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Luxembourg - Monitoring report

Date of the monitoring visit: remote monitoring meetings from 6 to 7 October 2021
Report adopted on: 23 March 2022
Files : Report CPL(2022)42-03 | Recommendation 470 (2022)
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This is the third monitoring report on Luxembourg since the country ratified the Charter in 1987. It follows the remote monitoring meetings carried out from 6 to 7 October 2021. The report welcomes the fact that the principle of local self-government, as laid down in the European Charter of Local Self-Government, is fully enshrined in the Constitution, recognised by the legislature and the courts and respected. It also highlights that the legal protection of local self-government is fully complied and that the Communal Law reform begun in 2020 is aimed inter alia at relaxing the administrative supervision of communes. 

 

The rapporteurs however express concern, inter alia, the delimitation of powers between the State and the communes remains unclear, and that the prior approval of the Minister of the Interior remains the rule in a certain number of cases, particularly with regard to staff recruitment, the creation of posts, the appointment of local government officers and also communal budgets, there are still forms of administrative supervision in place that do not comply with the Charter. The latter had already been pointed out in the previous monitoring report. It also stresses the fact that the procedure for consulting local authorities on all matters concerning them directly, including with respect to their budgets, is not formally recognised in law. 

 

Therefore, they call national authorities of Luxembourg to clearly delimit the powers of the State and the communes and to press ahead with the communal reform, not least in order to limit as far as possible the forms of administrative supervision of activities and persons which remain in place at local authority level. National authorities are also called to formally enshrine in law the procedure for government consultation of local authorities. Lastly Luxembourg authorities are encouraged to sign and ratify the Additional Protocol to the European Charter of Local Self-Government on the right to participate in the affairs of a local authority (CETS No. 207). 

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Article ratified Ratified with reservation Non ratified
Compliance Partial compliance Non compliance To be determined
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Article 2
Constitutional and legal foundation for local self government - Article ratified

The principle of local self government shall be recognised in domestic legislation, and where practicable in the constitution.

The principle of local self-government is explicitly recognised in the Constitution and in legislation. It is referred to in Chapter IX of the Luxembourg Constitution entitled “Communes”, Article 107, paragraph 1, of which provides that “communes form autonomous authorities, organised on a territorial basis, possessing legal personality and managing their own assets and interests through their subordinate bodies”. The amended Communal Law of 13 December 1988 lays down detailed rules on the organisation of the communal system. The Council of State and the ordinary and administrative courts ensure compliance with the requirements of the European Charter of Local Self-Government. 

 

As recognised in the preamble to the Charter, the principle of local self-government has three constitutive elements: local authorities endowed with democratically constituted decision-making bodies, possessing a wide degree of autonomy with regard to their responsibilities and the ways and means by which those responsibilities are exercised, and the resources required for their fulfilment. Each of these elements is effectively enshrined in Luxembourg’s legislation and Constitution. 

 

Consequently, the recognition of local self-government by the Constitution and in domestic legislation is in compliance with Article 2 of the Charter. As the first country to ratify the European Charter of Local Self-Government, Luxembourg fulfils its obligation in this respect. 

Article 3.1
Concept of local self government - Article ratified

Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.

Article 107, paragraph 1, of the Constitution grants communes the right to manage their own assets and interests through their subordinate bodies. Today, the Communal Law gives full effect to this right, with a substantial share of public affairs being managed at local level. 

 

Local authorities in Luxembourg perform their duties “under their own responsibility” and “in the interests of the local population” in accordance with Article 3.1 of the Charter. Their role is not merely to serve higher authorities as elected representatives – they are entitled to set their own political priorities and develop strategies and public policies in the interests of the local population. Luxembourg’s communes do not usually have to answer to higher authorities for the decisions they take within the framework of the law, as decentralised authorities, but they are held politically accountable by local citizens who elect the leaders of the communes. Protecting communal interests is therefore one of the main tasks of local government. 

 

The co-rapporteurs therefore conclude that Article 3.1 of the European Charter of Local Self-Government is broadly applied, but encourage the authorities to press ahead with the reform of the system of administrative supervision with a view to giving local authorities greater autonomy in the management of municipal affairs.  

Article 3.2
Concept of local self government - Article ratified

This right shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them. This provision shall in no way affect recourse to assemblies of citizens, referendums or any other form of direct citizen participation where it is permitted by statute.

The second paragraph of Article 107 of the Constitution provides: “in each commune there shall be a communal council elected directly by the commune’s inhabitants; the conditions to vote or stand for election shall be regulated by law”. Communal councillors are therefore elected directly by the local electorate. 

 

Every commune in Luxembourg has a communal council from which the college of the mayor and aldermen is appointed. Voting is compulsory for everyone on the electoral roll but a system of postal voting, open to all voters, was introduced to prevent abstention. Luxembourg law provides for penalties for those who abstain or whose reasons for abstaining were unwarranted. In September 2021, the government announced its intention to allow foreigners to vote in the next local elections without any requirement as to length of residence in Luxembourg (currently 5 years). In addition, citizens frequently have more and more direct input in the decision-making process: local authorities are gradually developing direct citizen participation practices to ensure citizens are consulted throughout the political cycle and not just in the run-up to elections. 

