Luxembourg 2015.

118 Pages·2015·2.966 MB·English

by  OECD

OECD Economic Surveys O
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LUXEMBOURG D
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SPECIAL FEATURES: FINANCIAL SECTOR; DIVERSIFICATION OF THE ECONOMY n
o OECD Economic Surveys
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Most recent editions u
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Australia, December 2014 Israel, December 2013 ey LUXEMBOURG
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Austria, July 2013 Italy, February 2015
Belgium, February 2015 Japan, April 2013
Brazil, October 2013 Korea, June 2014
Canada, June 2014 Latvia, February 2015
Chile, October 2013 Luxembourg, March 2015
China, March 2015 Mexico, January 2015
Colombia, January 2015 Netherlands, April 2014
Czech Republic, March 2014 New Zealand, June 2013 V MARCH 2015
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Denmark, January 2014 Norway, March 2014 lu
Estonia, January 2015 Poland, March 2014 m
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Euro area, April 2014 Portugal, October 2014 2
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European Union, April 2014 Russian Federation, January 2014 1
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Finland, February 2014 Slovak Republic, November 2014 /
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France, March 2015 Slovenia, April 2013 2

Germany, May 2014 South Africa, March 2013
Greece, November 2013 Spain, September 2014
Hungary, January 2014 Sweden, March 2015
Iceland, June 2013 Switzerland, November 2013
India, November 2014 Turkey, July 2014
Indonesia, March 2015 United Kingdom, February 2015
Ireland, September 2013 United States, June 2014
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Volume 2015/12 ISSN 0376-6438
2015 SUBSCRIPTION
March 2015
(18 ISSUES)
M
ISBN 978-92-64-23065-1
9HSTCQE*cdagfb+ a
10 2015 11 1 P r
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h
2
0
1
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OECD Economic Surveys:
Luxembourg
2015
This document and any map included herein are without prejudice to the status of or
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Pleasecitethispublicationas:
OECD(2015),OECDEconomicSurveys:Luxembourg2015,OECDPublishing,Paris.
http://dx.doi.org/10.1787/eco_surveys-lux-2015-en
ISBN978-92-64-23065-1(print)
ISBN978-92-64-23066-8(PDF)
Series:OECDEconomicSurveys
ISSN0376-6438(print)
ISSN1609-7513(online)
OECDEconomicSurveys:Luxembourg
ISSN1995-3720(print)
ISSN1999-0782(online)
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TABLEOFCONTENTS
Table of contents
BasicstatisticsofLuxembourg,2013.......................................... 7
Abbreviationsandacronyms................................................. 8
Executivesummary......................................................... 11
Mainfindings........................................................... 12
Keyrecommendations................................................... 13
Assessmentandrecommendations........................................... 15
Macroeconomicoutlook ................................................. 17
Recommendationsonmacroeconomicpolicies.............................. 25
Strengtheningtheperformanceandresilienceofthefinancialsector .......... 25
Recommendationsonthefinancialsector.................................. 28
Fosteringtheemergenceofinnovativeindustries............................ 28
Greeninggrowth........................................................ 45
Recommendationsonraisinghumancapitalandenhancingresourceallocation ...... 48
Bibliography............................................................ 48
Annex.Follow-uptopreviousOECDpolicyrecommendations .................... 51
Thematicchapters
Chapter1.Newchallengesahead–Strengtheningtheperformanceandresilience
ofthefinancialsector ................................................... 59
Thefinancialsectorisexceptionallylarge.................................. 60
Challenges............................................................. 68
Recommendationsonthefinancialsector .................................... 75
Bibliography............................................................ 76
