Chamber of Employees Questions Budgetary Allocations
The Chamber of Employees (Chambre des Salariés - CSL) in Luxembourg presented its official opinion on the government's 2026 draft budget on Thursday, November 20, 2025, raising significant concerns about its priorities. The CSL criticized the substantial increase in defense spending as 'incomprehensible', particularly in light of stagnating or declining financial commitments to housing and ecological transition.
CSL President Nora Back and Director Sylvain Hoffmann led the presentation of the assessment, which concluded that the government is missing a key political opportunity to address pressing social challenges.
Increased Defense Spending Under Scrutiny
Luxembourg's draft 2026 budget, presented by Finance Minister Gilles Roth to the Chamber of Deputies on October 8, 2025, includes plans to boost defense spending to approximately €1.3 billion in 2026. This figure represents an increase of about half a billion euros compared to 2025, and an additional €366 million compared to the multiannual budget. This aligns with Luxembourg's commitment to NATO to raise defense spending to 2% of its Gross National Income (GNI) by 2030.
However, the CSL views this prioritization as excessive, especially when contrasted with other critical sectors.
Concerns for Housing and Ecological Transition
The CSL highlighted that expenditures dedicated to housing remain 'largely insufficient' and do not adequately reflect the severity of the housing crisis in Luxembourg. While the government has allocated €2 billion over four years for affordable housing, including €480 million for direct purchases of new units, an 'investment gap' of nearly €700 million has been identified for the period 2024-2027 compared to previous budget plans.
Similarly, the CSL noted a decline in funds allocated for the ecological transition. The government's budget earmarks €3.4 billion for the national energy and climate plan over four years, with €521 million specifically for environmental spending in 2026. The budget also includes an increase in carbon taxes by €5 per ton, reaching €45 per ton in 2026.
Unaddressed Social Issues and Public Finances
The Chamber of Employees also criticized the budget for its lack of concrete measures to tackle social issues, particularly poverty. The CSL pointed to Luxembourg's poor performance in addressing child poverty and in-work poverty, regretting the absence of clear government initiatives in this area.
Despite the government's 'alarmist' rhetoric regarding public finances, the CSL emphasized that Luxembourg is projected to maintain the lowest public debt in the European Union in the coming year. The 2026 budget forecasts a central government deficit of €1.49 billion.
6 Comments
Manolo Noriega
The article highlights the dilemma of balancing international commitments with pressing local needs like housing. While defense spending is a strategic decision, the 'investment gap' in housing suggests a real problem that needs more attention.
Fuerza
The CSL always finds something to complain about. Governments have tough choices to make.
Ongania
The CSL is right to question priorities, especially given the low public debt and the severity of social issues. However, the NATO commitment is a geopolitical reality, making budget allocation a complex challenge for any government.
Fuerza
It's understandable that the government needs to meet defense targets, but the CSL raises valid points about the impact on vulnerable populations. A more transparent explanation of these trade-offs would be helpful.
Manolo Noriega
Defense over housing? This government clearly doesn't care about its citizens' basic needs.
ZmeeLove
Increasing carbon taxes is a step towards ecological transition, but if overall funds for the environment are declining, it feels contradictory. The government needs a clearer strategy that addresses both defense and climate change holistically.