How does Luxembourg prevents his financial center from « getting a cold »?

If the financial sector gets the runny nose, « Dat fully ruddles land, » said the DP MP André Bauler In his interpellation on Thursday in the Chamber. He devoted this to the condition of the financial center, which is under pressure on various fronts.

These include the rapid technological change with upheavals in artificial intelligence and blockchain, as well as the increased competition of countries such as Ireland, but also the increasingly unstable world situation. As evidence, Bauler referred to the customs policy of the US President Donald Trump, among other things, which resulted in a sale on the stock exchanges at the beginning of April, such as the 2008 financial crisis.

Prosperity depends on the financial center

« Whether we like it or not, our prosperity depends to a great extent from the financial center; directly and indirectly, » said Bauler. The central position of the industry for the country was not questioned in the debate by anyone, neither on the right nor on the left wing.

For this, the figures that were made by Bauler and Finance Minister Gilles Roth (CSV), too, were, too clear: around a quarter of the gross domestic product, a fifth of the income tax revenue, 40 percent of direct taxes; A total of 8.2 billion euros and thus around a third of the state budget are generated in the financial sector. The industry directly employs around 70,000 people in the country. In comparison, the « classic industry together with the construction industry makes up almost twelve percent and agriculture less than half a percent, » said Bauler.

« An external financial shock would therefore have serious consequences for our economy, » warned the DP MP. Although he says that the financial market is more diversified and therefore more resistant than in the outbreak of the banking crisis in 2008, he emphasizes how important it is for the whole country that the financial center is repeatedly reinvented. This also includes the early occupation of new niches. « We must not lose sight of niches like tokenization or blockchain, » said Bauler.

To fill new niches

For Finance Minister Roth, the so -called neobans, i.e. internet banks without their own branch network, are another potential niche. This is an « enormous market », especially in the global south, with billions of possible customers in regions such as Africa or India. Geographically, he sees growth opportunities for the financial center, especially in shops with the Latin American continent, where one is currently still underrepresented.

With regard to the ETF market, in which Luxembourg had recently lost massive ground to the competitor Ireland, the finance minister refers to the suspension of subscription tax in December for actively managed funds. Since then, the managed assets in this area have increased from around 340 billion to 450 billion.

Most speakers in the debate demanded that Luxembourg should continue to try to be a pioneer in the green finances. Here only the left-wing MP poured David Wagner Water in the wine. In the meantime, the climateinance area is stagnating and many American companies have long since turned away.

In order to strengthen the financial industry, a Motion submitted a motion in which the government was asked, among other things, to work at the European level to expand the internal market for capital.