The rising cost of living in Luxembourg, particularly in the housing sector, is posing major challenges for the recruitment of staff at the European institutions.
Working for the European Commission, Parliament, or Court of Justice is no longer the dream opportunity it once was for Luxembourg nationals, residents, and even foreign candidates. The once-favourable equation – good pay, economic stability, and social benefits – has been eroded by soaring living and housing costs. The situation has become so acute that the institutions are now struggling to fill vacancies in the Grand Duchy.
“We need a correction coefficient specific to Luxembourg.”
Tilly Metz, MEP from Luxembourg
While the problem is not new, it has only recently been acknowledged by the institutions. Last summer, the European Parliament adopted a housing allowance intended for civil servants working in Luxembourg. However, as Anne Calteux, the European Commission’s representative in Luxembourg, explained in an interview, the measure is a “social measure” and is not available to everyone.
The allowance is aimed exclusively at lower salaries and “can range from €300 to €500 per month”, according to Luxembourg MEP Tilly Metz. While it provides invaluable support to some officials, it does not address the fundamental issue: the ever-increasing cost of living in Luxembourg.
According to the latest reports, living costs in the Grand Duchy are 25% higher than in Brussels. “Suffice it to say that the calculation is quickly made” for officials considering a posting, Metz noted.
“Housing is the key factor in explaining this difference in purchasing power between cities like Luxembourg City and Brussels, for example.”
Anne Calteux, representative of the European Commission in Luxembourg
In her view, the institutions would have been better off tackling the root of the problem – namely, the level of remuneration for European officials in Luxembourg, which she argues does not align with the cost of living in the Grand Duchy.
Although Metz strongly welcomes the housing allowance, describing it as “a recognition of the problem”, she adds that it is not enough to restore Luxembourg’s attractiveness.
Shortage of candidates extends beyond entry-level posts
The difficulties are not confined to lower-salaried positions. The institutions are also struggling to find candidates for better-paid roles, as “executives” similarly weigh the financial implications of a posting to Luxembourg – and often opt for Brussels. “We need a specific correction coefficient for Luxembourg”, Metz stressed, calling the current absence of such a measure an “injustice”.
However, this solution is not universally supported. Trade unions fear that reopening the debate on remuneration in Luxembourg could trigger broader negotiations around the salaries of European officials.
Indeed, the last time such discussions took place – in 2004 and 2014 – entry-level salaries and pensions were reduced as part of budget cuts.
People avoid Luxembourg like the plague, the cost of living there is too high.
Anonymous source working at the European institutions
In the meantime, Luxembourg’s appeal appears to have taken a serious hit. The Grand Duchy has reportedly become the “unloved” destination among European officials.
According to sources abroad, officials in France and Belgium are said to avoid postings to Luxembourg “like the plague”. Given the cost of living and the housing challenges that await them, their reluctance is hardly surprising.
