According to Luxembourg cabinet minister Jeannot Krecké, the sporting arena makes an excellent school for politicians. And he should know: Mr Krecké began his career as a professional football player and trained as a physical education teacher. Today, his dual role of foreign trade minister and minister for sport makes him unique among his global peers.

“Team sports taught me about team spirit, which should be the most important thing in politics,” says Mr Krecké. But above all, sport teaches you how to lose well, he avows: “Too many politicians find themselves scaling the career ladder only to find that as soon as they lose they are never heard of again.” Not Mr Krecké; though to be fair he has not sustained many losses during his personal and political career and has made his lifelong winning streak seem effortless.


Financial experience

A keen sailor, Mr Krecké was a member of the crew that won the transatlantic Constitution Race in 1987. Following his sporting successes, Mr Krecké began a political ascent from local politics to a number of senior national budgetary and finance committee positions before being voted in as minister of the economy and foreign trade and minister of sport in July 2004, following national elections in June.

Mr Krecké co-authored a manual on personal taxation and has been responsible for reporting on government budgets and tax fraud. His financial sector experience is invaluable for a government role in foreign trade because the largest stream of Luxembourg’s foreign investment comes through its finance sector. Luxembourg is the world’s eighth largest banking centre and its investment fund business is ranked second in the world after the US.

Logistics hub

But just as the steel industry, upon which the tiny principality’s wealth was built, disappeared abroad, the financial sector is not immune from collapse; a prospect keenly felt during the recent financial markets turmoil, proving that diversifying Luxembourg’s foreign investment is key.

“We are very proud of our financial services, but we are busy developing other sectors

such as manufacturing, logistical platforms and parks, and a health technology hub,” says Mr Krecké.

It may seem surprising that a landlocked country of only 2500 square kilometres has a thriving maritime sector, but by developing strategic links to Europe’s major ports, Luxembourg is trying to position itself as Europe’s premier logistics hub.

“We are the main entrance point and logistical centre for Chinese goods into Europe, not only air freight but ship freight, which is then distributed to eastern and southern Europe,” says Mr Krecké.

Luxembourg freight company Cargolux handles two-thirds of the country’s freight business. “We have a special rail system and now runs to Perpignan and Barcelona which takes whole sea freight trailers down to southern Europe and we would like to develop more links to eastern Europe,” says Mr Krecké.

Ship freight from the East does not arrive in Europe via the Mediterranean through Italy or Spain, says Mr Krecké, but rather it is being transported around the North Sea to Antwerp, Rotterdam and Hamburg, which are the three ports with which Luxembourg is keen to form relationships.

Health technology

As well as logistics, Luxembourg’s diversification plan includes developing a health technology sector. Negotiations are in the pipeline with three major US institutes, to become partners in health technology initiatives.

“I have visited Phoenix, Arizona, and from that example we are trying to develop the same model,” says Mr Krecké, who presented plans for the strategic partnerships in mid-May.

As regards industry, Luxembourg hosts foreign companies including Arcelor Mittal, which has production units and its European headquarters in the city.

“We have lots of companies – particularly from the US – that have elected to have their European platform and company headquarters as well as production lines in Luxembourg,”

says Mr Krecké. In fact, Luxembourg plays host to more than 30 firms from the automotive parts sector, including Goodyear and Dupont. “We have a strong industrial basis in the automotive branch, with so many suppliers based here that you can be sure that every car in Europe contains a component which has been made in Luxembourg.”

But even diversification from Luxembourg’s core financial services industry has its dangers. For example, manufacturing has seen the rise of low-cost Eastern destinations winning business since the beginning of 2000.

Tax breaks

Mr Krecké’s answer is predictable, albeit sensible. “We are focused on higher value-added products with a strong innovation and research component,” he says. And he has policy to back up the rhetoric. From January this year, all revenue arising from patents and intellectual property is eligible for an 80% tax break. “We have made a number of efforts to try and support our companies to innovate and be first movers in their markets,” he says.

Though Luxembourg is home to Europe’s biggest private broadcasting company, RTL, and the continent’s biggest air freight company, Cargolux, there are many challenges in keeping Luxembourg attractive for international investors. But this is not a problem for a man who never takes the easy route. After all, his idea of a holiday is organising polar expeditions in the Greenland Sea and around Spitzberg, as he did in 1989 and 1992, respectively.

“We have to persuade our population that our success was based on openness, because everyone is a bit anxious at the moment about how the economic future will be shaped,” says Mr. Krecké.

Born to be Europeans

Preaching openness to the 500,000 population, of which at least one-third is made up of foreigners, should not be too difficult. Luxembourg has always had a strong sense of belonging to a European community and has relied upon attracting a skilled workforce from neighbouring countries as the basis of its success.

As a founder member of forerunner, the EU European Economic Community, formed in 1948, European ties remain strong. So much so that the current prime minister Jean-Claude Juncker’s predecessor, Jacques Santer, became president of the EU after his term ended in the elections of 2004, making Mr Krecké part of an enduring European dynasty.




Minister of the economy and foreign trade, minister of sport

1997Parliamentary Group


1994Parliamentary Group