LUXEMBOURG: DISGRUNTLED WORKERS DISRUPT PARLIAMENT

UNCLAS LUXEMBOURG 000304

SIPDIS

E.O. 12958: N/A
TAGS: ECON ELAB ENRG PGOV SOCI LU
SUBJECT: LUXEMBOURG: DISGRUNTLED WORKERS DISRUPT PARLIAMENT


1. SUMMARY Disgruntled laborers in Luxembourg's gas and
electricity sector deliberately sabotaged the city's power
sources on October 14-15, disrupting a session of
Luxembourg's Chamber of Deputies (National Parliament). The
employees responsible appear to have been acting in response
to legislation passed on 14 October liberalizing the gas and
electricity markets in Luxembourg. The response of the
workers, while not terribly disruptive to the city's and
parliament's operations, is indicative of the difficulty the
newly-formed Luxembourg government may encounter in attempts
to implement significant reform in labor sectors. END SUMMARY


2. Frustrated employees in Luxembourg's gas and electricity
sectors deliberately caused two significant power failures in
the capital city on October 14-15. The first failure
affected Luxembourg's Chamber of Deputies, interrupting
parliamentary debate and an address by the nation's Health
Minister, while the second sabotage affected various sectors
of the city's power grid. The workers appear to be reacting
to legislation passed on October 14. The legislation,
adopting an EU directive into national law, comes nearly two
years after the EU first passed the directive calling for the
liberalization of the gas and electricity sectors.
Parliament was initially scheduled to review the legislation
earlier this year, but the government feared demonstrations
prior to the June national elections.


3. In the end, the government's fears proved prophetic.
Approximately 160 workers heeded trade unions' calls for a
strike on October 14, demonstrating in front of Parliament
and causing a few last-minute changes to the agenda of Irish
President Mary McAleese's State Visit. (NOTE: The Chamber
of Deputies meeting hall is adjacent to the Grand Ducal
Palace. END NOTE) A few workers, however, took the
additional steps of causing power failures within the city's
power grid.


4. Luxembourg's electricity and gas workers are civil
servants. The legislation passed on October 14 privatizes
the two sectors, but allows the workers to keep their status
and benefits as employees of the state - thus, ensuring job
security and competitive earnings. New employees, however,
would not be considered civil servants. The Grand Duchy's
Civil Service represents a majority of Luxembourg
citizen-workers and is often seen as a badge of honor and
considered the hallmark of a family's standing in Luxembourg.
The workers were likely reacting more to perceived loss of
status than in actual quality of life. The workers and
unions also fear the legislation may establish a precedent
that will lead to similar legislation affecting other labor
sectors in the future.


5. Luxembourg's mayor, Paul Helminger, argued that the new
legislation does not drastically alter the status quo.
Although privatized, the GoL remains the largest shareholder
in the city's new private energy provider, holding
approximately 60% of the shares. Helminger added that the
majority state ownership equates to total public control over
the city's energy supply, and since workers are able to
maintain their status and benefits as civil servants, the
European Union directive can be satisfied, workers remain
happy, and the state continues to guarantee provision of gas
and electricity to its citizens.


6. COMMENT: The reaction is symbolic of difficulties the
government may encounter in any sweeping reform the GoL may
seek to undertake regarding the nation's civil servants. The
minor disruptions to the city's power flow do not bode well
for new Labor Minister Nicolas Schmit, having recently taken
the helm of one of the most scrutinized Ministries in
Luxembourg. Future efforts to reform the civil sector in
Luxembourg may be met with even greater unrest


7. Post point of contact is (acting) POL/Econ Chief Adam
Center, e-mail: CenterAM@state.gov.

BIEDLINGMAIER