 

The Ministry of the Interior is undoubtedly organising a broad participatory process for the Communal Law reform. There are also plans to clarify the existing provisions on communal referendums and advisory committees and even to introduce new forms of citizen participation like the local citizens’ initiative, which is modelled on the European citizens’ initiative. At the same time, the provisions on public information and communication are to be clarified too, giving local authorities more opportunities to involve citizens in the decisions most directly affecting them. 

 

In the co-rapporteurs’ view, the Luxembourg constitutional and legislative provisions do therefore provide for the development and implementation of local self-government in accordance with Article 3.2 of the Charter. 

Article 4.1
Scope of local self government - Article ratified

The basic powers and responsibilities of local authorities shall be prescribed by the constitution or by statute. However, this provision shall not prevent the attribution to local authorities of powers and responsibilities for specific purposes in accordance with the law.

Under Article 107 of the Constitution and Article 28 of the Communal Law, the communes regulate all matters of communal interest. 

 

The Constitution itself directly assigns certain tasks to the communes, including the management of their territory and their assets, regulatory powers and the right to establish communal taxes (Article 107), civil status (Article 108) and the organisation of primary education (Articles 23 and 107). This last function is expected to be abolished, however, as part of the constitutional review (despite opposition from SYVICOL).

 

As pointed out in Resolution 460 (2020) adopted by the Statutory Forum of the Congress of Local and Regional Authorities of the Council of Europe on 7 December 2020, providing a contemporary commentary by the Congress on the explanatory report to the European Charter of Local Self-Government, “in several cases, the competence of local authorities is defined in national legislation mainly as a responsibility for ‘local’, ‘home’, or ‘own’ affairs. These are, however, vague and flexible concepts that are difficult to interpret and depend on different national traditions. The actual content of certain local functions and the procedures and instruments involved may differ considerably from one country to another, as can the understanding of their relative importance”. Luxembourg is a perfect example of this. 

 

Article 4.1 of the European Charter of Local Self-Government is being observed by Luxembourg, therefore. 

Article 4.2
Scope of local self government - Article ratified

Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority.

Under Article 28 of the Communal Law, “[t]he communal council shall regulate all matters of communal interest; it shall deliberate or give its opinion whenever its deliberation or opinion is required by the laws or regulations or called for by the higher authorities”. 

 

The communal council’s actions vary according to whether it is working in the purely communal sphere or on matters which have been delegated to it by the higher authorities. In the former case, it takes decisions, in the latter it merely gives opinions. Sometimes there are shared powers, as in the case of communal spatial planning, where it can take regulatory decisions.

 

The co-rapporteurs are therefore of the opinion that Luxembourg’s legislation is in compliance with Article 4.2 of the Charter. 

Article 4.3
Scope of local self government - Article ratified

Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy.

Over time various laws have consolidated the original tasks of the communes, assigned new mandatory tasks to local government or shared powers between the state and the communes. Currently the communes’ most important tasks are communal spatial planning and urban development, regulatory powers and policing, water management, various types of waste management, communal roads and traffic regulations, various activities related to environmental protection, the organisation of elementary education, civil status, social assistance and burials. 

 

Alongside their mandatory duties, communes may also perform optional tasks insofar as their financial circumstances allow. Communes’ optional tasks are services that they have freely decided to make available to their inhabitants without being compelled to do so by legislation. These are services which are useful or congenial to the population but not indispensable. Communes’ optional tasks therefore fall within the designated framework of communal interests. Optional tasks currently being performed by communes include child development and childcare services, sport, tourist facilities, housing, museums and cultural centres. 

 

Consequently, the rapporteurs consider that Article 4.3 of the European Charter of Local Self-Government is correctly complied with in this respect. 

Article 4.4
Scope of local self government - Article ratified

Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law.

During their meetings, the co-rapporteurs noted that there were still some problems with regard to the distribution of powers between the state and the communes. 

 

For communal tasks to be clearly delimited, they need to be set out in clear and coherent legislation and grouped into a communal code that is more than merely a compilation of existing laws and regulations. Local stakeholders are also calling for some optional tasks to be converted into tasks which are de facto mandatory, with central government allocating the requisite financial resources. 

 

In this respect, SYVICOL had already pointed in 2005 and in 2015 to the need to review the powers of the communes and make a sharper distinction between national and communal powers so as to create a framework within which communal self-government could be exercised and develop fully. SYVICOL thus has high hopes for the Communal Law reform begun in 2020 but not yet completed. 

 

While acknowledging the progress made since the last visit, the co-rapporteurs therefore conclude that Luxembourg’s legislation still only partially complies with Article 4.4 of the Charter. 

Article 4.5
Scope of local self government - Article ratified

Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.

 

In some cases, central government powers are delegated to communes. Although such cases are relatively rare and mainly concern issues relating to the management of water, waste and social assistance, local authorities are always granted discretion in adapting their exercise to local conditions. SYVICOL has rightly pointed out that the state retains considerable influence in certain areas which are in principle the responsibility of the communes (spatial planning, water management, waste, etc.). 

 

According to Recommendation CM/Rec(2007) of the Committee of Ministers to member States on local and regional public services, adopted on 31 January 2007, the proximity to the population of local and regional public services is a fundamental necessity, and local and regional authorities have a vital role to play in the provision of these services. In order to ensure that services are adapted to citizens’ needs and expectations, local entities and their agencies should benefit from a high degree of decentralisation and a capacity for independent action in the provision of these services. This is the case in Luxembourg for a number of local public services. 

