Country report Luxembourg - Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)
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In part because of the exceptional weight of the financial sector in Luxembourg, the economic and financial crisis caused a large reduction in GDP in 2008-2009. However the economy recovered quickly, with growth of 4% a year in 2009-2011. In the next two year, growth slowed down but picked up again in 2014 and 2015 to well above the EU average. The employment rate remained slightly above 70% of population aged 20-64 over the period, though this was not enough to absorb the increase in the participation rate and unemployment edged up continuously from 2008 on to reach 7% of the labour force in 2015, which, though lower than in most other Member States, is historically high for Luxembourg.
The measures taken to counter the effects of the crisis together with the downturn in economic activity itself led to budget moving into deficit in 2009, though from 2011 on, partly as a result of renewed growth though also because of fiscal consolidation measures, it moved back into surplus again.
Luxembourg is a single NUTS 2 region with GDP per head of nearly 2.5 times the EU average, though it is pushed up by the distorting effects of large-scale inward commuting from neighbouring countries. ERDF funding was allocated to one single OP under the Competitiveness and Employment Objective.
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