Duchy of Hazard
Fernand Grulms of Luxembourg's national financial center is not amused by Eric Pape's tongue-in-cheek take on the country.
Eric Pape (“The Lap of Luxembourgery,” September/October 2011) describes Luxembourg as a country rotten to the core. We write not to question the article’s style or humor, but to get some facts straight.
Among the numerous inaccuracies in this article is the myth of the GDP per capita figure. This figure is relatively meaningless when applied to Luxembourg and cannot be used to demonstrate the country’s wealth. Luxembourg’s GDP is generated not only by the local workforce but, as Pape admits, by a large number of cross-border commuters. These represent some 150,000 out of a total working population of just 340,000. With foreign workers added to the head count, Luxembourg’s per capita GDP falls by around 45 percent.
Pape writes that Luxembourg’s per capita external debt (some $3.76 million per person) is 84 times that of the debt-ridden United States. According to Eurostat statistics, the global level of Luxembourg public debt in 2010 was €7.66 billion (around €15,200 per capita.) Hence the external debt cannot be several trillion euros.
In addition to relying on inaccurate statistics, Pape’s article also displays a poor understanding of politics. He says that democracy in Luxembourg is a joke because the ruling family is hereditary and appoints certain members of parliament. This is not true. Moreover, parliamentary monarchy is a widespread model, which democracies including Britain, Denmark, the Netherlands, Norway, Spain, and Sweden have adopted.
Luxembourgers do not suffer from a sense-of-humor failure, but we expect articles about our country to be well-researched and constructively argued. Given that Foreign Policy is an opinion leader in its field, poorly crafted texts can mislead readers and raise questions about the credibility of a distinguished publication.
Chief Executive Officer
Luxembourg for Finance
Eric Pape replies:
I was willing to risk my well-being when Foreign Policy sent me, its intrepid reporter, into the bowels of Luxembourg to write an irony-laden dispatch that mocks myself and parachute journalism in general, but I try my best to relegate my banking and debt analysis as a journalist to my own banking and debts.
So, for the most sensitive numbers — those suggesting that Luxembourg has an outlandish external debt (which is not to be confused with the country’s honorably low public debt) — I sought out “experts.” One was the genial (and sadly recently deceased) parliamentarian and banking-world expert Lucien Thiel. Thiel readily acknowledged the famously high external debt data that I brought up with him, and he contextualized it as the natural extension of the tiny country’s unparalleled success with investment funds, among other things. In his telling, Luxembourg’s external debt is a sign that it is economically creative, and thriving.
Interestingly, Luxembourgian folk wrote to explain away pretty much all the data brought up in my dispatch. Could it be that Luxembourgers are so dejected that the only statistics that they have faith in involve good news: the puny public debt, low unemployment, and projections for vibrant economic growth? Maybe they are right about that. (As for the country’s dismal score on the happiness ranking, I welcome travel donations so that I can visit similarly unhappy peoples and rank them myself.)
If Luxembourg really is the dark, corrupted heart of Europe, then one thing is clear to me: Evil sure picked a pleasant place to live.