Luxembourg is one of the world’s wealthiest countries. It has one of the Eurozone’s highest current account surpluses as a share of GDP, main¬tains a healthy budgetary position, and has the region’s lowest level of public debt.

1. The Common Aspects for
Financial Success in "EU" & the
Expected Future Challenges
Luxembourg
By: Ashraf Afify

2. The World Financial Crisis in 2008
• What Happened in 2008?
Subprime Mortgage
September 15, 2008
Corporate Governance
.
1. Ratings
agencies
2. Bad
economic
assumptio
ns
3. Lehman
Brothers
'bankrupt
cy
4. Easy
credit
conditions
5. NASDAQ
Bubble -
DOT-COM
Bubble
• Reasons for the Crisis
• Global effect: $84 trillion to $173
trillion – 60% of the world total GDP
European Debt Crisis 2012

3. Luxembourg at a Glance
How LUXEMBOURG dealt with 2008 Crisis:
• Massive liquidity injections due to
sudden shortage of liquidity in the
money market and to help stabilize and
boost the economy.
• Lowering interest rates to almost 1% in
mid of 2008.
• Euro area governments have
committed 26% of GDP to supporting
the financial sector
• The fiscal stimulus and asset support.
• On 28 September 2008, Belgium,
Luxembourg and the Netherlands jointly
announced an €11.2bn investment in
the Benelux bank Fortis.
Moody’s/S&P : AAA
Stable Outlook
European Union/Gov.
debt:
81.6% of GDP (2017)
GDP (PPP) % world
GDP: 0.05%

4. Financial Indicators
53.21
60
56.68
61.74
66.33
57.78
58.63
62.4
52
54
56
58
60
62
64
66
68
2010
2011
2012
2013
2014
2015
2016
2017
GDP
GDP
107.014
115.987
104.358
106.185
117.341
108.048
114.998
120.857
102.696
101.797
102.989
90
95
100
105
110
115
120
125
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
GDP Per Capita GDP Per Capita
GDP per Capita, in European Union
37204.61 USD in 2017
4.3
-0.7
-0.7
0.5
0.3
1
1.3
1.4
1.6
1.5
-2
0
2
4
6
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Government Budget
Government Budget
Budget surplus equal to 1.50 % of GPD
2009 Deficit to stimulate the economy
44.1
42.4
44.1
43.3
41.8
41.5
42.1
42.9
40
40.5
41
41.5
42
42.5
43
43.5
44
44.5
2010 2011 2012 2013 2014 2015 2016 2017
Government Spending to GDP
Government
Spending to GDP
42.9 % of GDP
Diversified industrialized nation-banking

5. -5.1
-6.46
-3.99
-5.34
-7.99
-8.71
-8.25
-7.55
-6.14 -5.96
-6.92
-10
-8
-6
-4
-2
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Balance of Trade
Balance of…
EUR 0.60 billion in October 2018 from EUR
0.50 billion in 2017.
4.68%
3.80%
2.27%
2.10%
0.27%
0.48%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2007 2009 2011 2013 2015 2017
Interest Rate
Interest Rate
Investment – Gov. Debt Service– High
House Prices
39
42.1
41.3
43.6 43.6 43.6 43.6
48.78
38
40
42
44
46
48
50
2010 2011 2012 2013 2014 2015 2016 2017
Personal Income Tax Rate
Personal Income Tax
Rate
Linear (Personal
Income Tax Rate)
Pay-As-You-Earn (PAYE) system.
Rate up to 48.78%
•The taxable rental value has been
abolished.
•For house sellers, the government has
reduced the capital gains tax rate from
50% to 25%
•A decrease in corporate tax from 21% to
15% to increase competitiveness.
•EU Standard VAT rate (20%),Highest
Hungary 27%,Lowest Switzerland 8%.

6. Public Debt Indicators
1- Public Debt to GDP: 23% , Save limit 60%.
2- GDP GROWTH RATE & GOVERNMENT DEBT GROWTH RATE
8.40%
-4.40%
2.50% 3.70% 3.90% 1.50%
19.04%
-2.97%
6.63% 17.33%
-15.63%
17.54%
-100%
-50%
0%
50%
100%
2007
2009
2011
2013
2015
2017
Government Debt Growth
Rate
3- Debt Per Capita
51.31
53.904
55.941
58.15
60.271
63.615
8.125
16.157
21.415
26.601
22.04
23.827
0
20
40
60
80
2007 2009 2011 2013 2015 2017
Yearly Avg.
Debt Per Capita
-Luxembourg Yearly Income
Average is (63.615 EUR).
-EU Yearly Income Avg. is(38.800
EUR).
-Debt Per Capita equals (23.827
EUR).
-Percentage 37.4%.
-Save limit 50%.
-lowest rate in 2007 with 15.8%4- Financial Public Capability
15599
16443
18508
20598
22350
24571
14055
16692
18286
20143
21639
23730
10000
15000
20000
25000
2007 2009 2011 2013 2015 2017
Revenues >Expenditure
24.571>23.730
Luxembourg has a great
position in facing problems of
increasing debt and future
debt.
Debt Growth Rate
reached 112.69% to -
1.30% in GDP Growth
Rate,

7. Economic Forecast
Indicators 2017 2018 2019 2020
GDP growth (%) 1,5 3,1 3,0 2,7
Inflation (%) 2,1 2,0 2,0 1,8
Unemployment (%) 5,6 5,3 5,2 5,2
Gross public debt (% of GDP) 23,0 21,4 20,8 20,6
European CommissionStandard & Poor’s Review
• Robust economic growth.
• The stable outlook over the next
two years.
• The ratings could come under
pressure by accelerated assets
valuations.
• Expect real GDP growth to
average 3.3% per year in 2018-
2021.
• Expect the cost of debt to remain
low, at around 0.8% of revenues.
• Growth in financial services
should stay vigorous throughout
the period, in part because some
financial institutions are relocating
European headquarters to
Luxembourg from London
following Brexit, as well as
continued expansion of the
Eurozone.
• Luxembourg's dynamic economy has
been performing better than the euro
area average since the 2009 global
economic recession.
• House prices have kept on rising.
• Continued to pursue its strategy to
diversify the economy, whereas
business investment in R&D is on a
declining trend.
• Expenditure growth is also projected
to rise.
• Sustainable economic growth.