AMCHAM – Please explain to our members and readers your first reactions to the Corona situation. What was your initial level of concern and what were your first priorities?
Prime Minister Bettel – When the first cases of the new virus were reported in China and later also in Europe, the government decided early on to prepare for the case of a worldwide pandemic by ordering the HCPN (High Commission for National Protection) to prepare a plan for Luxembourg as a response to the virus. The plan included an analysis of the needs concerning human, material and logistics resources. This happened over a month before the first positive case had been reported in Luxembourg. We were prepared.
When the first cases had been discovered, a crisis cell responsible for coordinating our efforts nationally and internationally was immediately formed at the Ministry of Health with members from many different and complementary backgrounds. The members of the crisis cell were in constant contact monitoring the situation very closely in order to anticipate developments. The government exchanged on a daily basis about the situation. Our top priority was, and still is, to protect human lives, to give patients the treatment that they need and thus, to not overload the hospital capacities.
Hospital capacities are the most important factor of the crisis. Hospital capacities remained a focus up until now. We could not have situations where patients would not receive treatments, or even worse, choices of priority would have had to be made in the hospitals.
AMCHAM -What policy actions did you and your government initially prioritize?
Prime Minister Bettel -A pandemic is a special crisis in so many ways. We speak about an illness, about humans, about an invisible threat, and unfortunately, about death. There cannot be any other initial priority than to do everything in our power to save human lives. And that is what we did. As mentioned before, it is an absolute priority to keep the necessary capacities in our hospitals to treat the patients. With the exponential growth in case numbers at the beginning of March, Luxembourg, as almost every country in Europa and worldwide, had no other choice than to shut down social interaction, and thus shut down public life, the places where people meet. We knew about the economic and social impact of these measures, but there simply was no alternative. From that moment, we decided economic countermeasures designed to quickly help businesses with cash flow problems and opened the “chômage partiel” regime to all companies impacted by the crisis. The situation required a reactivity so fast that the government had no other choice than to ask Parliament to launch a 3-month state of crisis, which the members of Parliament voted unanimously.
AMCHAM -When did you become aware of the extent of economic impact on employees and employers and how did your government develop a balanced approach that considered equally the needs of companies and employees and did so on both a short and long-term basis?
Prime Minister Bettel -When we took the measures to save lives, we were well aware about the impact that these were going to have on our economy. The decisions were often difficult to take. As a liberal, taking such restricting measures was the most difficult decision since taking office in 2013. We decided different helping packages for our businesses from the beginning, and constantly adapted them through the pandemic and the evolution of the situation. Of course, we always analyze all the factors and the impacts of our actions. We only closed businesses when there was the before mentioned risk of hospital overload. We need the right balance in order for patients to be able to receive the treatment they need.
AMCHAM -What supply chain logistics actions were taken to ensure the needs of the country were met without risk of hyper inflated prices or critical scarcities?
Prime Minister Bettel -Logistics was defined as a strategic priority, even before the first Corona cases were discovered in Luxembourg. Not to forget that Luxembourg developed into a real logistics hub in the heart of Europe during the last 15 years. Furthermore, our country is commercially well connected to other important hubs worldwide.
In practice, logistics were handled inside the crisis cell, where a specialized logistics unit was in charge of the national and international procurement and distribution. It was a mammoth task where many actors were involved, from the Army to CGDIS, from CFL to Cargolux, the municipalities and the postal services. A lot was based on confidence and good relations during negotiations. We know our partners very well and have built a strong relationship with them in the past, which helped a lot. Successful negotiations mean knowing your interlocutor, and especially local customs and values, very well. When negotiating with our Chinese partners, we speak mandarin, for example.
AMCHAM -We understand the US and NATO both helped supply aid that was needed. Please explain and indicate what other countries have helped as well.
Prime Minister Bettel -We bought sanitary material from many different countries. We are lucky to have Cargolux which can quickly travel to all parts of the world to get material.
