg economy ?
Franz Fayot, Minister of the Economy: Obviously, facing a crisis as well as overcoming its impacts has a strong effect on the State budget and this is a challenge. Luxembourg has the advantage of a very good and stable starting position. Our triple A rating as well as the balanced budget and low debt in pre-crisis time give us far more flexibility than other countries might have.
Therefore, we have the necessary flexibility and latitude to set up useful support measures for all Luxembourg companies to overcome the crisis and to maintain investments on the other side. The crisis will surely have an impact on future state budgets, for the time being, however, the government is not planning to reduce useful and necessary investments or expenditures.
I strongly advocate for learning lessons from a crisis. At the ministry, we are taking into account the feedback from companies and employee’s representatives as well as different other stakeholders in the Luxembourg economy. Based on this input and on a continuous surveillance of international evolutions and megatrends affecting the economic environment, we prepare our sectoral and general economic strategies, always with a focus on sustainability, resilience and competitiveness of our economy.
AMCHAM -What steps are being initiated or planned by the Ministry of the Economy to relaunch the economy?
Franz Fayot, Minister of the Economy: Our business development aims and our economy will surely be impacted and changed by the crisis.
However, I also see an opportunity to come out differently from a crisis. I strongly believe that we should see the end of the crisis as an opportunity to orient our economy towards more sustainability and resilience. We must focus on circular economy solutions, on environment- friendly industry and on energy efficiency as well as renewable energies.
Now is the moment to accompany companies and economic actors in this direction, because a crisis is always a moment to draw conclusions from what happened and set new aims and goals for the future. The strategical work underlying those orientations is ongoing in my ministry.
AMCHAM -What is your assessment of the state of the economy at present and your expectation for recovery in 2021? What message and advice would you offer to business leaders as we enter the phase of recovery and relaunching the economy.
Franz Fayot, Minister of the Economy: I think that for our economy and many of our companies there is a possibility to emerge stronger from this crisis, we should take advantage of this period imposed on us to become more resilient in the future. I am convinced that this recovery is an opportunity to make our economy and organizations more digital, more sustainable and more resilient.
AMCHAM -As you have dealt with this crisis, how has your management and leadership perspective and style evolved?
Franz Fayot, Minister of the Economy: This is my first year as Minister in the Luxembourg Government, and I must say that I did not expect that such an economic crisis would hit Luxembourg and the whole World when I came into office. However, I quickly became familiar with the ministry, and mobilized all the necessary resources to support our economy. I think the government is united and doing a good job in the management of the current crisis.
Please explain the process of initial understanding and first actions by the Ministry of Economy as this economic crisis unfolded. What were the issues first considered most important and what were the first decision steps taken?
Franz Fayot, Minister of the Economy: When managing the Covid-19 crisis, the Luxembourg Government, above all, applies the instructions given by our national health authorities. Protect the health of people living and working in Luxembourg is the priority and our foremost maxim when it comes to setting up sanitary restrictions and closing or re-opening different economic activities.
The economic support packages set up by the Luxembourg Government received a wide support, both from employers’ and workers’ organizations. Right from the start, we have taken exceptional and extraordinary measures and made available the largest amount of economic aid ever mobilised in Luxembourg to help businesses and their employees get through difficult times.
Different schemes of grants guarantees and other financial measures were put in place to support Luxembourg companies and self-employed that have short-term liquidity needs, to help them cope with cash-flow difficulties and to ease bank financing.
Our highest priority is to ensure employment and thus to maintain the purchasing power of households. So we decided to apply the short-time working scheme to an unprecedented number of economic sectors in a first phase.
How has the focus of policies and actions of the Ministry of Economy evolved over the time of the crisis?
Franz Fayot, Minister of the Economy: The Luxembourg Government is fully committed to preserve employment and to support companies. We precisely monitor the impact of the Covid-19 crisis on our economy as well as the impact of new restrictions on companies. Safety protocols have progressively been developed and implemented for all sectors. Over the past months, the Government in general and the Ministry of the Economy in particular always took additional actions when it was necessary due to the evolution of the pandemic.
We progressively and continuously adapt and extend the measures to support companies of all sizes and types, to maintain the diversity and strength of our economic tissue. The health of people and the certainty that our health care system and our hospitals can manage the number of ill people is always the first priority.
In a first phase, our aim was to bring immediate support to companies, and our aid measures were in line with this. In the meantime, however, we have had time to broaden our view and to think about the long-term impacts and consequences of the crisis. So, we developed new aid scheme that help companies manage the post-crisis. As an example I would mention the aid for investment in the Covid-19 era, that supports companies which already prepare themselves for the time after the crisis, for example with investment projects dedicated to digitalization and energy efficiency, or implementing certain principles of circular economy. For such projects, we have now made available financial aid of a higher percentage than before – we want to avoid the postponement of investment projects that would contribute to a more sustainable and a competitive economy.
What problems have been encountered implementing these subsidies and how have they been overcome?
