Who is actually planning for the next 20 years?

Luxembourg finally needs a policy for the next 20 years

Luxembourg is currently often described as a company. Prime Minister Luc Frieden deliberately presents himself as the pragmatic manager of a modern state. It is all about competitiveness, location policy, investor confidence, triple A rating and efficiency. The country is to be managed professionally – rationally, stably and economically successfully.

There is nothing wrong with that at first. But if Luxembourg really is to be run like a modern company, then an uncomfortable question arises: where is our strategic supervisory board?

After all, every professionally managed company not only has an operational management team, but also a board that thinks long-term. A CEO takes care of day-to-day business, short-term stability, budgets, projects and operational decisions. The Board of Directors or Supervisory Board, on the other hand, deals with strategic issues: Where will the company be in ten or twenty years’ time? What risks will arise in the long term? What infrastructure needs to be built today so that the system will still function tomorrow?

It is precisely this long-term thinking that Luxembourg is increasingly lacking.

A policy in permanent five-year mode

Theoretically, parliament could take on this role. In practice, it hardly ever does.

Political reality is dominated by:

• Election cycles,
• Media logic,
• Party tactics,
• Coalition arithmetic,
• Surveys,
• short-term pressure.

As a result, even fundamental questions about the future are increasingly being pushed into the rhythm of legislative periods.

We see the result everywhere:

• Housing construction has been discussed for decades without consistently solving the structural causes.
• Traffic problems are getting worse faster than new infrastructure is being built.
• The healthcare sector is heading for massive staff shortages.
• The pension debate is repeatedly postponed.
• The long-term consequences of population growth remain largely unclear politically.
• Energy and infrastructure projects change again with every government.

Luxembourg often appears to be excellently managed – but not strategically managed in the long term.

The country has highly professional structures for:

• Banking supervision,
• Budget control,
• European regulation,
• Financial stability,
• Rating protection.

But where are the equivalent institutional structures for the country’s long-term future?

To put it provocatively: There are more long-term protection mechanisms for the AAA rating than for housing construction, healthcare or mobility.

The real problem is not the government – but the system

This is not about apportioning blame to individual parties. The country’s major parties – CSV, LSAP, DP and déi Gréng – have managed Luxembourg stably and made it economically successful for decades. No one can seriously claim that Luxembourg is a poorly organized country.

But it is precisely these parties that bear joint responsibility for a political culture that makes long-term thinking increasingly difficult.

After all, those who have governed or co-governed almost continuously for decades inevitably operate within the same political mechanisms:

• Legislative periods,
• short-term compromises,
• Coalition logic,
• tactical priorities,
• political corrections from government to government.

The problem is therefore less ideological than structural. Our political institutions reward short-term responsiveness more than long-term planning.

And this is precisely why the established parties are finding it difficult to tackle this problem in principle. Not necessarily out of ill will – but because they themselves have become part of the political culture that Luxembourg is increasingly thinking in four- or five-year terms.

Luxembourg needs a Future Commission

Other countries have begun to respond institutionally to precisely this problem.

Finland, for example, has a parliamentary committee forthefuture, the “Committee for the Future“, which deals with technological, social and economic developments in the long term. It analyzes scenarios, examines megatrends and discusses long-term strategies – regardless of short-term election cycles.

Luxembourg needs something similar.

A national Future Commission could:

• define long-term infrastructure goals,
• develop binding 20-year plans,
• Analyze the effects of demographic developments,
• Secure housing, mobility and health strategies in the long term,
• Develop future scenarios for the economy and labor market,
• secure strategic projects across party lines.

This is expressly not about abolishing democracy or disempowering elected governments.

On the contrary: such a structure could make democracy more stable and more responsible.

Because democracy does not just mean responsibility for the next elections. Democracy also means responsibility for the next generation.

Not everything should be an election issue

There are areas that should actually be removed from short-term day-to-day politics.

No one would seriously accept that every four years the country’s entire electricity supply is fundamentally reorganized. No one would want bridge building, water supply or aviation security to become a constant field of party political experimentation.

So why do we accept precisely this uncertainty with:

• Residential construction,
• care infrastructure,
• Traffic planning,
• Hospital capacities,
• pension systems,
• Education,
• Digitization?

Major infrastructure and social projects require planning security over decades – not just until the next election.

Of course, democratically elected governments must continue to be able to set priorities. But within clearly defined long-term guard rails.

After all, a state cannot act strategically in the long term if every government realigns large parts of its long-term planning.

The real question for the future of Luxembourg

Luxembourg often discusses growth, the economy and competitiveness. But far too rarely do we discuss the actual core issue:

• What kind of country do we want to be in twenty years’ time?
• How many people should Luxembourg be able to support in the long term?
• How do we organize mobility in a country with a growing population?
• How do we finance a healthcare system with massively increasing staffing requirements?
• How do we secure pensions in the long term?
• How do we prevent housing from finally becoming a luxury good?
• How do we maintain social cohesion in an increasingly complex country?

These issues cannot be seriously resolved within individual legislative periods.

And perhaps this is precisely the point at which Luxembourg needs to rethink its policy. Because a modern country not only needs good administration. It also needs a long-term strategic direction.

Or to put it another way: A CEO alone is not enough.

Even the most successful companies know that long-term stability can only be achieved if someone consistently focuses on the next twenty years.

Perhaps it is time for Luxembourg to start doing just that. Maybe it’s time for a sensible alternative.