At the beginning of 2020, the shock was as sudden as it was unexpected and the past year continued to be exceptional in many ways: healthcare systems and hospitals overwhelmed because of the virus, health measures, population lockdowns, massive use of teleworking in sectors where it is possible, administrative closures of businesses, etc. Countless unprecedented measures.

Alongside the humanitarian and health tragedy, the COVID-19 crisis has had an unprecedented impact on the global economy, and therefore on the European and Luxembourg economies. In the Grand Duchy, which is one of the world’s five most open economies, the general lockdown and the sudden halt to economic activity are threatening the foundations of a healthy, stable, prosperous and dynamic economic and financial ecosystem.

Luxembourg has enjoyed higher-than-average growth for some time now – attributable to a fast-growing population driven by our attractive economy. Lately, however, the word ‘growth’ seems to be acquiring increasingly negative connotations. Critics of growth point to undesirable consequences like the high cost of housing, daily traffic jams, the impact on our environment, and the associated pressure on living conditions.

The implementation of a European Digital Single Market is regarded as one of the top ten[1] political priorities of the European Commission, and for good reason as digital technologies and innovations are nowadays genuine game-changers with the power to reshape societies and economies. The use of ICT (Information and Communication technologies) unlocks a window to a promising more inclusive and sustainable future, whereas smart cities are flourishing, citizens have a better access to information and education, companies’ decision making is easier and public services are optimized, to name but a few of the numerous possibilities offered by digitalisation.

As one of the most open economies in the world, the question of free trade is of tremendous importance for Luxembourg. Free trade is not only about a sound economic situation, but also the well-being of citizens, especially the less well-off, and the environment. Is free trade inherently bad for these three pillars of sustainable development, or are sustainable development and free trade actually two sides of the same coin?

As announced in my previous blog, I am going to dwell a bit on the relationship between Luxembourg and the Association of South-East Asian Nations (ASEAN), a best practice and obvious illustration of the way we cultivate, maintain and foster economic and diplomatic relations with economies that are of key interest for our members, Luxembourg’s businesses. Continue reading →