Mr President,
Ladies and Gentlemen,
The last time I expressed my views here in parliament on the events surrounding Arcelor in the context of the hostile takeover bid, or exchange offer, by Mittal, was on 31 January. 1 February, in Paris, was the last time I spoke out internationally on this subject by saying that a hostile takeover of Arcelor by the Mittal group would prompt a no less hostile reaction from the Luxembourg government. Since then I have – those that know me are aware of how difficult this has been for me – kept remarkably quiet on the subject.
The moment has come, here in this house where the government takes responsibility for its actions, to make a statement on the subject of recent events surrounding the attempt by the Indian-British Mittal group simply to take over Arcelor.
Life in the commercial world, in politics and international business is not much different from private life. You see how two people do not manage to get together or how two people drift apart. And those looking in from the outside do not understand how some couples can fall in love or how some couples fight and end up not getting together. Only those that are in the middle of it all understand what is being said between two people when nobody else is listening. You then have to learn to live with the fact that those that are not present when key issues are being discussed comment on the affair as though they had been present every step of the way.
Intimate talks marking the beginning of love, the end of love, the interruption of love, further trial periods and new commitments, shy away from public settings, because they do not take place in public. And yet onlookers make out they have been there all along and make fully authorised comments on this and that, on what may have been said, on what may have been thought.
Private life mirrors public life, and public life mirrors business life. And it is when public life and business life cross paths that the excitement starts. Outside comments, however, give rise to the belief that everyone was present every step of the way. Following recent developments, in particular those that took place last Sunday when Arcelor’s board of directors decided to accept Mittal’s hugely increased offer, I can account for the fact that with the exception of those who in the last month were more or less – more rather than less – involved in all the discussions, that those people are probably the only ones who actually understand what is going on.
I don’t have the slightest doubt that Luxembourgers watching events unfold, much as in an exciting match between two teams, even though it wasn’t quite like this, don’t understand what actually took place. And I am of the opinion that this lack of understanding shown by our people here at home regarding recent events, has a lot to do with the fact, firstly, that they were not present at all times, secondly, that the government was unable to disclose everything that took place over the last few months and thirdly, that many people essentially believe that the Mittal group’s proposal to Arcelor – and therefore to us – was still exactly the same as what Mittal proposed to Arcelor on 27 January this year, when the whole attempt to appropriate Arcelor first came to light.
A lot has changed, however. A lot has altered. Landscapes have been newly created. Resentments have been dismantled and relations assembled between 17 January 2006 and 27 June 2006. And I would like to say a few words about this in order to generate a better understanding of what took place, and a better understanding also of the position adopted by the government in the general context that I am in the process of describing.
Unfortunately I don’t have the time right now – although nothing pleases me more than to quote myself – to once again enter into all the details of what I said here in parliament on 31 January of this year when, for the first and practically the last time, I made a statement in the name of the government on the subject of Mittal’s attempt to appropriate, to take over, Arcelor – just like that and without any far-reaching commitments.
But I would like to call to mind two, possibly three, things. Firstly, in that speech, I – and incidentally all my colleagues here expressed the same in their reaction to that speech – refused to give the impression that we here in Luxembourg are a nation that is impenetrable, that remains closed, a closed shop, a grocery store that rolls down its blinds and looks after none but itself. I said we were an open country, that we would like to trade with the rest of the world, to engage in industrial politics, including and in particular steel politics. And I refused to allow the fact that Mr Mittal is of Indian origin to become a reason for a more or less negative argument in terms of location issues. I said that the government, in its decision to oppose the hostile takeover, would not turn the fact that Mr Mittal is of Indian origin into a constitutive element of its negative reaction towards Mr Mittal’s approach. I said that Mr Mittal was a capable man, an intelligent man, that he deserved respect, that he was a man rich in insight in many aspects and that he would most likely also – and you can look this up – over time discover enough about Luxembourg that he would better understand the Luxembourgers and their reactions.
This is where we are at today. Without wanting to appear arrogant, I would like to state that the Mittal group has discovered many a thing about Luxembourg, that it has learnt a lot, things it did not know before. The fact that the Mittal group has learnt a lot about Luxembourg is – contrary to habit, I would like to rank my own credit really low – due above all to the efforts of Ministers Krecké and Frieden who, following my wishes and instructions, maintained very close contact from February onwards with the Mittal group, both father and son, time and again impressing upon them our structures of Luxembourgish communication.
