For clear and ambitious economic cooperation between Luxembourg, Arlon and Bastogne

Economic growth

For clear and ambitious economic cooperation between Luxembourg, Arlon and Bastogne

Luxembourg and the districts of Arlon and Bastogne share a closely linked history, marked by territorial and political developments that have shaped our cross-border region. The division of the former Duchy of Luxembourg in the 19th century gave rise to a unique reality: a coherent cultural, human and economic space that is nevertheless divided by national borders. In the face of increasing economic, climatic and social challenges, this shared history must once again become a force for shaping the future.

A Luxembourg success … that is reaching its limits

The Luxembourg economic model is a success. It has created jobs, attracted talent and ensured enviable prosperity. But this success is putting increasing pressure on a limited territory: daily traffic jams, housing shortages, rising property prices, infrastructure congestion and cross-border worker fatigue.

It is neither sustainable nor desirable to concentrate more and more activities in a limited space. The risk is clear: an economy that ultimately suffocates due to a lack of space and limited mobility.

Against this background, closer economic cooperation with the neighboring Belgian districts of Arlon and Bastogne is a pragmatic solution that benefits all sides. The aim is neither blind relocation nor tax competition, but the controlled outsourcing of certain professional activities to Belgian territory in the spirit of a balanced partnership.

A pragmatic solution: better distribution of activities

Strengthening economic cooperation with the Belgian districts of Arlon and Bastogne offers a concrete answer. The goals are easy to understand: To locate certain professional activities linked to the Luxembourg economy on the other side of the border where space is available, while maintaining geographical and economic proximity.

It is not a question of brutally relocating existing jobs, but of encouraging the creation of new activities, offices, service centers or logistics centers on Belgian territory in direct connection with Luxembourg, through the creation of territories under shared sovereignty.

The legal restrictions are to be understood as

However, such cooperation requires a thorough analysis of the existing legal restrictions. In the area of direct taxation, the differences in the taxation of the income of natural persons and companies represent a first challenge. It is important to avoid any double taxation and at the same time ensure a fair distribution of tax revenues between countries. The existing tax treaties provide a solid basis, but need to be adapted to take account of new forms of cross-border establishment of companies and employees.

In the case of indirect taxes, particularly VAT, the main issue is to determine where the value is created and where it is taxed. Here, too, there are European regulations; the challenge is to apply these clearly and in a coordinated manner in order to avoid uncertainties.

Social security and labor law: protecting people comes first

Social security is often a cause for concern. It must be clear: no cooperation should be at the expense of employee protection. Depending on their actual place of work, employees are subject to the Belgian or Luxembourg system in accordance with European regulations. The most important thing is to ensure continuity of rights and transparency of status.

The employment contract and labor law are also the responsibility of the country in which the company is based. The existing differences must be explained, anticipated and integrated into the company’s projects. This diversity is not a problem in itself as long as it is known and respected.

Social security is another fundamental pillar. The status of workers, regardless of whether they are posted workers, cross-border workers or locally employed in Belgian subsidiaries of Luxembourg companies, must be clearly defined. Social security must not be weakened or instrumentalized; it must remain a factor of stability and social cohesion on both sides of the border.

Labor law and employment contracts are an important topic. The differences in terms of minimum wage, working hours, trade union representation or protection against dismissal must be known, respected and integrated into sustainable economic models. This diversity is not an obstacle, but a reality that needs to be organized intelligently.

A fair distribution of profits

For this cooperation to be truly beneficial for all sides, the profits must be shared. Belgium must benefit from jobs, tax revenues and increased regional development. Luxembourg, on the other hand, will gain flexibility, quality of life and the ability to continue its development without excessive congestion.

A responsible decision for the future

For Luxembourg voters, this is a social choice: to maintain our prosperity while improving our living conditions, reducing transportation times, limiting the impact on the environment and thinking about economic development on the real scale of our living space.

Strengthening economic cooperation with Arlon and Bastogne does not mean abandoning our model, but adapting it intelligently to the realities of the 21st century. Based on our shared history and a common vision for the future, we can create a more balanced, more efficient and more human cross-border area – for the benefit of all.

Finally, the issue of profit distribution requires particular vigilance. Luxembourgish investments on Belgian territory must create local added value: skilled jobs, tax revenues, infrastructure development. In return, Luxembourg companies benefit from a less restrictive environment in terms of land and mobility, while remaining close to their original ecosystem.

Structured economic cooperation between Luxembourg, Arlon and Bastogne is neither a utopia nor a renunciation of sovereignty. It is a strategic choice based on our shared history and with a view to the future. If it is approached with clarity, fairness and ambition, it can become a European model for cross-border win-win development.

In view of the current challenges, it is time to transform this fact into a structured economic project that benefits everyone.

Appendix 1

Bilateral agreement – structure

Territory under common sovereignty (rarer, more legal)

Article X – Creation of a joint development area

1. The States of [name of country A] and [name of country B] agree to establish a zone for joint development in the area delimited as follows: [exact geographical description].
2. The Joint Development Zone is intended for industrial and economic use, including but not limited to [sectors concerned: energy, industry, logistics, etc.].
3. The management and regulation of the zone shall be carried out jointly by the competent authorities of both States in accordance with the provisions of this Agreement.
4. Investments, taxes and the rights and obligations of economic operators are laid down in specific annexes, which are adopted by mutual agreement between the two parties.
5. Disputes relating to the use of the Zone shall be resolved through bilateral consultations and, if this is not possible, through [mediation, international arbitration or a designated court].

Article Y – Taxation, social security and workers’ rights in the joint development zone

1. Scope of application
2. This Article applies to all employees, workers and economic operators operating in the joint development zone established between [State A] and [State B].
3. Income tax and social security contributions
4. The income generated in the zone is subject to:
   1. either the tax laws of the employee’s country of residence;
   2. either a tax regime specifically defined for the zone, which is determined by mutual agreement.
   3. 2.2 The contracting parties undertake to avoid any double taxation and to coordinate the application of social security contributions.
5. Employment contracts and employment conditions
6. 8.1 Contracts concluded in the Zone shall comply with the applicable national legislation, unless otherwise provided for in this Agreement.
7. 8.2 The working conditions (remuneration, working hours, vacations, safety and security) must comply with the minimum standards agreed between the parties.
8. Pensions and social benefits
9. 9.1 Employees shall continue to pay contributions to their national scheme or, if the parties so decide, to a joint scheme specific to the zone.
10. 9.2 Pension rights, pensions and social benefits are guaranteed and transferable in the event of occupational mobility within the zone or between the contracting states.
11. Other services
12. Employees shall be treated equally with regard to family allowances, health insurance, severance pay and other social benefits in accordance with national provisions or provisions harmonized between the parties.