 

The co-rapporteurs are of the opinion that Article 4.5 of the European Charter of Local Self-Government is generally respected by Luxembourg. 

Article 4.6
Scope of local self government - Article ratified

Local authorities shall be consulted, insofar as possible, in due time and in an appropriate way in the planning and decision-making processes for all matters which concern them directly.

 

As to compliance with the principle that local authorities must be consulted on all matters concerning them directly, the co-rapporteurs noted that progress had been made in this regard, a development that was also applauded by SYVICOL during the meetings held. In practice, since a circular to this effect was issued by the Prime Minister on 21 June 2019 to all members of the government, the latter have been consulting SYVICOL on draft laws or regulations concerning the municipalities on a much more regular basis than before. As a rule, this consultation takes place in the same way as for the professional bodies, as soon as the draft has been adopted by the government in cabinet. In some cases, exchanges between SYVICOL and the competent ministry take place on the basis of the preliminary draft. Such consultation is still not systematic, however, and there have been instances where no consultation occurred in matters that had obvious implications for the communes. SYVICOL is not consulted about draft European legislation. 

 

The assessment of the administrative and financial impact of the new legislative provisions on the communes could be improved, however. Any draft law providing for the assignment of new powers and responsibilities to communes should systematically specify the financial resources that will be allocated to the communes to enable them to perform their new tasks. This is a point that is made regularly by SYVICOL. During the consultation procedure, the Ministry of the Interior pointed out that under the amendments to the Constitution which will be voted on at first reading by the Chamber of Deputies in January 2022, it will be stipulated in Article 105 (3) that communes are entitled to financial resources to enable them to perform the tasks assigned to them by law. 

 

The co-rapporteurs take the view that, in practice, Article 4.6 of the Charter is now complied with to a greater extent than it was at the time of the last visit and the adoption of the last Recommendation in 2015 but that the consultation procedure does nevertheless need to be enshrined in law: such formal recognition remains necessary, therefore, in order to bring the situation fully into line with Article 4.6 of the Charter. 

 

The co-rapporteurs therefore conclude that the situation in Luxembourg only partially complies with Article 4.6 of the Charter. 

Article 5
Protection of local authority boundaries - Article ratified

Changes in local authority boundaries shall not be made without prior consultation of the local communities concerned, possibly by means of a referendum where this is permitted by statute.

 

The issue of the reorganisation of local government in Luxembourg was not directly addressed during this round of talks but had been during the previous visit in 2015 in the context of the reform for the merger of communes (2011-2017) in the light of Article 5 of the Charter. SYVICOL has always insisted that mergers should be voluntary, and that has been the policy pursued by the government in office since late 2013. 

 

The aim of amalgamating communes in Luxembourg was to establish more robust entities so that they can demand more autonomy and act as a true counterweight to central government. 

 

Under Article 2 of the Constitution, “the boundaries and capitals of judicial or administrative districts may be changed only in accordance with a law.” The distinct advantage of this provision is that each merger can be practically tailor-made under a special law taking account of the specific characteristics of the communes merging. Neither the Constitution nor the law expressly requires a referendum to be held prior to a merger of communes. The possibility of holding a referendum at communal level does, however, exist in Luxembourg and derives from Article 35 of the amended Communal Law of 13 December 1988, but such referendums are only consultative. 

 

Although, under domestic law, holding a referendum in the event of a merger of communes is merely a possibility, this form of consultation has always been used without exception, with reference among other things to Article 5 of the Charter. All mergers have been preceded by a referendum and political decision-makers have always considered themselves bound by the outcome of referendums. 

 

While in most countries local government legislation clearly defines the consultation forms and procedures with regard to proposals for boundary changes, including the official consent of the communal council, as well as a requirement to consult with local communities, Luxembourg had not wished to make this procedure compulsory. Although the Charter clearly prefers local referendums, in which all local residents may express their views on the proposed changes or mergers, it does not require them (contrary to what SYVICOL claims), as noted in Resolution 460 (2020) adopted by the Statutory Forum of the Congress of Local and Regional Authorities of the Council of Europe on 7 December 2020, providing a contemporary commentary by the Congress on the explanatory report to the European Charter of Local Self-Government. 

 

In the light of the foregoing, the rapporteurs confirm the finding of the previous visits: Luxembourg is in compliance with Article 5 of the Charter, as changes to local authority boundaries are not only voluntary but are always preceded by a referendum of the electorate of the communes concerned. 

Article 6.1
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

Without prejudice to more general statutory provisions, local authorities shall be able to determine their own internal administrative structures in order to adapt them to local needs and ensure effective management.

The legislation makes certain tools available to communes to enable them to perform both their mandatory and their optional tasks. Firstly, the communes may carry out their tasks as they wish; secondly, the law provides them with various means of working with other legal entities, by forming associations of communes or through agreements on matters of local interest. 