The fact that today we have achieved a result that in my eyes appears acceptable from a Luxembourgish point of view and takes our national interests strongly into account, is to a very significant extent the merit of those two ministers who, admittedly in the less public manner that was called for, held explanatory discussions with the Mittal group. As head of government, I owe them my acknowledgement in the form of a thank-you.
What changes have taken place between 27 January and 27 June? If we are to be honest – a trait that is to be commended from time to time – we reacted in this negative way to the hostile offer of Mr Mittal and his group, because for a long time the feeling prevailed that Arcelor, and the way it had come into being, could continue forever in the same way and could resist the offer of Mr Mittal and his people without the help of a third party.
I actually don’t know, and this is something I in fact never believed – my previous statements made here corroborate this – how we truly thought we could stand up against the rest of the world, just because we Luxembourgers are and were the owners of 5.6% of the capital of Arcelor. It dawned on me, and this is something I had previously overlooked, that our people here in Luxembourg thought that Arcelor was in fact us. That we were Arcelor, that we represented a hundred percent Arcelor. We were never a hundred percent Arbed, and we were also never a hundred percent Arcelor. But because of the way we function here, people assumed this was the case. This, however, was not the case. We make up a minuscule part of Arcelor’s shareholding. But because of course we are that much more accomplished and smarter than the rest, we succeeded, all of us together, from the small part of Arcelor that we do indeed own, to carve the impression that without us, nothing would work.
And the fact is that not only did our people here at home think that without the Luxembourg state, without the government, without us – let us not get into institutional one-upmanship – nothing would work. Others did so too. And the fact is, as substantiated by the events of the last few months, that without the Luxembourg state, without the Luxembourg government, without a Yes or a No from the Luxembourg government, indeed nothing was going to work.
We endeavoured through contact with the French government – you heard the French President last night – the Belgian government, the German government, the Spanish government, and others, to make clear our viewpoint. And this was either intuitively shared by the other governments or spontaneously identified with. But over time, and because the world is the way it is, and because capitalism is the way it is – it is not my favourite system, and following this entire affair, much less so than ever before – it became clear that, if we wanted to emerge from this altercation as a country, as the headquarters of a company to be newly created, as the decision-making centre in Europe for all things relating to the steel industry, we had to start looking around for a partner that would help us achieve what we think and thought was in the best interest of our country and, what is more, in the best interest of the European Union.
Arcelor’s management pulled out the stops, yet not all the shifts and moves made by Arcelor’s management made obvious sense. I for one cannot really comprehend why today I am still obliged to read, in the international press, full-page advertisements placed by Arcelor, encouraging the fight against Mittal, when only yesterday and on Sunday different recommendations were issued by Arcelor’s board of directors. I have learnt that not only governments are hopeless when it comes to communicating, but that others also have a number of things to learn for the next time round. But I think there won’t be a next time round. People who constantly insist on knowing how a country should be governed are not much more accomplished than those who actually govern the country.
Once we realised that the "stand alone" theory was not going to work, we looked around for alternatives. Almost a dozen alternatives were studied, by both Arcelor’s management, which had, has and always will have our trust, and the government itself. On a few occasions we were close to landing a big deal that, incidentally, would have caused more surprise than our present solution. As is the case in real life, even the most intimate talks sometimes break down as a result of practical obstacles that suddenly arise – because such and such are already married, because such and such already have another affair that also needs resolving, because a third-party onlooker is also of the opinion that things cannot proceed as foreseen. The latter might be in Canada, they might be in Brussels, in European institutions – in short, when people want to get together, there are always others that join in the talking.
After we got a feel for all the above, to remain in the picture, we came to a conclusion and we, that is Arcelor’s management, as well as the Luxembourg State and the Luxembourg government – but with the government firmly believing it was acting in accordance with the wishes of this house; in all these months I never once felt that we indulged ourselves by tackling this affair in a party political way, something for which I also need to express my gratitude on behalf of the government – we tried to find someone with whom we could work. Enter Russian group Severstal with, at its head, Mr Alexei Mordashov.
