Aged 45, Pierre Gramegna has a degree in law and in economic sciences (Paris II University), and has been ambassador for the Grand Duchy in Japan and in South Korea and Consul General in San Francisco. Before heading the CCL, he was director of the International Economic Relations department at the Luxembourg Ministry of Foreign Affairs.
Commerce International: What are the missions of this elected professional Chamber, in a State with 452,000 inhabitants that remains one of the most prosperous nations in the world?
Pierre Gramegna: “It is true that the Chamber of Commerce has a long tradition in the Grand Duchy of Luxembourg as it was founded on 1st October 1841 following the publication of a decree by the Grand Duke William II. Whereas to begin with the Chamber of Commerce was simply a body that defended the interests of the shopkeepers and industrialists of the time, over the years its role in the economy of Luxembourg became so important that the authorities thought it necessary to confirm the Chamber’s status in a law dated 4 April 1924. This law set up professional chambers in Luxembourg, run on an elective basis, and gave civil personality to the Chamber of Commerce.
Today, the Chamber groups all Luxembourg companies except those in agriculture and the craft industry. All companies established in Luxembourg are obliged to join the Chamber of Commerce. The main guidelines of the CCL’s actions are decided by its plenary assembly, which has 23 elected members representing 8 business sectors. As our members’ subscription fees are our main source of financing, the Chamber of Commerce has the privilege of being financially independent, thus enabling it to work in a truly free and objective manner. At present, we defend the interests of 35,000 affiliated members, who employ over 200,000 people and represent 80% of GDP. Our primary mission is to express and to represent the general economic interest. On this point, the Chamber of Commerce promotes an open, dynamic and competitive economy, to enable companies to develop their business in Luxembourg and abroad. We also encourage foreign investments. The Chamber of Commerce is also the appointed independent spokesman for the market and its different players.
Our mission to promote business interests also often consists in the Chamber of Commerce taking part in the legislative process. In fact, the government is obliged to seek the opinion of the Chamber of Commerce for any draft bills or rules in the Grand Duchy that concern the business sectors represented by the Chamber. Also, and this is a distinctive characteristic of Luxembourg, the Chamber of Commerce has the right to submit private bills to the government which is obliged to transmit them to the Chamber of Deputies. Although the Chamber of Commerce only uses this right in exceptional circumstances, it did so again recently when it submitted a private bill to the government on the introduction of a ceiling on the rates of employers’ health insurance contributions. Finally, the Chamber of Commerce positions itself today above all as a service provider for its citizens and for anyone else interested in carrying out commercial, financial or industrial activities in Luxembourg."
C.I.: What are the challenges for the Luxembourg economy?
P.G.: “The challenges for the Luxembourg economy are clear. Luxembourg is a small country whose economy is very open to the outside world. Companies in Luxembourg use foreign labour, the markets for companies in Luxembourg are often world-scale and foreign investments make a major contribution to the dynamism of our economy. If they are to remain competitive on the international scene, it is vital that companies should benefit from an extremely favourable economic environment in our country.
It is true that the economic environment is particularly favourable to companies. Economic growth reached 4.5% in 2005. Our country has remarkable political stability. Social conflicts are very rare and social dialogue is very strong. The Luxembourg government is also very accessible and works very effectively to maintain Luxembourg’s competitive advantages. On the social front, negotiation is the rule, and this helps prevent social conflicts. The tripartite consultation system helps find compromise solutions that are acceptable for the unions and employers and for the government.
However, it is also vital not to take things for granted. In the past few years, Luxembourg has suffered from an increase in unemployment, deterioration in its public finances and certain inflationary tensions. In absolute terms, unemployment is still far lower than the European average, as it only amounts to 5% in Luxembourg. The public finances also respect the Maastricht criteria. But it is important to deal with problems as soon as they start to arise. It is the Chamber of Commerce’s role to alert the government when the situation begins to deteriorate and to propose effective measures before it is too late. What is at stake goes far beyond companies’ individual or sectoral concerns. The Chamber of Commerce is also required to help protect the general economic interest. In the end, what is at the heart of the debate is not only the competitiveness of the Luxembourg economy, but by protecting this competitiveness, it is the question of protecting the standard of living and social well-being of the population that is really the focus of our concerns.”
C.I.: In 2004, the CCL created a training establishment, the IFCC. What was the reasoning behind this?
