Luxembourg’s recovery and resilience plan

RRF FUNDED PROJECTS IN LUXEMBOURG

WHAT’S IN THE PLAN?

The reforms and investments in Luxembourg’s plan approved by the Council on 13 July 2021, as amended on 17 January 2023, are helping the country to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition.

^{*This value includes also de part of the plan which is financed with national resources.}

• 12 investment streams and 8 reforms
• 68.8% of the plan will support climate objectives
• 29.6% will foster the digital transition

The transformative impact of Luxembourg’s plan is the result of a combination of complementary reforms and investments, which address several specific challenges and will support cohesion and boost growth potential in the long term. The reforms will address bottlenecks to lasting and sustainable growth, while investments are targeted at green and digital transition. They will contribute to clean energy and transport, biodiversity protection, as well as the digitalisation of public administration and, as part of a broader European project, developing and deploying an ultra-secure communication infrastructure based on quantum technology. The plan will also provide training to job seekers, temporary and older workers, improve the resilience of the healthcare system and increase the availability of affordable housing. The plan also promotes a transparent and fair economy through measures aimed at ensuring effective supervision and enforcement of the national anti-money laundering framework.

All measures have to be implemented within a tight timeframe, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

Luxembourg still has one of the highest greenhouse gas (GHG) emissions per capita in the EU, despite being a relatively low carbon-intensive economy. To reach climate neutrality, Luxembourg needs to significantly reduce emissions; notably in the transport and construction sectors.

Key measures for the green transition

• Luxembourg’s plan puts a strong focus on the green transition. Its contribution to the green transition amounts to 68.8% of its total allocation of €83 million.
• Specific measures include €30.5 million to enlarge the network of charging points for electric vehicles across the country. 
• The plan also directs €6 million to establish a 'Naturpakt' with municipalities to provide financial support for actions to protect nature and prevent biodiversity loss

Luxembourg is among the EU leaders in connectivity with high coverage of next-generation access networks. However, Luxembourg needs to invest in digital skills. In addition, the use of digital public services remains below the EU average.

Key measures for the digital transition

• Luxembourg’s plan contributes to the digital transition of the country with a broad and cross-cutting approach.
• Specific measures to support securing Luxembourg's digital transition include a €10 million investment and a related reform to support quantum-technology communication for ultra-secure connectivity solutions, to improve the security of public sector communications as part of a wider European project, and €13 million to digitalise the public administration, simplifying internal processes as well as those with firms and citizens. 
• The plan also includes an investment on future skills for workers and two investments to increase the efficiency of the health sector through its digitalisation.

Key macro-economic challenges for Luxembourg’s economy include, in particular, a relatively low activity rate for older workers, and a shortage of skilled workers, including in strategic sectors such as information and communication technologies and healthcare. In addition, sharply rising housing prices have an impact on housing affordability, which also risks amplifying inequalities.

Key measures in reinforcing economic and social resilience

• A contribution to skills development is provided by investments of €1.5 million in the vocational training programme “Futureskills”, which aim at developing digital and managerial skills among job seekers.
• The plan also includes a complementary reform, “Skillsdësch”, to design training programmes for the most promising job profiles.
• The single digital register for health professions as well as the reform redefining the competences, tasks and responsibilities of healthcare professionals will contribute to anticipating shortages of healthcare professionals.
• The reform of the “Housing Pact” will strengthen the public sector's capacity to increase the supply of affordable and sustainable housing.
• The plan also includes investments amounting to €12.7 million in the modernisation of the public administration and digitalisation of public services so that people and firms can more easily access these services.
• In the fight against money laundering and terrorist financing, the plan foresees the adoption of a new law to improve supervision against money laundering and to perform assessments of money-laundering and terrorist-financing risks in order to strengthen the resilience of the economy

More information on the event can be found here

Luxembourg’s plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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