As a body of the executive power, the government has overall power to manage public affairs.
Each member of the government heads one or several ministerial departments to which he/she was appointed by the Grand Duke. In their respective departments, ministers carry out the duties conferred to them by the Constitution, laws and regulations.
Government members also have legislative initiative, in other words the task of developing government bills.
The administration of state assets and management of the budget are also a matter for the executive power and thus for the government.
Initiative in legislative matters
In the legislative system of the Grand Duchy of Luxembourg, the initiative for a bill may come from the Chamber of Deputies, the government or even the electorate through a reasoned proposal for legislation.
In the case of a government initiative, central government develops a draft bill, and once it has been approved by the Government Council, it is submitted in the form of a government bill (projet de loi), to the opinion of the Council of State. The government bill is accompanied by an explanatory statement in which the competent minister explains the reasons behind the bill and gives a commentary on the articles. The opinion of the Council of State is submitted to the government in the form of a reasoned report containing conclusions.
The government submits the final government bill to the Chamber of Deputies.
The government submits a government bill to the Chamber of Deputies at the same time as it refers the matter to the Council of State. One of the effects of this procedure is to open up the debate to the public, allowing interested parties to express their views on the government bill, published in the form of a parliamentary document, throughout the period before the Council of State issues its opinion and the government bill is considered by the Chamber.
The government bill is introduced in the form of a Prime Ministerial Order, whereby the Minister for Relations with Parliament is responsible for submitting it to the Chamber of Deputies and for referring it to the Council of State on behalf of the competent Minister. The text of the government bill and its appendices are distributed to the deputies and the President of the Chamber orders the bill to be sent to one or several committees.
The government is also informed of the parliament bills (proposition de loi) and can assess the opportunity of formulating a position statement. This will then be discussed in a parliamentary committee.
Once the bill is sent to the committees, the procedure is the same for parliament bills as it is for government bills: the committee's report is submitted to the members of the Chamber, who proceed with the public discussion of the entire government bill. Each member of the Chamber may contribute to the discussion or present amendments.
In the final stages, the law is passed within the Chamber of Deputies, and is ultimately enacted by the Grand Duke.
The law may only come into force after being enacted by the Grand Duke and published in the Official Journal of the Grand Duchy of Luxembourg. The implementation of the law by enactment and the publication mainly falls within the exercise of executive power. The Grand Duke enacts the law by appending his signature at the bottom of the piece of legislation bearing the enacting clause. The law must be countersigned by a member of government who assumes full responsibility for it.
Implementation of laws
Article 45 of the Constitution states in general that 'the Grand Duke takes the necessary regulations and administrative orders for the implementation of the laws'. The regulations and decrees taken by the Grand Duke may thus only be measures to implement a law and thus cannot contradict a law.
Article 47 of the Constitution also provides that '[...] the Grand Duke may, in cases that he determines, task the members of his government with taking implementation measures'.
Budget
The administration of state assets and the management of public finances are the responsibility of the executive power.
However, the Constitution reserves an important role for the legislative power's intervention and control via the annual vote on the budget at the Chamber of Deputies. By refusing to adopt the annual budget, the Chamber may put the government in a position whereby it is impossible from a practical point of view to manage public affairs.
The national budget is established in the form of an annual law and according to the rules required for legislative procedure in the case of a government initiative. It consists of an authorisation to collect revenue and incur expenditure during the year for which it was adopted.
The budgetary procedure has three phases:
- a debate on the budgetary stance when the government makes a presentation on the state of the nation, in the first semester of each year;
- a debate on financial and budgetary policy when the government bill on the state's revenue and expenditure budget is examined and voted on;
- a debate when the law approving the state's general accounts is examined.
A constitutional provision provides that each year, the budget and the state's general account must be presented to the Chamber of Deputies in the form of documents that bring together all revenue and expenditure transactions. Budget authorisations are only valid for one calendar year, in order to enable the Chamber of Deputies to carry out regular checks. There may not be any budget estimates other than those submitted to a vote by the Chamber and a budget appropriation may only be used for the specific expenditure for which the appropriation was voted.
The disbursement of public funds is the responsibility of the members of the government who order expenditure through payment orders.
The minister in charge of the budget has some right of inspection over the financial management of the other ministerial departments in order to ensure that they make their financial engagements with foresight in mind.
The Inspectorate of Finance is present at all stages of the state's financial developments: it plays an active role in the preparation and finalisation of the draft budget, it participates in financial, economic and social planning, and gives its opinion on the government bills and parliament bills likely to have an impact on the State's finances. On behalf of the minister responsible for the budget, it carries out a priori controls on the cost-effectiveness of the budget implementation measures by checking their compliance with the government's general policy. It intervenes well before public funds are spent. As a control body, it also supervises the implementation of the State's budget by following up revenue and expenditure transactions.
The State Treasury maintains the budgetary accounting and the general accounting.
The state's main resources come from levying taxes, duties and charges, which is the responsibility of the Luxembourg Inland Revenue, the Registration Duties, Estates and VAT Authority and the Customs and Excise Agency respectively. Other resources come from estate revenues, the state's shareholdings in certain companies and the operation of certain public services against payment.
When the state's normal resources are not sufficient to cover extraordinary expenses, in particular for the development of large-scale public works (railways, roads, canals, large constructions), it may take out long-term loans. However, the state may not take out any loans without the consent of the Chamber of Deputies.
Without resorting to borrowing, the state can still procure resources by issuing short-term treasury bonds. This measure applies only for a short period of time to cover a lack of liquid assets.
The disbursement of public funds is the responsibility of the members of the government who order expenditure through payment orders.