 

As local spatial planning and urban development are increasingly complex matters, it has become necessary to provide communal authorities with qualified staff who can ensure that the legislation in these areas is correctly applied. This is why communal technical services are now regulated by the law of 28 July 2011 amending the amended law of 19 July 2004 on local spatial planning and urban development and amending the amended Communal Law of 13 December 1988, the amended law of 28 December 1988 regulating access to the occupations of skilled tradesman, merchant, manufacturer and certain liberal professions, the amended law of 19 January 2004 concerning the protection of nature and natural resources and the law of 19 December 2008 on water. 

 

The communal technical services’ task is to assist communal bodies both with the application of the law on communal spatial planning and urban development and its implementing regulations and with the preparation and implementation of local spatial planning projects and schemes and the buildings regulations. 

 

The law also requires communes with 10 000 inhabitants or more to set up appropriate technical services, including at least one urban or spatial planner who meets the statutory conditions governing the profession and, where needed, one or more officers with a professional background in technical engineering. 

 

Every commune with 10 000 or more inhabitants may decide to recruit an urban or spatial planner, and a number of communes with fewer than 10 000 inhabitants may decide, with the approval of the relevant minister, to come together to recruit a joint urban or spatial planner in accordance with the procedures laid down by the Communal Law for the appointment of a joint secretary. 

 

Each commune with 3 000 inhabitants or more is required to employ at least one local government officer with a professional background in technical engineering (Bachelor level) to take charge of technical service duties. 

 

During the consultation procedure, the Ministry of the Interior pointed out that the purpose of the law was to establish minimum operating criteria to ensure that the work performed by communal technical services was of an appropriate standard in terms of quality and that these criteria were not disputed by the communes. 

 

In view of these constraints, however, the co-rapporteurs believe that the freedom enjoyed by communes remains limited in this area and therefore conclude that Article 6.1 of the Charter is only partially complied with. 

Article 6.2
Appropriate administrative structures and resources for the tasks of local authorities - Article ratified

The conditions of service of local government employees shall be such as to permit the recruitment of high-quality staff on the basis of merit and competence; to this end adequate training opportunities, remuneration and career prospects shall be provided.

To perform some of their tasks, the communes employ their own staff (local government officers, manual and non-manual workers), who then provide the communal services. Communes are free to establish their own organisation charts and the local government officer posts they consider necessary for these purposes, albeit always subject to the prior authorisation of the Minister of the Interior. For although the communes establish their own staffing requirements, it is the Minister of the Interior who approves the creation of the post and the appointment of the officer. Admission exams are organised by the state but local government officers are paid by the commune. 

 

Article 87 of the amended Communal Law requires each commune to have a secretary. The rules on the recruitment and examination of candidates for the post of communal secretary are contained in the Grand Ducal regulation of 1 February 2008. 

 

Article 92 of the amended Communal Law also requires each commune to have a revenue officer (receveur) who handles the commune’s expenditure and receipts. Like any other member of the communal staff, revenue officers are placed under the supervision of the college of the mayor and aldermen (Article 57 of the Communal Law). With the assistance of the communal secretary, the college verifies the revenue officer’s accounts at least once every three months. The college is also required to take steps to ensure the safety of revenue office staff. 

 

In the light of the interviews that they conducted, the co-rapporteurs can only express their concern that staff recruitment is still subject to the prior approval of the Minister of the Interior where the creation of posts and the appointment of local government officers are concerned. Once adopted and implemented, the administrative supervision reform is expected to do away with the requirement for such approval, however. 

 

During the consultation procedure, the Ministry of the Interior confirmed that the creation of posts by the communal council and the appointment of local government officers will no longer be subject to the approval of the minister with the forthcoming entry into force of the administrative supervision reform.  

 

Pending the enactment of legislation abolishing the requirement for ministerial approval, the co rapporteurs conclude that, as it stands, the situation in Luxembourg only partially complies with Article 6.2 of the European Charter of Local Self-Government. 

Article 7.1
Conditions under which responsibilities at local level are exercised - Article ratified

The conditions of office of local elected representatives shall provide for free exercise of their functions.


Even though mayors are appointed by the Grand Duke and aldermen are appointed by the Minister of the Interior, both must be chosen from among the communal councillors and the practice is for the majority faction on the newly elected communal council to put forward a proposal to the state authorities. This system has not given rise to any criticism from Luxembourg’s local elected representatives, especially given the fact that the Communal Law provides for the possibility of a no-confidence motion when the communal budget is being voted on, which is a sign that the communal executive body is indeed accountable to the elected council.

 

Under Article 107, paragraph 3, of the Constitution, the Grand Duke has the right to dissolve the communal council, which is directly elected. In the event of commonly acknowledged misconduct, fault or gross negligence (concepts not defined by law), aldermen may be removed from office by the Minister of the Interior, while mayors may be suspended by the Grand Duke. To date, the Grand Duke has never exercised this right.

 

The rapporteurs were informed that, if the current proposal to revise the Constitution is adopted, in future it will be the government in cabinet that dissolves the communal council, with the additional stipulation that any dissolution must be carried out 'in the interest of the management of the commune'. In this respect, the rapporteurs note that the legislative provisions under which the central authorities (the Grand Duke or the government) have the power to appoint mayors and aldermen and to dissolve the directly elected communal council are incompatible with the democratic principles enshrined in the Charter. 