NATO and our allies, or concretely through the NATO Support and Procurement Agency (NSPA), which is based in Capellen, Luxembourg, offered a military-grade tent structure for hospitals, allowing to increase our capacities in intensive care by almost 100 beds. This tent structure was assembled at CHL in Strassen for a worst-case scenario, if the capacities of national hospitals were saturated. Fortunately, this was never the case, but the structure gave us some security in our bed capacities. But also, we had support and were in close contact with many US companies based in Luxembourg such as DUPONT of course during this pandemic and had a well-functioning system of exchange and mutual support.
AMCHAM -How have you managed the severe challenge of balancing the needs to keep the economy and borders open with the surrounding countries and global trading partners?
Prime Minister Bettel -I would have preferred to have a common, structured and European response to the pandemic when it broke out. The Schengen treaty was de facto inoperative, the freedom of movement was severely undermined. For me, closing borders is never a preferred solution. Luxembourg is an open economy; we are strongly connected not only to the Greater Region, but also to our many long-term partners in all of Europe and even the world. We are proud to be international, multilingual and multicultural. Besides, we have 200 000 people crossing the border every day to come and work in Luxembourg. We thus definitely do not wish to refer to any measures that involve closed borders. I am satisfied that we have always found solutions with our neighbors concerning the cross-border workers and their taxation when working in the home office.
This being said, it is true that it was a difficult process during the Covid-19 crisis to balance the need to restrict freedom of movement with the need to keep the economy running. In our decision-making process, we had to take multiple variables into consideration – health and sanitary aspects of course, but also economic and social concerns. Luxembourg and the Greater Region need open borders for their businesses, their citizens and their health systems.
AMCHAM -What is the current health of the nation and what steps do you support to ensure a return to the prosperity, which Luxembourg has enjoyed for many years?
Prime Minister Bettel -Thanks to thorough budgetary efforts over the last years, we were in the lucky position to have sound public finances in place when the Covid-19 crisis started.
We were therefore able to intervene quickly, not only to provide direct financial aid to businesses, but also to allow for a flexible extension of short-term working arrangements in order to prevent a surge in unemployment.
These measures have obviously had an impact on our financial situation, and it is true that the public debt and deficit levels have increased. In international comparison however, we are still in a favorable position. Accordingly, the international rating agencies have been able to confirm Luxembourg’s triple-A rating with a stable outlook, thereby pointing out again the robustness of our public finances.
Importantly, the Government has decided to keep investments at a very high level over the next years. We believe that it is crucial now to set the right incentives and to support the economy in a sustainable manner. It is indeed our ambition, in Luxembourg and at EU level, to make all the necessary efforts to relaunch the economy, while at the same time making it greener, more digital, more resilient and fit for the long-term.
AMCHAM -What is your assessment of the social cohesion within Luxembourg and what further steps do you think advisable to take to maintain and enhance the social dialogue and cooperation between our inhabitants and institutions?
Prime Minister Bettel -Social cohesion is the backbone of our society in Luxembourg and a priority for the Government. Unfortunately, this crisis has been more difficult for some people than for others. Therefore, all along, it was important to us to do everything possible to steer against the risk of increasing inequalities.
We have decided a large set of measures to preserve jobs, prevent youth unemployment, to support the purchasing power by, for instance, increasing the cost-of-living allowance. In this regard, the regular exchanges that I was able to have with the social partners during the year were very helpful in keeping track with the developments and the requirements in the field. Overall, I am pleased to witness an undeniably strong solidarity in Luxembourg during the crisis.
AMCHAM -What vision and advise do you wish to share to our members and readers?
Prime Minister Bettel -2020 has been a difficult year for each and every one of us. But a crisis also offers opportunities.
I am optimistic that better times are not that far away. I motivate everyone to look positive into the future! Together, we can come out of the situation stronger than before. This year has pushed digitalization forward in a way unimaginable a couple of months ago. We have made spectacular advances in that field, digitizing our schools, our businesses, our meetings and our trade.
In 2021 the vaccine will help to bring us a “normal” and more liberties back. But I hope that the crisis will also help to create a “new normal”, where we as humans will strive to continue and strengthen our engagement for a greener, more sustainable future, without forgetting the solidarity, that has touched me profoundly this year.
To all readers, I wish you a very happy year 2021 and may everybody get some rest and quality time with family and his or her beloved ones over these days of the holiday season.