Solidarity is not a one-way street
Luxembourg’s Minister of Finance Luc Frieden strongly believes that the Alternative Investment Fund Managers (AIFM) Directive is a new opportunity for Europe and Luxembourg. At times when people look for stability, it is important, according to him, that we have a regulated alternative investment market for the first time ever. At the Alfi conference in Luxembourg he also talked about the crisis of the eurozone and the ingredients necessary to put member countries back on track.
When he woke up in the morning thinking about his speech at the Alfi conference, minister Frieden didn’t know yet what tone to go for: an optimistic or a rather pessimistic one. Finally, he opted for a realistic tone and got into the swing of it straight away. “We are confronted with a crisis of trust and stability in both the financial institutions and the states. Within the eurozone we have to make sure that we manage to put countries that are in serious financial difficulties back on track.
In the case of Greece we know what has to be done, but Greece also has to realise that solidarity is not a one-way street. It is not about giving money to a country, it is giving them financial assistance in the interest of stabilising the eurozone”.
At the same time, he launched a vibrant call to all political parties of this South-European country to accept the conditions set by the European Union.
Greece, though, is not the only Eurozone member on Frieden’s radar screen: “While there is no reason to worry about Portugal and Ireland because their governments are serious about the reforms needed to put them back on track, I hope that the new government in Spain, which will be in office by mid-December, will do everything that has to be done to tackle the debt crisis. Though there is no easy way out of this sovereign debt and banking crisis, we have to bear in mind that sound public finances are the key to a competitive eurozone”.
No mercy for rule breakers
Therefore minister Frieden is in favour of serious sanctions against countries that do not respect debt and deficit ceilings in the growth and stability pact signed by European countries. And he goes even further: “We have to seriously think about excluding countries from the eurozone which do not comply with rules of the monetary union for an extended period of time.” In this context, he adds that in the short and medium term it is not realistic to get a political union.
These notions of trust and stability are also key elements when it comes to Luxembourg being one of the largest financial services centres in Europe, certainly the largest in the Eurozone with regard to investment funds and wealth management. Frieden confirms the determination of the Luxembourg government to further enhance, develop and consolidate financial services.
“It has grown a lot in the past ten years despite many people speculating for years that it would shrink. On a daily basis, the government and professional organisations like Alfi work closely together to have the best framework in place to ensure that investment funds, wealth management and insurance products further develop in Luxembourg,” he says.
Trust me, I can help you
As a former lawyer, Mr Frieden knows that legal certainty and visibility are extremely important for financial services to develop. “This is what investors have always found in Luxembourg and will continue to find in Luxembourg,” the minister promises.
He believes that the Alternative Investment Fund Managers (AIFM) Directive is a new opportunity for Europe and for Luxembourg, “it will be the first regulated alternative investment market in the world, at a time when people are looking for stability, and Luxembourg will play a key role in this market".
It is therefore his intention that Luxembourg be amongst the first countries to implement the directive into law, like it has already been the case with investment funds in the past. Furthermore, investors and clients appreciate the stability of Luxembourg, where laws don’t change overnight or after every general election, Frieden concludes. CW