Luxembourg's Chamber of Deputies on 9 July approved subsidies on motor fuel, gas, electricity and heating oil for households and businesses, part of a €432.5 million tripartite package prompted by an oil-price shock from the Strait of Hormuz. Opponents backed the aid but criticised its cost and its late start.
Europe's leaders began negotiating the 2028-2034 EU budget in Brussels and left without agreement; Luxembourg's Luc Frieden argued, unusually for a small wealthy state, for a larger and more ambitious Union.
Luxembourg is the only sovereign grand duchy on Earth, a constitutional monarchy where the Grand Duke is head of state but governs almost nothing. The 2023 constitution clarified that he promulgates laws rather than approves them. In October 2025, Grand Duke Henri abdicated and his son became Grand Duke Guillaume V. Real power lies with the 60-member Chamber of Deputies and a government led by Prime Minister Luc Frieden.
Luc Frieden returned to government in 2023 after a career in law, finance and CSV-led cabinets. His record now matters because Luxembourg faces pressure on housing, growth, public finances and its financial model.
Speaking at Harvard on 6 February, Luc Frieden told a European audience the continent can no longer take the United States for granted and must own its economy, energy and security. For Luxembourg — Europe's largest fund domicile and one of its most open economies — his call to build a single capital market and cut external dependency is a matter of direct national interest, not grand strategy.