Is the index irreplaceable?

By Camille FratiLex KlerenGilles KayserAnouk Flesch Switch to French for original article

The automatic wage indexation mechanism has survived the worst inflationary crisis for 40 years. Criticism and calls to restrict it have never been stronger. Yet no serious alternative is proposed.

Postponed, modulated, manipulated, criticised but maintained: this is how the inflationary crisis for the automatic salary indexation mechanism – the index, for those who are intimate with it as well as for its most bitter critics – is summed up. It is somewhat of a snake in the Grand Duchy's web of social dialogue. In times of low or moderate inflation – 2 per cent being the ceiling monitored by the European Central Bank throughout the eurozone – the slices fall at distant intervals, and it would be incongruous to storm against the indexation. Only the former Fedil president, Robert Dennewald, ventured this in the 2010s.

But an acceleration of inflation is enough to bring back the recriminations of the companies, while the employees defend tooth and nail this precious social asset. As the law provides, the social partners meet in tripartite when a crisis affects the country. And this almost systematically leads to what the government modestly calls a 'modulation' of the index – either a postponement of a bracket, as it was the case in 1984, or the imposition of a minimum period between two brackets, as in 2014.

You want more? Get access now.

  • One-year subscription

  • Monthly subscription

  • Zukunftsabo for subscribers under the age of 26


Already have an account?

Log in