Speaking on the sidelines of the EU summit in Brussels, Prime Minister Luc Frieden struck a cautious tone regarding the recent spike in fuel prices, stating that “Europe has survived other crises”. However, he noted that it is currently too early to determine whether a policy response is necessary.
Following what he described as a difficult and strenuous summit, Frieden acknowledged that diesel prices have now exceeded €2 per litre. Despite this, he maintained that it remains premature to announce specific measures. He assured that Luxembourg is prepared for all eventualities, describing this preparedness as the government’s fundamental duty.
While the word “crisis” has been mentioned – specifically in a geopolitical context – Frieden suggested that the economic situation does not yet warrant the same label. For now, the government’s message is one of reassurance: “don’t panic” and “it’s still too early”.
The Prime Minister also highlighted that the government already contributes €150 million annually toward grid costs and noted that fuel excise duties in Luxembourg are lower than in neighbouring countries. This, he explained, limits the government’s fiscal flexibility. Nevertheless, he reiterated a commitment made prior to the summit: should the crisis persist, socially targeted measures would be introduced.
At the European level, member states have been granted leeway to implement targeted and time-limited flexibility measures if they wish to support their domestic industries. Meanwhile, the European Commission is expected to prepare further proposals to mitigate the crisis or relax regulations in time for the informal summit in Cyprus this April.
According to Frieden, the key to navigating future challenges lies in drawing lessons from the past. He stressed that the focus must remain on renewable energy and defence. Equally important, in his view, is maintaining competitiveness, which he directly linked to prosperity. As a member of the European People’s Party (EPP), he called on other centrist parties to swiftly approve the forthcoming omnibus legislation.
On the subject of migration, EU leaders signalled their intent to apply lessons learned from previous experiences. At the request of the Danish Prime Minister, a social democrat, this commitment was formally included in the summit conclusions.
Regarding support for Ukraine, Frieden confirmed that a €90 billion credit package will be disbursed over two years, despite continued opposition from Hungary. He added that the pipeline through which Hungary currently receives Russian oil is expected to be repaired within weeks, potentially leading Budapest to lift its blockade. This timeline might also coincide with the date of Hungary’s national elections, scheduled for 12 April.
