Yuriko Backes

Luxembourg is hoping its long, friendly relationship with China can help keep the superpower on a path towards more investment-friendliness instead of sable-rattling with the US. Levels of investment in China by Luxembourg-domiciled investment funds dipped during that country’s difficult Covid times. Some institutional investors are staying away due to darkening US-China relations. Hopes for a resurgence depend on peace.

Luxembourg’s Ministry of Finance has chosen asset management firm Schroders and its impact investment unit BlueOrchard as industry partners for a new climate action partnership. Schroders will serve as the management company for the finance ministry.

BlueOrchard has been appointed as the investment manager for this climate impact strategy, the firm said in a 16 June press release announcing that it had won an international tender process.

Assets worth over 200 million euros stored at Luxembourg’s freeport, formally known as  High-Security Hub, have been frozen as part of the EU sanctions against Russia, Luxembourg finance minister Yuriko Backes has told parliament. This follows the 4.3 billion euros in frozen Russian-linked assets that were announced by the ministry of finance last week.

Luxembourg has frozen some 4.3 billion euro in Russian assets, mostly held in shares, bonds and bank accounts, as part of the international sanctions against Russia, the finance ministry said.

The Luxembourg Business Register, at the request of the finance ministry, so far has identified more than 90 persons and 1,100 legal entities registered in the Trade and Companies Register (RCS) for which there are details of persons included in the sanctions lists. 

Luxembourg Finance Minister Yuriko Backes is visiting London this week, at a time when advocates of maintaining strong UK-EU financial services relationships are struggling to have their voices heard. The Luxembourg government has sought to take the heat out of Brexit arguments since the 2016 leave vote, and this visit is the latest such effort. 

After two rounds of voting three candidates remained in the race on Monday night for the position of director-general of the European Stability Mechanism. Luxembourg’s candidate Pierre Gramegna, a former finance minister, will have to win the support from southern European countries if he is to succeed Klaus Regling in October. A decision now is expected at the 16 June Eurogroup meeting in the Grand Duchy.

Accompanying Luxembourg’s finance minister Yuriko Backes on her official visit to Stockholm, Luxembourg’s financial community this week sought to strengthen its financial ties with Sweden, considered a “natural partner” for the Grand Duchy. Backes also discussed plans to support the reconstruction of Ukraine with her Swedish counterpart.

Travelling back to Luxembourg, Backes said on Twitter that her visit had been “very productive.” Backes was accompanied by a Luxembourg for Finance delegation and several representatives of Luxembourg’s financial services sector.

Luxembourg loves the new new thing, especially when it comes to financial legislation. The big question is: what should be next? The Grand Duchy may have found the answer already.

In the late 1980s, the Grand Duchy successfully tapped into global investment fund markets by becoming the first EU member state to offer Ucits-passports to international investment funds. Today, three decades later, more than a quarter of Europe’s fund assets has its home here. The country has even become a leading global funds hub.

Luxembourg has frozen some 2.5 billion euro in Russian assets, mostly held in shares, bonds and bank accounts, as part of the international sanctions against Russia, its finance minister told a parliamentary committee on Tuesday.

The frozen funds relate to sanctions that have been imposed since Russia’s invasion of Ukraine on 24 February and do not consider sanctions that existed beforehand, the minister said. 

Luxembourg’s financial system has weathered the pandemic well, but the Russia-Ukraine conflict poses new risks to Luxembourg’s economy while the surge in housing prices from recent years threatens the attractiveness of the Grand Duchy, the International Monetary Fund (IMF) has concluded after a two-week mission.