European Commission and REFOR 3 June 2026, Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Luxembourg

Also known as

The European Commission, acting under Articles 121(2) and 148(4) TFEU and Regulation (EU) 2024/1263, recommends that the Council issue country-specific recommendations to Luxembourg for 2026–2027 addressing fiscal consolidation (including compliance with net expenditure ceilings following a material deviation in 2025), pension sustainability, housing supply and macroprudential risks, aggressive tax planning, innovation and competitiveness, energy transition and environmental resilience, and education and labour market reform. The recommendations are grounded in the European Semester framework, the Recovery and Resilience Facility, and the Council's endorsement of Luxembourg's medium-term fiscal-structural plan of 21 January 2025, which set maximum net expenditure growth rates through 2029. Key structural concerns include the projected depletion of the Pillar I pension reserve by 2048, Luxembourg's status as the EU's most expensive housing market, declining total factor productivity, and persistent educational performance gaps linked to linguistic diversity and socio-economic background.AI