I would like to state here that the Luxembourg government would have been a happy witness to the successful integration of Severstal and Arcelor, because we firmly believed, also from a purely industrial point of view, that this marriage would have made a lot of sense. This for many reasons, including geostrategic ones, to put it in commercial terms, because we have always enjoyed an incredibly good bilateral relationship with Russia as a country, because a personal friendship exists between the leadership of the Russian Federation and the political leadership of the Grand Duchy and because it simply made sense, by way of an integration of Severstal and Arcelor, for us to have been able to expand our steel industry into the Russian landscape and scenery. Along with the logical geographical and commercial growth that such a penetration would have brought about.
I would like to state that it is the intention of the Luxembourg government, and it must also be the intention, which it is, of the newly formed steel group Arcelor-Mittal, this being the name of the new company, to maintain extremely close relations with the Russian steel industry and in particular with the company that was prepared to take the risk of an integration with Arcelor’s structures, that this is the intention of the government and that this will be the intention of the new group. And I would also like to point out that, contrary to a belief commonly held throughout the country and possibly by others, the Luxembourg government, and I believe Arcelor’s management also, at no stage intended to use Severstal Group in a bid to put pressure on the Mittal group to come up with a more attractive offer.
I would also like to say that, not for the first time in my life, but this time very definitively, I have come to realise that we can reap our dues if we stand united. I want to say that for the political parties here. Time and again, I have been interpellated by press bodies sympathising with individual parties to make a statement on the subject of what was happening. But I soon gratefully took note of the fact that the leading political players of this country, by whom I mean the leaders of the political parties, at no time tried to push the head of government in that direction. Had this been the case, I would have had to say something sooner or later. Because this was not the case, we were much better able to defend our interests in the entire dispute surrounding this affair. Which is why my tribute is given to all those who are obliged to live political lives here and who have behaved like true statesmen throughout this affair. And I believe there are not many countries where this is possible. I have been holding concluding discussions with foreign colleagues, which explains my late arrival today, and nowhere has the debate surrounding this steel marriage taken place in such a non-partisan manner, seen from a party political point of view, as in Luxembourg. For this we are to be congratulated, since, when it comes to the crunch, we rise above all the others that forever try to derive advantage from this type of dispute, either in terms of party politics or in terms of domestic politics.
In my speech on 31 January, I identified a list of points that were crucial for the Luxembourg government and for the principal shareholder, back then, of Arcelor. And if you could do me the favour of rereading that speech, thus saving me from having to read it out again, you will realise that, in the eyes of the government, and with that I mean of our parliament also, on the subject of those points that were crucial at the time, on those same points today we are able to deliver a decent job.
At the time we voiced the criticism that a hostile takeover was an action that was not compatible with our Luxembourgish and European traditions. We were not necessarily alarmed by the unfriendly takeover offer from Mittal, but we rejected it, because, as I said back then, we did not understand it.
5 months on, we now find ourselves in a different reality, because the offer by Mittal that was unfriendly, that was hostile, has transformed itself into a friendly merger between equals. This is the way in which we like to do business with the rest of the world. This is the way in which we like to get together. Not through struggle and strife, but rather by means of a dance that allows partners gradually to move towards one another.
Back at the end of January, we said that we were unable to comprehend the industrial concept proposed by Mittal, because Mittal did not actually propose an industrial concept, and that we would continue to function according to the Arcelor structure created here at home, that we would continue to engage in steel politics in Europe and throughout the world. Mr Mittal, whom I met this afternoon with colleagues, informed me yesterday and again today that he is prepared to adopt the industrial concept of Arcelor and that he is committed to do so in reality.
This means that this steel industry deal is not based on financial interest alone, although this is obviously part of it too, but that this joint steel industry transaction is linked to a joint steel industry concept, and that an integral part of this jointly shaped steel industry concept is the adoption of the evolved, albeit young, traditions of Arcelor. The issue therefore is not the production world-wide of as many tonnes as possible, regardless of how, where or of what quality, but the creation of added value by means of those industrial policies to be implemented world-wide.
This joint industrial concept, which was nowhere to be seen in January when we rejected the hostile takeover bid from Mittal, will also include a strong emphasis on research and development and an enduring concern for the necessities that arise from the broader concept of sustainable development. From the very moment that Mittal declared itself willing to adopt the industrial concepts of Arcelor, jointly to take on the traditions and skills, the expertise, the attitudes inherited from Arcelor as they stand, our greatest concerns linked to those elements that we listed in January in our rejection of working with Mittal were dispelled, since not only was the gap narrowed on this point, but everything that Arcelor had developed into its business philosophy, ever since its creation by the Spanish, French and Luxembourgish trio, was to be adopted.
