The European Commission's latest report on Luxembourg's policies is not filled with praise for the Grand Duchy's policies. The Brussels-based institution has outlined air pollution and excessive road traffic as one of Luxembourg's main issues.
The amount of cars on the roads during rush hours is creating an especially significant issue for the Grand Duchy in terms of its competition and environmental aims, the European Commission has claimed. The report went on to affirm that Luxembourg will not be able to cut its greenhouse gas emissions by 20% for 2030 if it does not propose new measures targeting road congestion.
The European Commission has also outlined the high costs of housing, the low taxes on fuels, and the cross-border workers travelling from their country of residence to Luxembourg on a daily basis as contributing to Luxembourg's lack of progress in improving its air quality and traffic issues.
Luxembourg's housing situation was another issue deemed a 'severe problem' by the European Commission. Whilst Luxembourg's population is growing, the country is pursuing interesting investments in the domain of housing, and the Grand Duchy has a high number of cross-border workers, the European Commission has criticised that the country has too few housing offers and investments.
Landowners are not sufficiently motivated to sell their land or build additional housing, according to the European Commission. As a result, the Brussels institution has pinned the blame on the authorities, who should work to create incentives. The report further claimed that the country's appeal is 'clearly impacted' by its inadequate housing offer.
The report also targeted Luxembourg's fiscal policies, maintaining that too many large businesses are able to take advantage of the national taxation system in order to benefit from aggressive tax conditions. This, the report continued, occurs despite the government making some efforts to curb this behaviour. The report based its finding on the extremely high number of dividend, interest, and licence transfer payments in Luxembourg's GDP.
Finally, the European Commission believes Luxembourgers do not work long enough. The report advised the authorities to take necessary measures to ensure that residents have longer work periods.
The European Commission's report is yet to be presented to the ministerial council of the European Union. The council will then vote on whether to approve the content as its official recommendation for the Grand Duchy.
