Luxembourg will convene a tripartite meeting in the coming weeks as the government braces for the economic fallout of the Iran conflict, Prime Minister Luc Frieden confirmed following a government council meeting on Wednesday. Frieden warned that the situation is pushing the international community toward an energy crisis, if it has not already entered one.
As a result, inflation is expected to rise in the coming months, while economic growth will likely fall short of earlier forecasts.
Frieden had previously argued that a tripartite meeting between government and social partners is a crisis tool and that the moment to deploy it had not yet arrived. The shift comes as pressure builds, with the Christian Social People's Party (CSV) warning that the surge in energy costs is pushing the country towards a difficult economic situation.
Earlier, CSV secretary general Alex Donnersbach had spoke to RTL and said a tripartite meeting could help address the situation, while cautioning it is not a cure-all.
Frieden stressed the need for calm and measured decision-making, ruling out rushed actions. The government's priority, he said, is to maintain social cohesion, protect purchasing power, and safeguard the competitiveness of businesses to preserve jobs.
The PM added that the economic consequences of the Iran conflict are creating significant uncertainty and will have a direct impact on households, with price increases not only in energy but, over the medium term, also in areas such as food.
Frieden also referred to an upcoming summit in Cyprus, taking place Thursday and Friday, where the Iran conflict will be discussed.
On foreign policy, he reiterated Luxembourg's full support for the territorial integrity of Lebanon and voiced clear criticism of Israel, stating that Israeli attacks are not supported by Luxembourg. The Grand Duchy, he added, consistently advocates for ceasefires and peace.
The government council on Wednesday also approved the draft law for an increase in child benefits in 2027. From next year onwards, an additional €45 will be paid for children up to the age of 12. For children over 12, the increase will be €60.
The draft bill to improve the penal code to better protect victims of digital violence has also been sent on to the next stages of the legislative process.
Another topic discussed was the feedback from the consultation process on the climate strategy.