Annex1.1.Measuringoutputandproductivityinthefinancialsector........... 77
Chapter2.Fosteringtheemergenceofinnovativeindustries ..................... 79
Diversifyinggrowth ..................................................... 80
Fosteringentrepreneurship............................................... 83
Gettingworkerstomovetonewhighvalue-addedactivitiesandraising
labourforceparticipation ................................................ 100
Recommendationsonraisinghumancapitalandenhancingresourceallocation ...... 107
Bibliography............................................................ 108
Annex2.1.Luxembourg:Potentialoutput ................................... 111
OECDECONOMICSURVEYS:LUXEMBOURG©OECD2015 3
TABLEOFCONTENTS
Boxes
1. Thegovernment’sclusterinitiative..................................... 37
1.1. Luxembourg’sresponsetotherecommendationsbytheGlobalForum
onTransparencyandExchangeofInformationforTaxPurposes............ 70
1.2. MacroprudentialmeasurestakenbytheCSSFandtheBCL ................ 74
2.1. R&Daidschemesin2013 ............................................. 88
2.2. Thegovernment’sclusterinitiative..................................... 92
Tables
1. Macroeconomicindicatorsandprojections.............................. 21
2. High-techmanufacturingandknowledge-intensiveservicesindustries ..... 31
1.1. CapitaladequacyrequirementsforbanksinLuxembourg ................. 73
2.1. High-techmanufacturingandknowledge-intensiveservicesindustries ..... 81
2.2. Maximumaidintensitiesandamountsoftheaidschemesestablished
bytheLawof5June2009 ............................................. 87
2.3. AmountsofR&DaidundertheLawof5June2009 ....................... 88
2.4. NationalCreditandInvestmentCompany,overviewofoperations1978-2013 96
Figures
1. DifferenceinGDPpercapitainthe10OECDeconomies
withthehighestGDP................................................. 16
2. Well-beingoutcomes:BetterLifeIndex ................................. 17
3. Macroeconomicdevelopments ........................................ 18
4. CurrentaccountaspercentageofGDP.................................. 19
5. Assetsofbanksandinvestmentfunds.................................. 19
6. Bankcreditandnon-performingloans.................................. 20
7. Sectoraloutputdivergedduringthecrisis............................... 20
8. Evolutionofthefiscalposition ........................................ 22
9. Labourforceparticipationratesovertime............................... 23
10. Developmentsintaxrevenuesfromthefinancialsector .................. 24
11. Cost-to-incomeratiointhebankingsector,2011......................... 26
12. DepositsheldbycreditinstitutionsinLuxembourg....................... 27
13. Trendproductivitygrowth,cumulated.................................. 28
14. Trendunemploymentandproductivity ................................. 29
15. Shift-shareanalysisoflabourproductivitygrowth ....................... 30
16. ServicesTradeRestrictivenessIndex(STRI):Luxembourg.................. 32
17. InternationalcomparisonofGVCparticipationindex
forselectedindustries,2009........................................... 33
18. Investmentinknowledgebasedcapital,2010............................ 34
19. Researchanddevelopmentexpenditure ................................ 34
20. Trademarkapplications,2009-11average................................ 35
21. Luxembourg:Factorsconsideredmostproblematicfordoingbusiness...... 35
22. ProductMarketRegulation:Barrierstoentrepreneurship.................. 36
23. VenturecapitalinvestmentasapercentageofGDP....................... 39
24. SMEscollaborationoninnovation...................................... 40
25. Educationalattainmentof25-64year-olds,2012 ......................... 40
26. Successfulcompletionofuppersecondaryprogrammes,2012 ............. 41
4 OECDECONOMICSURVEYS:LUXEMBOURG©OECD2015
TABLEOFCONTENTS
27. Theinfluenceofparentalbackgroundonstudentachievement
insecondaryeducation............................................... 41
28. Protectionofpermanentworkers,2013 ................................. 43
29. Femalelabourmarketparticipation,2013............................... 45
30. Revenuesfromenvironmentaltaxes ................................... 46
31. EffectivetaxratesonCO inOECDcountries ............................ 47
2