I said here on 31 January that we had great difficulty, as the Luxembourg state, an assessment thankfully shared at the time by our parliament, in understanding what is termed the governance of the group, in understanding how such a group, active world-wide, the largest such group in the world, was to be governed. It was not clear in January, although it did become clearer through discussions held by our colleagues with Mittal and several others, it was not clear at the time how the workforce was to be represented within the structures of this new group. In all our discussions, with Mr Mittal as well as with Severstal, and others with which we exchanged ideas, we pushed for a strong representation of the workforce within management, whatever the structure of this steel business that was to be controlled from Luxembourg.
We have received the guarantee from Mittal that a strong representation of the workforce shall remain in place – after all, this is a group that is active world-wide, that employs more people than Luxembourg has Luxembourgish inhabitants. This is something we had also negotiated with Severstal. And what we negotiated with Severstal was seamlessly adopted in the final stages, in the final moment, by Mittal. Luxembourg representation among the company’s management would have been satisfactory with Severstal and is also satisfactory with Mittal, because this issue was accepted without further discussion. A strong Luxembourg representation amid the board of directors of the new Arcelor-Mittal company shall remain, as was the case with Arcelor itself. The Luxembourg state, as one of the principal shareholders of the new company also, will continue to have one representative on the board of directors and will also be given an additional representative, as a political representative of the country that will be home to the headquarters of the new company. This representative will be appointed by the Luxembourg government, and should this representative at any stage leave office, it will be up to the Luxembourg government to organise his succession by selecting a new Luxembourg headquarters representative, if I may call it that, since this expression is not recognised in corporate law.
Think about it, when Mr Mittal and his group, or should I say his family, submitted a takeover proposal in January, the plan was actually for the Mittal family to be in possession of 64.1% of the new company’s voting rights. We fought against this, because we felt that the Luxembourg steel industry and everything it represents – and it represents a lot more than just what is Luxembourgish – could not simply become a family business, where one person makes the decisions, where one person sets the tone and where others only follow. Today we have the situation where former Arcelor shareholders represent over half the capital, namely 50.6%, and where Mittal will at the most own 43% of the voting rights in the new company. That is still a significant proportion. It allows for a lot, but it no longer corresponds to the 64.1% that made up one of the crucial constitutive conditions of the deal that was sought and that was depicted in January.
For every share he would own, Mr Mittal wanted more voting rights than other shareholders. Our Minister of Justice, in many a long discussion with Mr Mittal and his son, explained that things don’t work that way in Luxembourg, that we are an odd country where one thing is worth the same as another, and that one share does not yield more voting rights than another. We did not elaborate that we ourselves, when we are busy negotiating with SES or the like, occasionally think we, as the state, are above the others. And as the State, we also embody more than just capitalists running a business, because we must represent other ambitions, other projects and other viewpoints than those represented by people who do business not only in an ecumenical and widely spread collective public spirit, but also with their own interests in mind. We do not conduct industrial politics for our own interest. We conduct industrial politics because we are the politically elected representatives of a nation. Which is why we feel – something that is nevertheless widely disputed in the capitalist world – that we are different from the others. And we are indeed different from the others and we also want to stay different from the others. In any case, in this context, the outline as sought by Mr Mittal in January has dramatically changed following all these discussions, all these negotiations having taken place.
Where in a business is the engine room? Certainly not here. The engine room is where the directorate-general meets. This is where industrial politics are born. This is where investments are decided upon. This is where significant seminal decisions are taken. The concern of the Luxembourg government was to ensure that, in the option Severstal, in the option Mittal, the directorate-general would be structured in such a way that the Arcelor side, and hence the Luxembourg side, would be integrally reflected in the structure of the directorate-general. The current directorate-general, already incorporating a significant part of the former Arbed directorate-general, shall remain in force and shall include, in smaller numbers than the former Arcelor directorate-general, representatives of the Mittal group, to draw up joint policies. Arcelor has the majority of shareholders, Arcelor has a majority representation in the directorate-general, and the cooperation between Arcelor and Mittal will result in a majority representation on the board of directors, where the public interest and the interest of the workforce will benefit from maximum representation, possibly even more so than at present.
