Security on the outside, security on the inside – why Luxembourg needs both

This text is an AI-generated translation of the original.

The political task is not to choose between defense and housing construction. It is to intelligently connect the two policy areas, the guest author emphasizes.

By Alex Donnersbach

Hardly any political issue is currently being debated as emotionally as the announced increase

in defense spending. Since NATO member states agreed to significantly raise their investments in security, one question is being asked more and more often in Luxembourg: Can we still afford an ambitious housing policy at the same time?

At first glance, this question seems justified. In reality, however, it is misleading. Because it suggests a contradiction that does not exist. It is not about defense or housing construction. It is about defense and housing construction.

Peace and freedom are not a given Russia’s invasion of Ukraine has shown Europe in a painful way that peace and freedom are not a given. For decades, many European states neglected their defense capabilities and relied on others—above all the United States—to ensure our security in an emergency. But those certainties are a thing of the past.

That is why Europe is taking on more responsibility today. Luxembourg is also doing its part. This is not a matter of political taste, but a matter of state responsibility. Because external security is among a state’s most fundamental sovereign tasks. Only those who take responsibility for their own defense preserve their freedom and self-determination. No one else can organize or finance national defense. There are no private investors, no municipalities, and no non-profit organizations that could take on this task. If the state does not act here, no one will. This is precisely where a crucial difference to housing policy lies.

549 million euros for housing policy

Of course, the state also bears great responsibility here. It is investing more than ever before in affordable housing construction. The 2026 budget earmarks 549 million euros for housing policy. 355 million euros alone will flow into the Fonds de Logement—almost eight times as much as ten years ago. By 2029, the state will invest around two billion euros in social and affordable housing construction. Already today, this is financing more than 4,200 affordable homes.

But unlike in national defense, the state is not the only player in housing construction. Public developers such as the Fonds du Logement or the SNHBM make an important contribution. Municipalities are also increasingly getting involved in building affordable homes. At the same time, private developers, cooperatives, and institutional investors are investing in new housing projects. 

Private developers continue to play a key role, as they have so far delivered the vast majority of new housing in Luxembourg—over recent years, around 80 to 90 percent of newly built homes have been the result of private initiatives. To create the urgently needed housing more quickly, it is therefore crucial that the state also mobilizes private investment through targeted financial incentives. Each public euro can thus trigger a multiple of private investment and thereby enable significantly more housing construction than the state could finance on its own.

This is precisely why it is misleading to pit the two policy areas against each other. While defense can be ensured exclusively by the state, responsibility for housing construction is shared across multiple actors. Anyone claiming that every euro spent on defense automatically is missing from housing construction is ignoring this reality.

This text is an AI-generated translation of the original.

Defense as an Opportunity for Luxembourg as a Business Location

There is also another aspect that is often overlooked in the public debate: investments in defense no longer simply disappear abroad. Modern security and defense policy has long since consisted of far more than tanks or ammunition. A significant share of the planned investments flows into infrastructures and technologies with so-called dual-use character. This includes, for example, satellite communications, cybersecurity, or modern telecommunications systems that can be used both militarily and civically.

Infrastructure projects such as modernizing the airport also strengthen defense capabilities while at the same time benefiting the entire population and the economy.

Luxembourg is also deliberately pursuing the goal of generating as much value creation as possible within the country itself. The government has therefore developed a defense industry strategy for the first time. Every euro invested in defense should—wherever possible—also benefit the Luxembourg economy and its employees. New companies are to be established, existing businesses integrated, and innovation promoted. This will create highly qualified jobs, additional tax revenues, and long-term economic growth. It is precisely this economic strength that in turn forms the basis enabling the state to finance extensive investments in housing construction, the welfare state, or education in the first place.

Security and prosperity therefore do not stand in competition with one another. They depend on each other.

A Reliable Housing Policy Creates Social Stability

Equally important, however, is the realization that security means more than military protection. Anyone who cannot find affordable housing or has to spend a large share of their income on rent also feels insecurity. A reliable housing policy creates social stability, gives families future prospects, and strengthens social cohesion.

That is precisely why Luxembourg needs both: a credible security and defense policy as well as a determined housing policy.

Politics must not succumb to the temptation to play the two areas off against each other. Catchy headlines may generate attention in the short term, but they do not solve problems. Responsible politics is characterized by tackling multiple challenges at the same time.

A state that cannot protect its citizens endangers its freedom. A state that loses sight of access to affordable housing endangers social cohesion. Both would be fatal.

The real political task therefore is not to choose between defense and housing construction. It is to link both policy fields intelligently, set priorities correctly, and use the available resources efficiently.

Because security has two dimensions: it protects our freedom externally and creates stability internally. Only a country that guarantees both will remain an attractive business location in the future, a reliable welfare state, and a place where people enjoy living and building their future. That is why the right answer is not “defense or housing construction,” but “defense and housing construction.”

Alex Donnersbach is a CSV MP, Vice President of the Housing Commission, and defense policy spokesperson for the CSV parliamentary group.

* This article was published on July 4 in the "Luxemburger Wort"

https://www.wort.lu/politik/sicherheit-nach-aussen-sicherheit-nach-innen-warum-luxemburg-beides-braucht/158164941.html