1.1. Assetsofmonetaryandfinancialinstitutes(MFIsexcludingtheEurosystem)... 61
1.2. BanksinLuxembourgbyorigin(end2014) .............................. 62
1.3. Fundinginterconnectionsbetweencreditinstitutions
andfinancialandnon-financialsectors................................. 63
1.4. Financialsectordevelopments ........................................ 64
1.5. Credittotheprivatenon-financialsectorbybanksinLuxembourg ......... 64
1.6. Bankcreditandnon-performingloans.................................. 65
1.7. Banks’capitalratios.................................................. 66
1.8. Cost-to-incomeratiointhebankingsector,2011......................... 66
1.9. Investmentfunds.................................................... 67
1.10. Theinsurancesector................................................. 67
1.11. Developmentsintaxrevenuesfromthefinancialsector .................. 69
1.12. DepositsheldbycreditinstitutionsinLuxembourg....................... 71
1.13. CreditgrantedbycreditinstitutionsforrealestatelocatedinLuxembourg .. 72
1.14. BranchesandsubsidiariesinLuxembourgbyforeigncreditinstitutes....... 75
2.1. Trendunemploymentandproductivity ................................. 80
2.2. Investmentinknowledge-basedcapital,2010............................ 82
2.3. Hourlylabourcostsbyeconomicsector,2012............................ 83
2.4. InternationalcomparisonofGVCparticipationindex
forselectedindustries(2009).......................................... 84
2.5. Participationandpositionincomputerservicesglobalvaluechains,2008 ... 85
2.6. Patentsandtrademarkspercapita,2009-11 ............................. 85
2.7. Researchanddevelopmentexpenditure ................................ 86
2.8. GovernmentfinancedR&Dinthebusinesssector,
bythesizeofthefirm,2011........................................... 88
2.9. Femaleresearchersbysectorofemployment,2011....................... 89
2.10. ProductMarketRegulation:Barrierstoentrepreneurship.................. 90
2.11. Publictelecommunicationsinvestmentpercapita........................ 92
2.12. SMEscollaborationoninnovation...................................... 93
2.13. VenturecapitalinvestmentasapercentageofGDP....................... 95
2.14. Averagesizeofstart-upandoldfirmsacrossindustriesandcountries ...... 96
2.15. Educationalattainmentof25-64year-olds,2012 ......................... 97
2.16. Salarycostofteachersperstudent..................................... 97
2.17. Theinfluenceofparentalbackgroundonstudentachievement
insecondaryeducation............................................... 98
2.18. Successfulcompletionofuppersecondaryprogrammes,2012 ............. 99
2.19. Protectionofpermanentworkers,2013 ................................. 101
2.20. Gapsinlabourmarketperformancebetweennativesandforeign-born
inOECDcountries ................................................... 104
OECDECONOMICSURVEYS:LUXEMBOURG©OECD2015 5
TABLEOFCONTENTS
2.21. Changeintheproportionofhighlyeducatedmenandwomen
amongrecentimmigrantsandthenative-bornpopulation
between2000-01and2009-10 ......................................... 105
2.22. Femalelabourmarketparticipationrate,2013 ........................... 107
2.A1. RatioofGNItoGDP,2012 ............................................. 112
2.A2. GNIpercapita,2012,USD,currentprices,currentPPPs.................... 112
ThisSurveyispublishedontheresponsibilityoftheEconomicandDevelopmentReviewCommitteeof
theOECD,whichischargedwiththeexaminationoftheeconomicsituationofmembercountries.
The economic situation and policies of the Luxembourg were reviewed by the Committee on
9February2015.Thedraftreportwasthenrevisedinthelightofthediscussionsandgivenfinal
approvalastheagreedreportofthewholeCommitteeon26February2015.
TheSecretariat’sdraftreportwaspreparedfortheCommitteebyEckhardWurzelandJanStrasky,
under the supervision of PirittaSorsa. Statistical research assistance was provided by
DamienAzzopardi and GuillaumeBousquet with general administrative assistance provided by
AnthonyBolton and MikelInarritu. The Survey also benefitted from contributions at different
stagesbyArnaudDaymardandGiuseppeMaggio.
ThepreviousSurveyofLuxembourgwasissuedinDecember2012.
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6 OECDECONOMICSURVEYS:LUXEMBOURG©OECD2015
BASICSTATISTICSOFLUXEMBOURG,2013