Franz Fayot, Minister of the Economy: At the ministry of Economy we have received an unprecedented number of requests for financial aid and for short-time work. It was quite a challenge to set up the necessary online forms and programs in record time and to mobilize all the teams to prepare and process the thousands of requests.
I must say that my staff at the ministry has been very reactive and hands-on. The busiest departments immediately got support from colleagues in other departments. The ministry of Economy had also detached experts to the hotline for companies; those were able to give answers and a quick feedback to companies calling for more information about new measures and available support.
What current subsidy programs are still available for companies to participate in and what are the eligibility criteria for participation?
Franz Fayot, Minister of the Economy: We have not yet overcome this crisis. We are now in a second wave of infections and have had to make new decisions by closing again several economic activities. In line with those decisions, new aid measures for the most affected sectors as well as an extension of existing measures were obvious choices.
One aid measure I would like to mention in particular, as it helps companies prepare themselves for future challenges, is the “Fit for Resilience” program. We have set it up together with Luxinnovation. Officially launched in May as part of the national economic recovery policy “Neistart Lëtzebuerg”, “Fit 4 Resilience” aims to support companies as they emerge from the crisis and to help them envisage a longer-term development strategy. In this development strategy, a more digital, circular and regional approach should be integrated, enabling companies to become more resilient. The program was scheduled to end on 31 December 2020 and has now been extended by one year.
In just a few months, the mobilisation of all sectors of activity around this programme has been remarkable. The challenges companies face today are unprecedented, thanks to “Fit 4 Resilience”, they can benefit from an analysis of their strengths and weaknesses and can identify actions to implement.
Since the launch of the programme, more than 50 companies have shown their interest and 15 of them are currently in the process. I would like to invite all interested Luxembourg companies, whatever their size and sector of activity, to apply for participation in the program until 31 December 2021 via the platform www.fit4resilience.lu.
As a result of the “Fit 4 Resilence” analysis, companies may come up with new investment projects or projects that they thought of postponing due to the current crisis. For those projects, other financial aids of the ministry of the Economy can be applicable, especially the new aid scheme for investment projects in the Covid-19 era I mentioned earlier. As part of the “Neistart Lëtzebuerg” economic recovery programme, this aid scheme complements “Fit 4 Resilience” by encouraging companies that have suffered a drop in turnover to make investments that would have been cancelled or postponed due to the crisis. These investments may concern, process and organisational innovation projects, or digitalization as well as energy efficiency projects.
What is your assessment of the lessons learned during this crisis and the current state of the Luxembourg economy ?
Franz Fayot, Minister of the Economy: Obviously, facing a crisis as well as overcoming its impacts has a strong effect on the State budget and this is a challenge. Luxembourg has the advantage of a very good and stable starting position. Our triple A rating as well as the balanced budget and low debt in pre-crisis time give us far more flexibility than other countries might have.
Therefore, we have the necessary flexibility and latitude to set up useful support measures for all Luxembourg companies to overcome the crisis and to maintain investments on the other side. The crisis will surely have an impact on future state budgets, for the time being, however, the government is not planning to reduce useful and necessary investments or expenditures.
I strongly advocate for learning lessons from a crisis. At the ministry, we are taking into account the feedback from companies and employee’s representatives as well as different other stakeholders in the Luxembourg economy. Based on this input and on a continuous surveillance of international evolutions and megatrends affecting the economic environment, we prepare our sectoral and general economic strategies, always with a focus on sustainability, resilience and competitiveness of our economy.
What steps are being initiated or planned by the Ministry of the Economy to relaunch the economy?
Franz Fayot, Minister of the Economy: Our business development aims, and our economy will surely be impacted and changed by the crisis.
However, I also see an opportunity to come out differently from a crisis. I strongly believe that we should see the end of the crisis as an opportunity to orient our economy towards more sustainability and resilience. We must focus on circular economy solutions, on environment- friendly industry and on energy efficiency as well as renewable energies.
Now is the moment to accompany companies and economic actors in this direction, because a crisis is always a moment to draw conclusions from what happened and set new aims and goals for the future. The strategical work underlying those orientations is ongoing in my ministry.
What is your assessment of the state of the economy at present and your expectation for recovery in 2021? What message and advice would you offer to business leaders as we enter the phase of recovery and relaunching the economy.
Franz Fayot, minister of the Economy: I think that for our economy and many of our companies there is a possibility to emerge stronger from this crisis, we should take advantage of this period imposed on us to become more resilient in the future. I am convinced that this recovery is an opportunity to make our economy and organizations more digital, more sustainable and more resilient.
As you have dealt with this crisis, how has your management and leadership perspective and style evolved?
Franz Fayot, minister of the Economy: This is my first year as Minister in the Luxembourg Government, and I must say that I did not expect that such an economic crisis would hit Luxembourg and the whole World when I came into office. However, I quickly became familiar with the ministry, and mobilized all the necessary resources to support our economy. I think the government is united and doing a good job in the management of the current crisis.