“Our economy will be 25% larger than in 2013”: Pierre Gramegna, Minister of Finance, Luxembourg

Luxembourg’s economy is forecast to continue growing at twice the OECD avereage this year. Minister of Finance Pierre Gramegna explains what’s driving sustained growth.

Where is the economy heading in 2018?

If we continue to grow by 4% in 2018, our economy will be about 25% larger than in 2013. This is due to the financial center becoming a hub for global private banking, the fund industry writing new records, and the service economy supporting new projects, such as space mining.

PIERRE GRAMEGNA, MINISTER OF FINANCE OF THE GRAND DUCHY OF LUXEMBOURG

How have financial transparency reforms changed Luxembourg?

After we abandoned bank secrecy in 2014, we stood out much better because we now comply with best international standards. Together with the EU, Luxembourg is among the most ambitious places in the world that is embracing banking transparency.

Why is Luxembourg so attractive for global companies?

What makes Luxembourg truly attractive is our triple-A credit rating with a stable outlook. Moreover, we have a reasonably attractive corporate tax rate, which stands at 18% in 2018, and a highly productive population in the heart of the EU.

What kind of innovations are you making in the finance sector?

Luxembourg has been one of the top innovators in recent years. We recently launched the first investment fund using blockchain technology. Our Infrachain project is a public private partnership, consumer-friendly layer on blockchain. This is a national project that everyone will be able to use. Furthermore, there is our new Luxembourg House of Fintech, which is an incubator that has dozens of companies already there. Aside from this, our stock exchange was the first in the world to create a dedicated green securities exchange. Luxembourg is also the first EU member state to establish a joint climate fund with the EU, which was done with the EIB as an accelerator for promoting investment funds in the green or sustainable economy. Furthermore, the World Bank established its green cornerstone fund here, which is its first major green investment fund in Luxembourg. Roughly one-third of all sustainable development investment funds are located in Luxembourg, so our market share is very high.

How is the government promoting scientific research and innovation?

Luxembourg has become a pioneer in innovation because we are a very open country in terms of trade and the flow of people. We listen to what outsiders tell us, knowing that they can help us innovate better. This openness ensured, for example, that we sealed an important satellite project in the 1980s, which was the world’s largest privately operated satellite. Today, we are real pioneers in developing space mining. At a time when many question the rationale of an open market and open trade, we are a standout example proving that being open creates chances for success.