(NumbersinparenthesesrefertotheOECDaverage)a
LAND,PEOPLEANDELECTORALCYCLE
Population(million) 0.5 Populationdensityperkm2 190.0 (34.7)
Under15(%) 17.3 (18.2) Lifeexpectancy(years,2012) 81.5 (80.2)
Over65(%) 15.1 (15.6) Men 79.1 (77.5)
Foreign-born(%,2010) 40.5 Women 83.8 (82.9)
Latest5-yearaveragegrowth(%) 0.1 (0.6) Latestgeneralelection October2013
ECONOMY
Grossdomesticproduct(GDP) Valueaddedshares(%)
Incurrentprices(billionUSD) 60.1 Primarysector 0.3 (2.5)
Incurrentprices(billionEUR) 45.3 Industryincludingconstruction 13.3 (26.8)
Latest5-yearaveragerealgrowth(%) 0.8 (0.8) Services 86.4 (70.5)
Percapita(000USDPPP) 91.0 (39.2)
GENERALGOVERNMENT
PercentofGDP
Expenditure 43.8 (43.1) Grossfinancialdebt 29.7 (110.2)
Revenue 44.5 (38.3) Netfinancialdebt -48.9 (69.9)
EXTERNALACCOUNTS
Exchangerate(EURperUSD) 0.753 Mainexports(%oftotalmerchandiseexports)
PPPexchangerate(USA=1) 0.922 Machineryandtransportequipment 28.1
InpercentofGDP Commoditiesandtransactions,n.e.s. 20.4
Exportsofgoodsandservices 203.3 (53.4) Chemicalsandrelatedproducts,n.e.s. 13.3
Importsofgoodsandservices 168.2 (49.4) Mainimports(%oftotalmerchandiseimports)
Currentaccountbalance 4.9 (-0.1) Machineryandtransportequipment 30.9
Netinternationalinvestmentposition 213.8 Miscellaneousmanufacturedarticles 14.7
Mineralfuels,lubricantsandrelatedmaterials 13.4
LABOURMARKET,SKILLSANDINNOVATION
Employmentratefor15-64year-olds(%) 65.7 (65.2) Unemploymentrate,LabourForceSurvey(age15andover)(%) 5.8 (7.9)
Men 72.2 (73.1) Youth(age15-24,%) 15.8 (16.1)
Women 59.1 (57.4) Long-termunemployed(1yearandover,%) 1.8 (2.7)
Participationratefor15-64year-olds(%) 69.9 (71.1) Tertiaryeducationalattainment25-64year-olds(%,2012) 39.1 (32.2)
Averagehoursworkedperyear 1643 (1771) GrossdomesticexpenditureonR&D(%ofGDP,2013) 1.2 (2.4)
ENVIRONMENT
Totalprimaryenergysupplypercapita(toe) 8.1 (4.2) CO2emissionsfromfuelcombustionpercapita(tonnes,2012) 19.2 (9.7)
Renewables(%) 3.7 (8.8) Waterabstractionspercapita(1000m3,2009) 0.1
Fineparticulatematterconcentration(urban,PM10,µg/m3,2011) 16.8 (28.0) Municipalwastepercapita(tonnes,2011) 0.7 (0.5)
SOCIETY
Incomeinequality(Ginicoefficient,2011)b 0.276 (0.308) Educationoutcomes(PISAscore,2012)
Relativepovertyrate(%,2011)b 8.1 (11.1) Reading 488 (497)
Medianequivalisedhouseholdincome(000USDPPP,2010) 36.4 (20.4) Mathematics 490 (494)
Publicandprivatespending(%ofGDP) Science 491 (501)
Healthcare(2012) 7.1 (9.2) Shareofwomeninparliament(%,December2014) 28.3 (26.7)
Pensions(2011) 7.7 (8.7) Netofficialdevelopmentassistance(%ofGNI) 1.00 (0.40)
Education(primary,secondary,post-sec.nontertiary,2011) 3.4 (3.9)
Betterlifeindex:www.oecdbetterlifeindex.org
a) WheretheOECDaggregateisnotprovidedinthesourcedatabase,asimpleOECDaverageoflatestavailabledataiscalculatedwhere
dataexistforatleast29membercountries.
b) 2010fortheOECDaverage.
Source: Calculationsbasedondataextractedfromthedatabasesofthefollowingorganisations:OECD,InternationalEnergyAgency,
WorldBank,InternationalMonetaryFundandInter-ParliamentaryUnion.
ABBREVIATIONSANDACRONYMS
Abbreviations and acronyms
ADEM Localofficesoftheemploymentservice
ALMP Activelabourmarketpolicies
BCL Luxembourgcentralbank
BEPS Baseerosionandprofitshifting
CAA Theinsuranceregulator
CEDIES Financialaidsystemforstudents
CFL SociétéNationaledesCheminsdeFerLuxembourgeois
CRD Capitalrequirementsdirective
CRP Publicresearchcentres
CRR Capitalrequirementsregulation
CSSF Luxembourgfinancialmarketregulator
EBA EuropeanBankingAuthority
ECB Europeancentralbank
EOI ExchangeofInformation
EPC Provisionsforcollectivedismissals
EPL Employmentprotectionlegislation
EU EuropeanUnion
FISIM Financialintermediationservicesindirectlymeasured
GDP Grossdomesticproduct
GHG Greenhousegas
GNI Grossnationalincome
GVC Globalvalueaddedchains
ICT Informationandcommunicationstechnology
IT Informationtechnology
KBC Knowledge-basedcapital
LCSB LuxembourgCentreforSystemsBiomedicine
LFS Labourforcesurvey
LTV Loan-to-value
MFI Monetaryandfinancialinstitute
MTO MediumTermObjective
PES Publicemploymentservice
PMR Productmarketregulation
R&D Researchanddevelopment
SME Smallandmediumenterprises
SMOT SchémadeMobilitéTransfrontalièreLuxembourg-Lorraine
SNCI NationalCreditandInvestmentCompany
SRM SingleResolutionMechanism
8 OECDECONOMICSURVEYS:LUXEMBOURG©OECD2015