After presenting the new legal framework for Luxembourg's defence industry last week, Economy Minister Lex Delles said he hoped increased investment in the sector would also generate financial returns for the state.
Delles noted that several companies were already active in the defence industry in Luxembourg, but said the existing rules did not provide sufficient clarity.
"We have a 2022 law that allows the production of sporting weapons, but it does not cover every area. This new law will therefore establish a clearer framework", he said.
The government is also planning to expand the sector further. While NATO spending targets have prompted Luxembourg to increase its defence investment, Delles said the authorities also hoped the spending would deliver economic benefits.
Delles said Luxembourg wanted its increased defence spending to generate economic benefits at home, for example by encouraging suppliers to carry out maintenance work in the country and create local jobs, “so that the money being spent is not simply lost”.
The minister explained that the government was already in contact with companies specialising in maintenance that were interested in setting up at the former Liberty Steel site in Dudelange, where a new incubator is also planned.
"A traditional business in Luxembourg which might want to expand into the defence sector, would have to do research, development, in a secure framework."
But Delles ruled out any fighter jet, tank, or missile manufacturers establishing themselves in Luxembourg.
"We're looking more at software, space, satellite capacities, telecommunications, all sorts of sectors. It's important for Luxembourg to ensure that companies active in these fields are able to set up more broadly, so we can continue to develop this sector", he said.
Delles expressed hope that economy activity will kick off in Dudelange over the next nine to twelve months.