Everybody can do as they please, but I am against giving the impression here that the government has put the rest of the world in its place and thus ensured that things were done in the right way. I told you here on 31 January that I could not promise that the Luxembourg government would succeed in safeguarding those crucial points that were of such importance to Luxembourg. But we did succeed. A certain amount of credit is due to the government, that I cannot deny, obviously. But I also want to say, even if it causes me slight embarrassment, that we nurtured an extremely close working relationship with the representatives of the workforce and Arcelor’s board of directors, and in particular with the Luxembourgish representative, John Castegnaro, who is also present here today, which is why it might actually be better if he left the room when I say this. And that I derive great pleasure, as I have done in many previous years, from the fact that when the issue at stake concerns the defending of the interests of our people, the preserving of industrial sites, the prevailing of Luxembourgish viewpoints – despite the fact that the Luxembourg workforce representative does not represent Luxembourg as such, but rather the workforce of the company – we found in him a spokesperson who took part in everything we wished and who did nothing that we would not have wanted him to do, who provided us with all the important information we needed in order to make the right decisions at the right moment in time. This too is part of the Luxembourgish method of operating, something that is not found anywhere else.
Yes, it is true, and I read it in today’s press commentaries, that in January Mr Mittal promised to bring the company’s headquarters to Luxembourg. Mr Severstal, or rather Mr Mordachov, promised the same. But what Mr Mittal and his group said in January was that, sure, we agree to bring the headquarters to Luxembourg, but here are the conditions – these were of a fiscal nature and associated with transfer issues, along the lines of: headquarters Mittal in Rotterdam, headquarters Arcelor-Mittal in Luxembourg. The Minister of Justice, the Minister for the Budget and of the Treasury settled these issues in stormy discussions with the Mittal group, the result being that the headquarters are now being brought to Luxembourg, and that without any further conditions. And this fulfils a further prerequisite that we mentioned in our speech here on 31 January, namely that the headquarters of this new company, whatever its form, had to be in Luxembourg, thus allowing us to be able to take action in an architectonic manner, in a creative manner, here in Luxembourg, as a result of being home to the headquarters of this company, whatever its structure.
We said here on 31 January, we would lend our full support, without being able to make any promises of success, and regardless of how matters were to proceed, to the Luxembourgish sites and to the maintenance of employment in Luxembourg on Luxembourg steel sites. In this we succeeded. Incidentally, we would have been equally successful with Mr Mordashov and Severstal.
Now no longer taking over Arcelor, but merging with Arcelor as equals, in a friendly manner, Mittal will adopt, also because it must give evidence of its goodwill, all the agreements that have been concluded between the Luxembourg State and Arcelor. You are familiar with the plan we agreed upon in the steel tripartite, which runs from 2006 to 2007. It will be integrally respected. What was accomplished in social dialogues in many a battle here on the Luxembourg steel scene and what reached its social culmination in the steel tripartite sessions, will be integrally respected by Mittal. We will call for a steel tripartite meeting fairly soon and Mr Mittal will be taking part in this steel tripartite to present his views and to put forth his position in dialogue with the government – but this dialogue has in any case already been stormy – and the trade unions, and to disclose how he anticipates honouring the commitments that he has taken over from Arcelor and that we have agreed upon together.
The way in which we function in the steel industry has also always meant a close involvement by parliament, seeing as the State is a steel industry shareholder. Mr Mittal will no doubt introduce himself without delay to the relevant parliamentary commissions, to submit his views on the matter in talks with those that represent our government here, since they are the nation’s elected representatives, and consent to take part in critical discussions with the elected representatives of the country of Luxembourg.
Had Severstal been chosen as the suitor, and Mittal rejected – this was a possibility, after all – the wire mill in Schifflange would have been shut down, since it belongs to Mittal. The key issue now is how Arcelor and Mittal will jointly view the future of the wire mill, of the STFS in Schifflange. This will no longer be a unilateral decision made by Mittal, but a joint decision made by Arcelor and Mittal, in other words by the new company. The expectation of the Luxembourg government is such that all the commitments from one or the other party, that have met with public confrontation, shall naturally be maintained. We have also made this clear in talks over the last days as well as today.
The Luxembourg State is now faced with an additional question. You are familiar with the offer made by Mittal, I do not wish to spin out the technical details. An opportunity has been presented to the Luxembourg government, to the parliament, in other words both the government and the State – there is no need to go looking for differentials where there are none – to act in response to this offer. I would like to make two points on the subject of this offer.
