5.8% inflation this year, 2.8% next year. If they had not been postponed, more wage indexations would have been triggered earlier than expected. The parliamentary opposition criticised the fact that the government has currently no answer at hand to react to the loss of purchasing power.
The situation is becoming worse than the scenario that served as a basis for the tripartite negotiations. The previous STATEC models are now outdated, said MP Myriam Cecchetti from the Left Party (Déi Lénk). “They should already be recalculated and adjusted again,” the MP pointed out, criticising that “the ‘overcompensation’, as they say, is limited in time”. Cecchetti wondered what will come next and stressed that “people are having more and more problems with the current inflation”.
It is now clear that the wage indexation announced for August could already be due in June. The measures resulting from the tripartite agreement, however, provide that it will not be triggered, but postponed to spring 2023. However, STATEC recently pointed out that it is becoming increasingly likely that another wage indexation will be due before April 2023.
Three ministers were present on Thursday at the meeting of the Special Tripartite Committee in the Chamber of Deputies. The co-chairman of the Christian Social People’s Party (CSV) parliamentary group, Gilles Roth, however, deplored the lack of explanations.
Roth criticised that “no one was able to give us an answer today” to the CSV’s question, how the government intends to compensate the loss of purchasing power from an additional wage indexation. The CSV finds this “worrying” and called on the government to work alongside STATEC to present “updated figures” to the MPs. Considering that the Chamber of Deputies is debating a package worth €1 billion, Roth argued that “full transparency is a must”.
During a press conference on Wednesday, Minister of the Economy Franz Fayot assured that “no wage indexation will be cancelled”. However, the Minister acknowledged that this meant that once the current tripartite agreement expires in late 2023, several cumulative wage indexations would have to be paid out at the same time. Myriam Cecchetti made it clear that she “cannot imagine” that salaries would then increase by, for instance, 7.5% all at once. “One way or another, some wage indexations will not be paid out,” the MP criticised.
The new STATEC projections make additional compensation necessary, according to the president of the Alternative Democratic Reform Party (adr) parliamentary group, MP Fernand Kartheiser. The MP argued that in light of the updated calculations, the tripartite negotiations should continue to “at least assess which measures are necessary to compensate people with low incomes in the next two years”. For Kartheiser, trade unions, employers, and the government have “a responsibility” to keep negotiating.
Both the CSV and the Left Party demand that in the long term, tax tables should be adjusted for inflation. The Left Party also sees the current situation as confirmation for their argument that the country “badly needs structural changes”.
The Ministry of Finance has confirmed to Paperjam that the tax credit for energy costs will be paid out in July, i.e. at the time when STATEC expects the next wage indexation to be due. According to our colleagues from RTL.lu, STATEC is currently dealing with the questions raised by the MPs in the context of the updated projections.
