Question: Prime Minister, what is the economic outlook?
Answer: The main issue is the economic slowdown. We went down from the level of between 7 and 8 per cent growth throughout the past five years to 1.2 per cent in 2001 and 1.1 per cent in 2002, expecting between 1 and 1.5 in 2003.
That means in the electoral budget for next year no special wishes can be taken on board ... In 2004, we will be eating hard bread and there will be no sweeties.
Given the rather pessimistic outlook, we do not exclude that there could be a certain amount of new public debt in 2004. This decision has not been taken, but it is an easy one to take because we have a public debt level of less than 3 per cent of gross domestic product.
We will return to a more comfortable level of growth but I do not think we will have the same levels as before.
What about the demands on infrastructure?
The increase in population and the explosion of our labour market are continuing but they are slowing down. All the investments we have announced in recent years – roads and railways and housing and all these things – are still under implementation.
There's no reason for slowing down these huge investments we have decided. The needs are still there.
And what about the problems of immigration and integration?
I have to admit, as far as schools are concerned, Portuguese and Spanish children have increasing difficulties integrating because they have to express themselves not only in French but also in German.
But we are organising special programmes dedicated to children coming from those families.
This is a serious concern not just for the government but for the whole of Luxembourg society.
What is the role of the financial sector?
Our industry is performing quite well, but that's not sufficient to counterbalance the problems of the financial centre.
Luxembourg is very dependent on the financial centre but less dependent on the financial centre than it was on the steel sector 20 or 30 years.
We are diversified. We no longer rely on private banking, we have a whole range of products offered in Luxembourg and these products are not all in a crisis situation.
My intention is to decrease this dependency ... [At the moment] our industry is performing quite well, but that's not sufficient to counterbalance the problems of the financial centre.
What about the next election?
We have been the government since 1999 and there's a hope in other political quarters that we could be punished by electors mainly for social reforms.
We introduced a draft law organising personal relations for homosexual partners and unmarried partners.
My opponents will have difficulties in explaining to the electors that my party is more conservative than other parties in Luxembourg or more conservative than other governments in Europe
What about the savings tax?
We are more than at ease with the arrangements we have made with the European Union because we were very eager to make sure that Switzerland, for instance, would not be treated better than Luxembourg or other European financial centres.
We made sure that this point was respected in the arrangements between the EU and Switzerland.
Now we know exactly what will come and exactly that we will have no competitive disadvantage as regards Switzerland.
The arrangements we have concluded are watertight. Nothing will happen in Luxembourg that will not happen in parallel in Switzerland.
What was Luxembourg's role in the recent defence summit with France, Germany and Belgium?
I went to the summit not because I could add to credibility to this initiative by bringing in the military forces of Luxembourg.
I did it for political reasons.
I have to be sure that this European defence identity is not directed against Nato or the US.
I believe that there is no other way than a close relationship between the EU and the US and Canada in Nato when it comes to common security.
Whenever a deeper Europe is considered, Luxembourg is there at the very first moment. We are not a country that can jump on the train when the train is already going.
We have to be there when the train is starting.