 

In the view of the co-rapporteurs, although these powers have not been used in practice, the fact that such provisions exist in law means that the situation is only partly in conformity with Article 7.1 of the Charter. The rapporteurs therefore encourage the authorities to do away with the possibility for the central administration to appoint mayors and aldermen and to dissolve communal councils. 

Article 7.2
Conditions under which responsibilities at local level are exercised - Article ratified

They shall allow for appropriate financial compensation for expenses incurred in the exercise of the office in question as well as, where appropriate, compensation for loss of earnings or remuneration for work done and corresponding social welfare protection.

Persons holding the office of mayor or alderman are paid an allowance which is intended to offset the expenses incurred in the performance of their duties. Allowances for mayors and aldermen are set by the communal council with the approval of the Minister of the Interior. The amended Grand Ducal regulation of 13 February 2009 establishes the upper limits for these allowances. Besides these allowances, mayors and aldermen may not receive any remuneration financed by the commune under any pretext or designation whatsoever (Article 55 of the Communal Law). 

 

On the whole, the level of allowances is regarded as too low in view of the responsibilities exercised and the time commitment required, especially as demand outstrips supply in Luxembourg’s job market; it is therefore becoming increasingly difficult to find people to run for local elected office. 

 

Mayors and aldermen are not entitled to the fees which may be paid to communal councillors for attending meetings of the council and its committees. However, this prohibition, set out in Article 55, does not apply to travel expenses, subsistence costs or telephone charges. 

 

Mayors, aldermen and communal councillors who work in the public or private sectors, along with those who are self-employed or not working and under 65, are entitled to leave for political activities in order to discharge their duties. The detailed rules on leave for political activities are set out in the Communal Law and the amended Grand Ducal regulation of 6 December 1989 on political leave for mayors, aldermen and communal councillors. In the case of communes with 10 000 inhabitants or more, for example, the mayor is entitled to 40 hours of political leave per week (full-time) and the aldermen, 20 hours per week (part-time). Councillors are entitled to 3 hours per week in communes with fewer than 3 000 inhabitants and to 5 hours in other communes. On top of that, each communal council is entitled to 9 hours, to be distributed among its members by decision of the council, mainly on the basis of their activities within associations of communes (Art. 3bis of the Grand Ducal regulation of 6 December 1989). 

 

An assessment of elected representatives’ social protection is currently being carried out as part of the Communal Law reform. Adjustments to the legislative framework should be considered where appropriate. The Ministry of the Interior is also looking into whether increasing the number of weekly hours of political leave would be appropriate.

 

Although the situation could be further improved by the reforms mentioned at the meetings, the co-rapporteurs conclude that overall, Luxembourg’s legislation complies with Article 7.2 of the European Charter of Local Self-Government. 

Article 7.3
Conditions under which responsibilities at local level are exercised - Article ratified

Any functions and activities which are deemed incompatible with the holding of local elective office shall be determined by statute or fundamental legal principles.

At the meetings, the co-rapporteurs did not hear any criticism regarding any restrictions there might be on holding elected office.  

 

It is not prohibited to hold office at local and national level simultaneously although the Minister of the Interior told the delegation that the possibility of a future ban could not be ruled out. 

 

The co-rapporteurs are of the opinion that the situation in Luxembourg is in compliance with the provisions of Article 7.3. 

Article 8.1
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of local authorities may only be exercised according to such procedures and in such cases as are provided for by the constitution or by statute.

Administrative supervision of the communes is governed by Part 3 of the amended Communal Law of 13 December 1988 entitled “Administrative supervision”. However, numerous other texts also require decisions by communal authorities to be approved by a higher authority. 

 

In the opinion of the co-rapporteurs therefore, Luxembourg complies with Article 8.1 of the Charter.

Article 8.2
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of the activities of the local authorities shall normally aim only at ensuring compliance with the law and with constitutional principles. Administrative supervision may however be exercised with regard to expediency by higher-level authorities in respect of tasks the execution of which is delegated to local authorities.

Although the Constitution recognised communes’ right to local self-government, it also introduced a supervisory procedure aimed at preventing communal decisions from undermining the fundamental interests of the state. That is why Article 107 of the Constitution also provides for oversight of communal administration. Such oversight, which the Ministry of the Interior said was due to be relaxed and simplified, is exercised by the Grand Duke and the Minister of the Interior, meaning that a form of “administrative supervision” is still in place. 

 

The supervision thus exercised by the state authorities over the communes is regulated by statute, which envisages various measures for overseeing the activities of the communes. The law establishes various means of supervising the activities of communal authorities. The Directorate of Communal Affairs is mainly responsible for reviewing the legality of any acts or decisions of communes, groupings of communes or public institutions overseen by communes which are submitted to it. Power of approval is exercised in the cases expressly provided for by law. 

 

In certain cases, the Minister of the Interior may take ex officio measures, for example, to rectify a communal budget that does not comply with the laws and regulations or that has not been put forward or approved within the prescribed time. He or she may also do so if the communal council seeks to avoid payment of mandatory costs which it is required to bear by law, by refusing to allocate all or some of those costs. If the college of the mayor and aldermen refuses or omits to authorise expenditure which the commune is required to bear by law, the Minister of the Interior may order that the expenditure be effected immediately. Likewise, if the college of the mayor and aldermen refuses or omits to draw up an order for outstanding revenue, the Minister of the Interior may order that the sum be recovered immediately. Lastly, in all cases where budgets, accounts or other documents are not submitted within the prescribed time, the Minister of the Interior may, in accordance with Article 108 of the Communal Law, appoint a special commissioner to carry out the outstanding work at the expense of the defaulting parties. 

