Two-Tier

Jeannot Waringo turned 74 on Saturday. The former director of the Finance Ministry's Inspectorate of Finance, former president of CFL, and the man who wrote the report that reorganised the Grand Ducal Court, sat down with RTL for a long interview. He covered the state budget, the index, the railways, the monarchy, and the Grünewald forest. The most striking warning was about a country dividing in two.[1]

10,000 extra civil servants

In the space of ten years, approximately 10,000 additional civil servants have been added to the state payroll. This has put real strain on the budget. Meanwhile, private employers cannot match the starting salaries offered in the public sector. The result, according to Waringo, is a "two-tier society" opening up between civil servants and workers in the private sector. He called it a worrying trend.[1]

The numbers are not new. They have been visible in successive budget documents. What is new is hearing them framed so bluntly by someone with Waringo's institutional authority. He is not a politician making a talking point. He is a retired senior civil servant who spent four decades inside the system, describing what he saw.

The index as sacred cow

Waringo's proposal is to cap the index above a certain salary threshold. In theory, every salary, however high, is adjusted in line with inflation. Waringo argues that above a certain level, workers can reasonably do without the automatic bump. He described it as a gesture of solidarity.[1]

The index is one of Luxembourg's sacred cows. Every politician knows it. Every government has avoided touching it. The last time the index was suspended was in 2012 under the Juncker-Asselborn government, and the political cost was significant. Waringo is not proposing suspension. He is proposing a cap: the index continues to protect low and middle incomes, but stops automatically boosting high incomes. It is a targeted reform, not an abolition.[1]

Whether any government will pick up the idea is doubtful. But the fact that someone of Waringo's stature is publicly calling for the conversation is itself a shift. The taboo is not what it was.

The deficit that won't come down

The state deficit worries Waringo. He praised the current CSV-DP coalition for handling cyclical crises and the economic fallout of wars reasonably well. But he said it is time to face up urgently to the country's structural problems: the climate crisis, an ageing population, housing, and the risk of poverty. It is also time, he said, to bring public finances back into balance.[1]

This connects to the IMF debt projections reported earlier this week. Luxembourg is on track to breach the Maastricht debt criterion. The deficit is not shrinking. The structural challenges are growing. Waringo's assessment is not a departure from the consensus. It is a confirmation, from someone who has seen the books.

Performance over seniority

Waringo also argued for an evaluation-based pay system within the state. Instead of high starting salaries, pay could be improved through performance-linked bonuses. He pointed to CFL as a model where this approach works. The implication is that the public sector's wage structure is out of step with how most of the economy works, and that reforming it would address both the budget strain and the two-tier divide.[1]

The rest of the interview

On the monarchy, Waringo finds the Maison du Grand-Duc works well as an administration. He is a monarchist and believes the monarchy gives the country stability. But he finds it a pity that Grand Duke Guillaume is asking for an early return of the Grünewald forest, 850 hectares currently managed by the state under a convention running until 2034. He would have expected more tact from the Grand Duke and his advisers. He also noted, with a touch of personal disappointment, that he was never thanked by the Grand Ducal family for the report that helped modernise the monarchy.[1]

On the railways, Waringo, who spent over four decades helping steer Luxembourg's railway strategy, no longer believes a direct train line between Luxembourg and Brussels will ever materialise. The chance to build a fast route along the Saar motorway has slipped through the country's fingers.[1]

It is a candid interview from a man who has nothing left to lose by being honest. That is what makes it worth reading.