The European Stability Mechanism, the eurozone's €500 billion crisis backstop based in Luxembourg, has not lent to a country since Greece in 2018. Its managing director, Pierre Gramegna, is now floating new missions — including defence credit lines — even as a treaty reform to give the fund a banking-union role remains blocked by Italy.
Luxembourg's real GDP was unchanged quarter-on-quarter in the first three months of 2026 and up 1.6% on the year, STATEC said, as the euro area as a whole shrank by 0.2%. Manufacturing and financial services dragged on activity while investment and public spending held it up, and STATEC has already trimmed its 2026 growth forecast.
Luxembourg's seasonally adjusted unemployment rate slipped to 6.2% at the end of May 2026 and employers declared more vacancies, even as registered resident jobseekers rose 6.5% year-on-year, ADEM figures show — a mixed picture against a flat eurozone labour market.