P.G.: “Before the inception of the IFCC, the Chamber of Commerce’s training offer was managed by its Training Department. Since the Chamber of Commerce was having to sell its training program on an increasingly competitive market, it seemed only logical to give the Training Department a strong visual and corporate identity. The creation of the IFCC should therefore allow the Chamber of Commerce to position itself clearly on Luxembourg’s vocational and continuing education market.
But the IFCC was intended as far more than a simple “brand” that would make our situation in the market easier. It was opened several months before the official inauguration of the Chamber of Commerce’s new building with its Conference and Training Centres, a site comprising 40 rooms and occupying an area of more than 6,500 m_ that offers first-rate facilities for all types of conferences and training programs. The IFCC marked the beginning of a new era in the Chamber of Commerce’s services offer. With the IFCC, the Chamber of Commerce is also contributing to the “lifelong learning” culture.
The IFCC’s current objective is to contribute, through its training offer, to improving the performance of companies and the men and women who work in them. In the space of just two or three years, the IFCC has become one of Luxembourg’s leading continuing education players. Its offer is remarkable in its diversity and for its extremely competitive prices. Last year, almost 6,000 people were trained by us and we work in close collaboration with companies to offer them customised training programs.”
C.I.: Luxembourg is resolutely outward-looking. How is this international outlook reflected within the CCL?
P.G.: “The Grand Duchy of Luxembourg has always been outward-looking, and was so before globalisation was even talked of. It is clear that with a surface area of 2,486 km_ and a population of only 460,000 inhabitants, 39% of whom are foreigners, Luxembourg could not shut itself off from the outside world without running the risk of suffocating. Its central position in Europe between France, Belgium and Germany means Luxembourg has all the advantages it needs to become an international trade hub.
Companies who wish to develop have no choice but to open up to international markets since the domestic market remains, by definition, limited. This instinctive opening up to neighbouring markets has certainly helped entrepreneurs in Luxembourg to assimilate globalisation rather more easily than some of their European counterparts. The international department of the Chamber of Commerce has, moreover, always supported Luxembourg companies in their conquest of new markets by organising promotional economic tours, business opportunity days, cooperation trade fairs, visits that include international trade fairs and the setting up of joint stands at major foreign trade fairs. Similarly, to promote the Grand Duchy in international trade circles, the International Department also regularly welcomes foreign delegations when they visit Luxembourg. For many years now, the Chamber of Commerce has been helping companies through the maze of export formalities.”
C.I.: How is Europe perceived in Luxembourg?
P.G.: “This precise question was put to the electorate on 10th July 2005, since the government of Luxembourg had decided to submit the future European Constitution for ratification by national referendum. The people of Luxembourg voted by a clear majority in favour of the European Constitution in a climate, which after the “No” pronounced by the Netherlands and France was largely unfavourable to the Constitution. This shows that Luxembourg has not forgotten its European vocation. Luxembourg has always been one of the most fervent partisans of European construction. In 1950, it was amongst the 6 founder members of the European Coal and Steel Community inspired by Jean Monnet and created on the initiative of Robert Schuman. Successive Luxembourg governments realised very early on the need for European construction to guarantee peace in Europe after the upheavals of the first half of the 20th century and this is why Luxembourg has always been involved in the pursuit of the European ideal.
This ideal is, moreover, more important now than ever before and it should be remembered that European construction is a success story as yet unequalled in the history of the western world. I think that the recent expansion of Europe also represents a major opportunity for businesses. The new European countries are the export markets that have developed the best for Luxembourg in recent years. Our exports to the Czech Republic, Poland and Hungary have, in some cases, multiplied by ten. We now export more to the Czech Republic than to China! So incredible opportunities for trade exist. The potential is greater than elsewhere because these countries have a lot of catching up to do. It has often been said that European expansion was a political necessity and an economic opportunity that must be seized. But entrepreneurs did not wait for the end of the expansion negotiations and the entry of these countries into the Union to seize these opportunities.
Today, it is important for Europe to catch its breath and agree on a project for the future since its most recent project, the Constitution Treaty, is not likely to come into force in the next two or three years and we should be asking ourselves in what areas and by what means, Europe can progress from now until the coming into force of the Treaty or another Treaty capable of extricating Europe from the blind alley in which it currently seems to be imprisoned.”
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