The state election in Rhineland-Palatinate on Sunday is observed nationwide. What hardly anyone outside of the federal state knows: A small state is a big factor there. Luxembourg, probably the richest country in the world in terms of per capita domestic product. 180,000 employees subject to social security contributions live in Trier and around the oldest German city, 40,000 of whom commute to the Grand Duchy, which has become rich through the financial industry. Such a flow of workers is probably unique in Germany.

There is more money in Luxembourg – and yet Germany also benefits

“Of course, on the German side we are losing a lot of skilled workers that we have trained in our companies. But the bottom line is that we see a big plus,” says Matthias Schmitt, chief economist at IKH Trier. “The 40,000 cross-border commuters spend a large part of their income back in Rhineland-Palatinate, where they don’t move: the property prices in Luxembourg are far too high.”

And he continues: “The border region also benefits in retail and in restaurants from wealthy Luxembourgers who earn significantly more than Germans because they pay lower taxes and social security contributions. In Luxembourg, buses and trains are even free.”

Less taxes, fewer social security contributions and more pensions

The company Dawen Holzbau from Saarburg is based just over six kilometers behind the border with Luxembourg. The classic medium-sized company feels the imbalance in the basic economic conditions very much, says managing director Holger Rieth. The business IT specialist runs the company with 42 employees together with the carpenter Jörg Dawen: “We have a lot of cross-border commuters in the region, the reason is clear. The people from Rhineland-Palatinate who work in Luxembourg have almost 500 euros more in their pockets.

You pay 39 percent less social security contributions and 28 percent less income tax. You also acquire significantly higher pension entitlements. My wife worked in Luxembourg for 35 years as a nurse in the operating room. At the age of 57, after 40 years of work, she is now entitled to a pension This is not possible in Germany were.”

Commuters use German infrastructure but pay their taxes elsewhere

His company, says Holger Rieth, is located in the Trier-Saarburg district, which ranks 396th out of 401 districts and independent cities in Germany in terms of gross domestic product. “Good skilled workers often go to Luxembourg because they earn significantly more net there. But many stay in Rhineland-Palatinate. The only problem for them is usually the long traffic jams at the border: an hour’s traffic jam in the morning, often the same in the evening. They also use the German infrastructure such as daycare centers and schools, taxes are paid in Luxembourg.

Rieth says: “The competition is unfair. I know some companies that are moving their location to Luxembourg. German entrepreneurs in the border region are simply disadvantaged compared to their neighbors.”

Luxembourgers also ensure prosperity in Rhineland-Palatinate

But there are also advantages due to the many cross-border commuters, says Holger Reith: “They bring much greater purchasing power back to Rhineland-Palatinate. And land is significantly cheaper here. Some Luxembourgers who sell their house for millions can buy new properties in Germany much cheaper and settle here, which also stimulates our regional economy. There are new development areas in Rhineland-Palatinate where you see a lot of yellow license plates from Luxembourg. So you can do the Luxembourgers Under no circumstances should employees be put in the wrong light, they also ensure prosperity and the economy in Rhineland-Palatinate.”

Entrepreneurs have it easier in Luxembourg

For German companies, many of which are considering setting up a branch in Luxembourg, this would be worthwhile for some reasons despite the high rents, says Holger Rieth: “Employers and employees pay fewer social costs there, that’s a win-win situation. Innovations are quickly directly supported by up to 80 percent in Luxembourg, We first have to laboriously get this reimbursed through corporate tax in Germany. Luxembourg is an important sales market for us: we sell transformer stations, for example. Politicians must find an answer to the inequality in the framework conditions in order to enable economic growth again in the region.”

Prime Minister Schweitzer sees the advantages of commuters

Is it a blessing or a curse that there are so many wealthy commuters? When asked by FOCUS online, Prime Minister Alexander Schweitzer (SPD) primarily sees advantages: “Luxembourg is not a ‘little neighbor’, but a central engine for growth and innovation in our region. Many companies in Rhineland-Palatinate benefit directly or indirectly from Luxembourg’s economic dynamism and vice versa.

Schweitzer says: “The fact that many people live on this side of the border and work on the other side and vice versa is a blessing for both sides and for a highly attractive job market. This close integration strengthens the common economic area and is a prime example of Europe in action. What is crucial is that commuters are bridge builders between our countries.”

CDU man Schnieder wants pragmatic solutions

Schweitzer would like to abolish border controls to prevent illegal migration: “Permanent border controls From Rhineland-Palatinate’s point of view, they are harmful for the economy, for commuters, craftsmen, economic flows and they are harmful for the European idea. I think I am closer to Helmut Kohl than Interior Minister Dobrindt on this issue.”

And how does Gordon Schnieder, the CDU’s leading candidate in the state elections, see the situation at the border? “For me, this is a trade-off between internal security and functioning commuter traffic. The numbers show: Since September 2024, around 6,500 illegal entries have been detected at the borders of Rhineland-Palatinate and Saarland, 201 smugglers have been arrested and 782 people with outstanding arrest warrants have been arrested. These numbers show: the current border controls are effective. But they only work if they are carried out along all borders – otherwise the smuggling routes will shift. That’s why stop “I am currently committed to the border controls to Luxembourg. At the same time, I support pragmatic solutions such as fast lanes to relieve commuter traffic.”