 

Supervision of persons may also be exercised in respect of individuals (suspension or dismissal of a mayor or alderman) or groups (dissolution of the communal council) and amounts to a disciplinary power. Supervision of individuals may be exercised only in respect of mayors and aldermen, who are instruments of local government and, at the same time, representatives of the state. It does not apply to communal councillors. 

 

The provisions on financial supervision are found in Part 4 of the same law, under the heading “Communal accounts”. Here too, many communal authority decisions, such as approval of the budget and any amendments made thereto during the year, and adoption of the accounts, are subject to ministerial approval. At the same time, the Ministry of the Interior has an office responsible for carrying out on-site audits of local government accounts. 

 

In the light of the above, the co-rapporteurs consider that the situation in Luxembourg only partially complies with Article 8.2 of the Charter. 

Article 8.3
Administrative supervision of local authorities' activities - Article ratified

Administrative supervision of local authorities shall be exercised in such a way as to ensure that the intervention of the controlling authority is kept in proportion to the importance of the interests which it is intended to protect.

The Congress had questioned the conformity of the system of administrative supervision with the Charter before, in its two previous recommendations, and invited the Luxembourg authorities to “revise their legislation on supervision of local authorities with a view to confining such control to a posteriori verification of strict legality”. It emerged from the co-rapporteurs’ meetings, however, and this was the opinion of SYVICOL in particular, that state supervision persists, particularly in the field of urban planning. 

 

The co-rapporteurs note that a legislative amendment is being drafted with the aim of relaxing and simplifying the system of general supervision concerning the possible annulment of decisions and suspension. Many communal decisions will no longer be subject to prior approval and will become enforceable straightaway, but a large number of them will still have to be submitted to the Minister of the Interior, who may suspend them or set them aside within a certain period. If the minister fails to respond within three months of the decision being submitted, it will be deemed to have been approved. The main change therefore consists in administrative simplification of the supervisory process. The transmission of communal decisions will be made mandatory in all cases and an institutional dialogue on issues relating to legality will be introduced. Disputes over purely legal questions will be settled by the administrative court. Referral to the administrative court will be neither automatic nor mandatory, however, and will only happen if a decision by the supervisory authority is challenged. 

 

Consequently, the co-rapporteurs note that the situation is still not compliant with Article 8.3 of the Charter, notably where urban planning and the hiring of local government officers are concerned, and will therefore pay particular attention to the content and implementation of the legislation being drafted. 

Article 9.2
Financial resources of local authorities - Article ratified

Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law.

In Luxembourg, the decentralisation of expenditure is still limited: the share of local authorities in GDP and total public spending is low compared with the OECD average for unitary countries (9.2% of GDP and 28.7% of public expenditure) and with the average of European Union member states (15.3% of GDP and 33.5% of public expenditure). Overall, current expenditure accounts for only 69% of communal expenditure, reflecting the fact that municipalities’ powers and responsibilities are limited in scope and the focus is on capital expenditure, financing public infrastructure and utilities. 

 

As for expenditure, the revenue of Luxembourg’s communes accounts for a relatively low share of total public revenue and of GDP compared with other OECD and EU countries. All municipal taxes are own-source. The most important tax by far is the Communal Business Tax (ICC), which is only levied on the profits of commercial enterprises. In addition to the ICC, municipalities also receive a property tax levied on land and buildings. As for the ICC, the property tax rate is set by the communal council but is subject to approval by the Ministry of the Interior. Communes also receive allocations from the Communal Block Grant Fund (FDGC), which is calculated mainly on the basis of criteria such as population, number of salaried jobs, socio-economic indicators, number of social housing units and surface area, plus a lump sum. 

 

In the light of these statistical data, the co-rapporteurs consider that communal revenues remain relatively moderate but commensurate with the powers exercised: the Luxembourg situation is therefore in line with Article 9.2 of the Charter. 

Article 9.8
Financial resources of local authorities - Article ratified

For the purpose of borrowing for capital investment, local authorities shall have access to the national capital market within the limits of the law.

Luxembourg’s communes are permitted to take out loans in order to fund capital expenditure, but only if other methods of financing are neither feasible nor economical and if the commune is in a position to make regular annual repayments. 

 

Any loans in excess of 50 000 euros must be approved by the Minister of the Interior. 

 

In any case, borrowing may be used only to obtain the funds needed to balance the extraordinary budget and only then if all the funds carried over from previous years have already been used up and provided the ordinary budget can support the capital and interest repayments.

 

Despite the conditions set out above, the co-rapporteurs consider that the situation is overall in compliance with Article 9.8 of the Charter. 

Article 9.7
Financial resources of local authorities - Article ratified

As far as possible, grants to local authorities shall not be earmarked for the financing of specific projects. The provision of grants shall not remove the basic freedom of local authorities to exercise policy discretion within their own jurisdiction.