First of all, it is the firm intention of the Luxembourg government to remain a shareholder of the new company. We will not withdraw from the new Arcelor-Mittal company. We want to remain one of its principal shareholders, despite the fact of course (but this would have also been the case with Severstal) that, as a result of the integration of Mittal and Arcelor – since Mittal is not taking over Arcelor, but rather integrating with Arcelor – the influence of the State will fall below 3%.
We now have two options, dear colleagues, ladies and gentlemen. Either we can choose not to profit from this offer and keep a few more shares, thus being the one and only shareholder in this casino game – something I am not keen on – who does not speak up for his shareholder’s rights and who gets no money. Or we can state that we want to be treated in the same way as all the other shareholders.
I told you on 31 January that we do not wish to sell our shares, but the way the story has unfolded, nevertheless, as a result of the commitment of our country to Arbed and Arcelor, as a result of the commitment of the citizens of this country to Arbed and Arcelor, as a result of the fact that the people of this country rescued Arbed – without this rescue operation, the composition of Arcelor would never have come about and, without the rescue operation of the Luxembourgers during the ‘70s and ‘80s, the world’s largest steel group would never have had its headquarters in Luxembourg and workplaces would never have been safeguarded in Luxembourg – we must ask ourselves, as the representatives of those generations that, to put it bluntly, had to cough up, whether we want to remain the only ones standing aside and watching others get the money. And we, the government, are of the opinion that we should join this circle of beneficiaries of the distribution that is to take place.
By accepting Mittal’s offer, the Luxembourg State will be able to feed a maximum of slightly more than 400 million Euro into its cash register. And even in receiving approximately 400 million, we still remain with just under 3% one of Arcelor’s largest shareholders. Which is why we are of the opinion that, without entering into too much detail here and now, we need to make a few things happen. This concerns tax payers and citizens, including those who pay no taxes – those people after all had to pay 3% more VAT during the ‘80s and had to pay more for this, that and the other, higher petrol prices and so forth – so that this is a matter concerning not just the tax payer who has paid taxes, but all Luxembourgers.
We are of the opinion that the money we will receive must be used for specific purposes. For a start, over the last few months, the Luxembourg government has incurred relatively high costs to secure adequate banking, financial and legal support in this takeover battle. Those bankers, those practices that provided us with counsel, considered that counsel to be rather valuable and asked a good price for it. I would like the Minister for the Budget to be reimbursed for the money he used to pay those bills, since without the work performed by all those consultants, the government would not have been able to react promptly, that is in real time, to the events that took place. We may well be clever, but we don’t know it all.
My second point. I am radically opposed to simply feeding the money earned by Luxembourgers over decades of loyalty, the profit made by the Luxembourg steel industry that we are now able to reap, into the State budget and to let it fritter away for consumer purposes. I would like that money to be put aside for forthcoming future projects, in particular in the field not only of industrial diversification; that money is better off being stationed, parked at the SNCI or in similar transformational mechanisms, rather than us simply introducing it into the budget, thereby solving our budget problems and simply letting that money flow into our everyday consumer channel. I would be happy if we could reach an agreement on this subject here in parliament.
And thirdly, in 1976 we introduced the solidarity tax and at the time we fixed it at 2.5% in order to finance unemployment costs, because back then we had no unemployment insurance here in Luxembourg. In the context of the tripartite, upon suggestion of the trade unions and because the trade unions placed a great deal of importance on emphasising the solidarity angle in the fight against unemployment, we decided to introduce a solidarity tax increase for companies and for citizens, thus for private people. The government doesn’t need to ask anyone, but obviously we want to discuss this with the relevant parliamentary commissions, whether we refrain from introducing the increase in solidarity tax for businesses and private citizens that we agreed upon in the tripartite and that the government is preparing to retain for parliament in a government bill due to be passed this autumn, whether we refrain from introducing this solidarity tax increase for the time being, because we want to devote part of the money due to us in the context of the entire Arcelor-Mittal operation to the employment fund. We would like, with the money that we will receive – whether we will call on all the money is a different matter, one that at the end of the day the Minister for the Budget will decide – to finance future, and not merely industrial, innovative projects in Luxembourg and to endow our employment fund, since our people, through paying at times up to 10% in solidarity tax into the employment fund, have contributed to the continued existence of Arbed and ensured that Arcelor came into being and that now the largest steel group in the world is able to exist.