Local taxes and state grants awarded through the Communal Block Grant Fund constitute “non-earmarked” income for the communes, whereas local charges and state subsidies are “earmarked” income, to the extent that they are intended to pay for specific services provided by the communes and to finance clearly defined activities respectively. 

 

The co-rapporteurs are of the opinion that the situation is in compliance with Article 9.7 of the Charter. 

Article 9.6
Financial resources of local authorities - Article ratified

Local authorities shall be consulted, in an appropriate manner, on the way in which redistributed resources are to be allocated to them.

There can be no doubt that the consultation of communes by Luxembourg’s central authorities, including on budgetary matters, something that was highlighted by SYVICOL during the meetings, does in fact take place and is generally satisfactory. Although the procedure for government consultation of local authorities already exists in practice, it should be formalised in law. The local authorities we met confirmed their expectations in this respect, although whether the Communal Law reform will satisfy those expectations is not yet clear. 

 

As regards Article 9.6 of the Charter, the co-rapporteurs therefore conclude that the Luxembourg situation is partially compliant with the Charter, pending the introduction of a statutory requirement for consultation. 

Article 9.5
Financial resources of local authorities - Article ratified

The protection of financially weaker local authorities calls for the institution of financial equalisation procedures or equivalent measures which are designed to correct the effects of the unequal distribution of potential sources of finance and of the financial burden they must support. Such procedures or measures shall not diminish the discretion local authorities may exercise within their own sphere of responsibility.

In 2017, Luxembourg undertook a major financial reform with the aim of improving the stability of local finances and reducing disparities between communes by readjusting the equalisation criteria, while trying to take better account of their different tasks and needs. Since its implementation, communes may only keep up to 35% of the Communal Business Tax (ICC) receipts, provided that this does not exceed 35% of the national average per capita: the rest goes to the equalisation fund (Communal Block Grant Fund), which is responsible for redistributing this revenue to the communes on the basis of uniform criteria, thereby helping to simplify the system and make it more transparent. 

 

While the new model significantly reduces income disparities, it has also engendered a number of new inequalities between communes. Although the law provides for state compensation to be paid to communes adversely affected by the new distribution system, some communes will undoubtedly have less financial freedom in practice. 

 

The co-rapporteurs therefore consider that the situation in Luxembourg only partially complies with Article 9.5 of the Charter. 

Article 9.3
Financial resources of local authorities - Article ratified

Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.

As regards taxes, under Article 107 of the Constitution and Article 105 of the amended Communal Law of 13 December 1988, communal regulations introducing charges must be approved by the Grand Duke if the charges in question are in the nature of taxes proper designed to cover general expenditure from the communal budget, such as charges intended to contribute to the financing of collective facilities. 

 

The fiscal autonomy accorded to communes under Article 107, paragraph 3, is therefore actually still subject to the restriction whereby the taxes raised must serve to cover a financial need. Fulfilling this requirement to provide proof is not easy, however, as demonstrated by the refusal to approve certain regulations adopted on the basis of the communes’ general fiscal powers. 

 

The co-rapporteurs therefore consider that the situation in Luxembourg only partially complies with Article 9.3 of the Charter. 

Article 9.1
Financial resources of local authorities - Article ratified

Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers.

When discussing communal finances, a distinction needs to be made between communes’ ordinary revenues which are designed to cover current expenditure and extraordinary revenues which are designed to cover capital expenditure. 

 

Communes’ ordinary revenues are intended to cover their operating costs and may be subdivided as follows: 

Local taxes: 

  • Communal Business Tax (26.1% of communal revenue) 
  • land tax (1.4% of communal revenue) 
  • and various other taxes, although their financial impact is negligible

Communal Block Grant Fund (52% of communal revenue) 
State subsidies for the running of some public services 
Local charges for: 

  • drinking water supplies 
  • the removal and treatment of wastewater 
  • waste disposal 
  • the sale of various goods and services (electricity, gas, etc.) 

 

In addition to this official allocation, the question of whether the resources thereby made available are adequate has been raised and was the subject of a study by the Banque centrale du Luxembourg, on 20 March 2020. While it concluded that there had been an increase in non-earmarked revenue and an overall rise in communal grants, it also noted that earmarked revenue for the operation of certain public services still existed and that some communes had occasionally run into difficulties due to the implementation of the 2017 reform. 

 

As pointed out in Resolution 460 (2020) adopted by the Statutory Forum of the Congress of Local and Regional Authorities of the Council of Europe on 7 December 2020, providing a contemporary commentary by the Congress on the explanatory report to the European Charter of Local Self-Government, Article 9.1 of the Charter stresses “the freedom of local authorities to dispose of (at least) their ‘own resources’ within the framework of their powers. Consequently, Article 9.1 enshrines both a right (to have their own resources) and the freedom (to freely spend those resources). This freedom takes the form of various spending decisions, the most important being the adoption of an annual budget. Consequently, local authorities should be free to adopt their own budget”. 

 

Since the issue of free disposal of sufficient own resources still seems to pose a problem, as already noted in the previous Recommendation in 2015, the co-rapporteurs consider that the Luxembourg situation is only partially in line with Article 9.1 of the European Charter of Local Self-Government. 

Article 9.4
Financial resources of local authorities - Article ratified

The financial systems on which resources available to local authorities are based shall be of a sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of the cost of carrying out their tasks.