This is why we feel that if the State, not as a result of its initiative, but as a result of its skilful approach in these conditions, is able to benefit as a principal steel industry shareholder, part of this benefit must be given back to the Luxembourgers, in the form, among others, of not proceeding with a solidarity tax increase and by obtaining means and ammunition for modernising and diversifying the Luxembourg economy, and that we should not use it to finance everyday state consumption, but rather that in recognition of the achievements of past Luxembourgers we want to provide new possibilities to future Luxembourgers, by nurturing this money to shape the future of Luxembourg.
Now, many people, myself too in fact, are of the opinion that all is now over and done with. I have been of this opinion twice already in the last 3 weeks. I cannot rule out, and I do not wish to mislead anyone, that further developments may arise in this affair. I told you here at the end of January that I could not promise you that we would succeed in maintaining Luxembourg’s position as a main decision-making centre in the European and world-wide steel industry. But we did succeed – oh, but not we alone. I mentioned the trade union representatives, I should also mention the representative of the Luxembourg government, Mr Georges Schmit from the Ministry of the Economy, who serves on the board of directors of Arcelor and who deserves huge credit. It is a rare occurrence for civil servants to be the subject of such high praise, but he is to be applauded. Un grand serviteur de l’État! Together we made it.
I told you at the end of January that I could not promise you any guarantees for our industrial sites. Yet we did acquire a guarantee for Luxembourg’s steel industry sites.
I told you at the end of January that I could not promise you that we would succeed in maintaining a maximum level of Luxembourg influence in a world-wide operating steel community. But in this we did succeed. And this applies to all those who worked on this, not just the government – I couldn’t care less whether people think the government in this case did a good job – what I would like to say is that it tried to do a good job. I do not wish to claim any credit for the government, just the acknowledgement that the government did its job properly in the most difficult of circumstances. Everything we said in January we succeeded in doing. Not the government alone, but all of us together.
I cannot assure you that all is over and done with now. I do feel that the commotion is over now and that we will get some peace. I know that, even if we do get some peace, it will be anything but peaceful, because the friendly merger between equals of Mittal and Arcelor means that the principal players of the new company will be faced with 3 to 4 extremely difficult years, because world-wide restructuring will be necessary. In Luxembourg, however, this will not involve the loss of workplaces, because the commitments that run until 2010, that we would in any case have had to renegotiate with Arcelor in 2011, will be respected by the new company. But I do not know whether tomorrow someone else will put a different plan on the table. And then it will be up to the company’s appropriate bodies and the government, represented in the company’s bodies, to reassess this new situation, should it arise.
But seen from today’s perspective and with today’s knowledge, and following all the efforts made by everyone involved and the government in order to ensure that Luxembourg remains the headquarters of this new company, that Luxembourg remains the decision-making centre of the world’s largest steel company – which is quite a feat for a country that witnessed its own steel industry go bankrupt in the ‘80s – seen from today’s perspective, with today’s knowledge, with the knowledge of the commitment made by the principal players in this affair, I would maintain and would dare to maintain, and believe to maintain, that, despite the fact that an agreement with Severstal would also have given our country great chances and opportunities, the present arrangement that has led to the merger between Mittal and Arcelor is in the interest of our country, because we remain a decision-making centre of world-wide importance, because those people that work in our smelting plants have maximum guarantees regarding their employment, because Luxembourg, through entering this merger agreement, which is a different story to bowing down before a hostile takeover, remains an important decision-making player on the world-wide steel stage.
I am not saying that the government was responsible for achieving this. I am not saying that other solutions might not have been better. But upon being placed before a choice of taking part in this solution, of making this solution possible or else, and this was a decision that members of the board of directors, workforce representatives, as well as government representatives had in particular to ask themselves and to find an answer to, upon being placed before the choice of allowing the hostile takeover by Mittal, which met with great approval in the financial world – something I don’t like, but there you go – to gather pace, to lose everything that I have just pointed out to you in terms of industrial concepts, governance structures, workforce representation, support and guarantees for Luxembourgish interests, upon being faced with this alternative, the government, after long consultations, careful reflections and after dispelling many doubts, came to the conclusion to recommend to the parliament to positively address the agreement terms that will be put forward to the General Meeting of Arcelor and that the government will vote for on 30 June.
I thank you for your extreme patience.