Communes rely mainly on grants and subsidies, which account for around half of their revenue, a level slightly above the average of OECD unitary countries (48.8%) and around 10 percentage points above the average for the European Union (41.1%). Taxes, tariffs, fees, and property income make up the other half, with a significant weighting of tariffs and fees by international standards. 

 

Beyond this balance between the different categories of resources, there is no mechanism in Luxembourg to ensure that communal resources, whether they come from tax revenue or state grants, rise in line with any increase in the cost of the tasks they perform. 

 

The co-rapporteurs therefore consider that the Luxembourg situation is only partially in line with Article 9.4 of the European Charter of Local Self-Government. 

Article 10.1
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, in exercising their powers, to co-operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest.

Luxembourg communes are entitled, in exercising their powers, to co-operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest. Co-operation may be governed by an agreement subject to approval if the value exceeds €100 000 (Art. 173ter of the Communal Law), by means of various types of private companies (Art. 173bis), including non-profit organisations, or even extend to forming an association of communes. These associations are public institutions whose operation is covered in detail by the law of 23 February 2001. They are established by Grand Ducal decree following “concordant deliberations” by which all the member communes agree to form an association. Central government intervention is necessary, therefore, but this does not pose a problem in practice.

 

The co-rapporteurs therefore consider that the situation in Luxembourg complies with Article 10.1 of the Charter. 

Article 10.2
Local authorities' right to associate - Article ratified

The entitlement of local authorities to belong to an association for the protection and promotion of their common interests and to belong to an international association of local authorities shall be recognised in each State.

Luxembourg communes may join local authority associations whose purpose is to promote their common interests. These associations play a fundamental role in representing and defending the rights, powers and interests of local authorities and they carry out many activities on behalf of them all (not only in favour of their members). This may include lobbying national or regional governments or parliaments. They may also promote activities and initiatives for the benefit of all local authorities, such as training programmes, publications and studies, awareness-raising campaigns, etc. SYVICOL is the best example of this. Since 1986, it has been working to promote, safeguard and defend the general and common interests of its members. 

 

SYVICOL has accordingly managed to establish itself as a spokesperson for the communes, by becoming the government’s preferred contact in all matters concerning local authorities. Alongside its lobbying activities in decision-making processes at national level, SYVICOL actively engages with several European and international bodies whose task is to defend common interests. 

 

More generally, there is no legislation prohibiting local authorities in Luxembourg from joining such associations either at national or international level: the communes are therefore free to exercise this right and do not hesitate to do so. 

 

Consequently, the co-rapporteurs are of the opinion that the situation in Luxembourg wholly complies with Article 10.2 of the European Charter of Local Self-Government. 

Article 10.3
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, under such conditions as may be provided for by the law, to co-operate with their counterparts in other States.

Local authorities in Luxembourg are entitled to co-operate with their counterparts in another country, either in the form of transfrontier co-operation or in the more general context of international co operation, provided that this does not undermine Luxembourg’s conduct of foreign affairs. 

 

Transfrontier co-operation may take different forms, from more or less symbolic town twinnings between local authorities that are physically far apart to wide-ranging co-operation agreements between local authorities that are located on either side of one of Luxembourg’s borders but are confronted with the same problems such as transport, air quality or waste.

 

The co-rapporteurs accordingly conclude that the situation is wholly compliant with Article 10.3 of the Charter.

Article 11
Legal protection of local selfgovernment - Article ratified

Local authorities shall have the right of recourse to a judicial remedy in order to secure free exercise of their powers and respect for such principles of local self-government as are enshrined in the constitution or domestic legislation.

Under the Constitution (Article 107, paragraph 1), the communes possess legal personality and, as such, can take legal action against any state decision that might interfere with the free exercise of their powers. 

 

Supervisory measures may also be challenged in the courts. Article 107 of the Communal Law further provides that local authorities have a right of appeal concerning any decision of an individual or regulatory nature which has been set aside or denied approval by the Grand Duke, by the Minister of the Interior or by another supervisory authority. Such appeals are to be lodged with the Administrative Court. 

 

As regards communal council decisions which require the approval of a higher authority, if approval is denied the communal authorities can appeal to the Administrative Court. 

 

The co-rapporteurs therefore consider that the situation in Luxembourg is fully in line with Article 11 of the Charter. 

ACCESSION

to the Council of Europe 5 May 1949

RATIFICATION

of the European Charter of Local Self-Government 15 May 1987

CONSTITUTION | NATIONAL LEGISLATION

The principle of local self-government is explicitly recognised in the Constitution and in legislation. It is referred to in Chapter IX of the Luxembourg Constitution entitled “Communes”, Article 107, paragraph 1, of which provides that “communes form autonomous authorities, organised on a territorial basis, possessing legal personality and managing their own assets and interests through their subordinate bodies”. The amended Communal Law of 13 December 1988 lays down detailed rules on the organisation of the communal system. The Council of State and the ordinary and administrative courts ensure compliance with the requirements of the European Charter of Local Self-Government. 



30Ratified provision(s)
0Provision(s) with reservation(s)
0 Unratified Provision(s)
18Compliant Provision(s)
11Partially Compliant Articles
1Non-compliant Article