The Prime Minister Jacques Santer had been appointed to be President of the European Commission from 23 January 1995. He resigned on 20 January 1995 as Prime Minister. The Grand Duke received Santer as the outgoing Prime Minister, to thank him for services rendered. The Grand Duke then received Jean-Claude Juncker, the Minister for Finances and Minister for Work. Appointed as Prime Minister, he also retained the portfolios of Finances and Work. Juncker then took his oath of office before the Grand Duke under the terms of article 110 of the Constitution, and immediately took office.
In the European sphere, the government gave priority to questions of employment, tax harmonisation, and the introduction of the single currency. When it came to employment, it advocated the idea that all European countries should enact a minimum wage. In terms of the harmonisation and coordination of fiscal policies, the Luxembourgish authorities were not opposed to a regulation at the level of all European states of the question of the withholding tax. But this had to take account of the interests of all member states. A minimal taxation of capital revenues had to go hand in hand with progress in the area of taxation of businesses. The most spectacular performance of the European Union during this period was certainly the introduction of the euro on 1 January 1999. During the Luxembourgish presidency of the Council of the European Union in 1997, significant advances were achieved in the long process of creating a common currency. In 1996, Luxembourg, along with other member states of the European Union, had concluded the growth and stability pact which was to guarantee the stability of the future single currency. As a NATO member, Luxembourg participated in the search for a solution to the wars in the former Yugoslavia. The Luxembourgish government supported the NATO military intervention in Kosovo, and put in place reception facilities to take in refugees and granted emergency aid of 1 billion Luxembourgish francs for the reconstruction of areas devastated by the conflict.
Economic policy
During the period 1995-1999, Luxembourg experienced strong economic growth. In 1998, this reached 5,7%, while inflation was at its lowest level at 1%. This was the effect of a stability policy which had been made the condition for joining the European economic and monetary union. The expansion also made itself felt in employment. From 1995 to 1998, 29,700 new jobs were created. Nevertheless, the unemployment rate remained relatively high at 3%. If the job market continued to grow at the same rate and the population grew in similar proportion, the Grand-Duchy would have 400,000 workers and 700,000 residents by 2025. This perspective, strongly expressed by the government, justified an ambitious policy of investment in infrastructure. From 1994 to 1998, the Luxembourgish state invested 74,2 billion francs in the economy. The South collector road linked the cities of the mining basin, which continued to suffer from the decline of the steel industry, while the urban motorway of the south facilitated access to the capital. The Motorway of the North would open up the Oesling. The motorway of the Saar, when finished, would complete the road circle of the Greater Region. As the road network could not absorb the mass of everyday travellers, the government also prepared a traffic plan which integrated buses, trams and railways, the BTB. Just like the BTB, the TGV-Est was of great importance to maintain the country's attractiveness as a business location. Luxembourg also pledged to participate in the cost of the construction of the Paris-Luxembourg railway line up to 4,6 billion francs. Apart from the investments in infrastructure, the continuation of the development of the Kirchberg plateau represented a large burden on the State's budget. These works represented the government's desire to turn the zone that was initially dedicated to European institutions into a quarter of Luxembourg City in its own right, which would include residential, commercial and leisure areas. A central point of the development was the transformation of the old motorway into an urban boulevard. The development of the audiovisual sector and the media was a priority. The government continued to support the expansion of SES, which could be considered the jewel of the policy of diversification pursued since the steel crisis. In 1997, the SES operated 11 satellites and Astra channels were received by 70 million viewers. With 2,7 billion francs paid in taxes and licence fees, the SES was the principal contributor towards the Luxembourgish State's finances.
Social policy
In the social sphere, the government continued to develop the idea of the Luxembourgish model. One of its major concerns was to avoid the unemployment situation getting worse. The Tripartite on employment met twice during the legislative period. During the tripartite meeting, the social partners agreed on a policy of wage restraint. It was agreed that pay increases would respect the development of productivity. When it came to pensions, government policy aimed to guarantee the system of the legal pension, its level and its possibilities. The government especially tried to narrow the gap between the retirement and pensions systems of the public and private sectors.
Cultural policy
In 1995, Luxembourg was the European City of Culture. This positioned Luxembourg on the international cultural scene and gave a new impulse to national cultural policy. The government launched a vast programme of construction of museums and cultural institutions, especially the Musée d’art moderne Grand-Duc Jean and the Museum of the Fortress in the ruins of Fort Thüngen, a philharmonic hall on the Place de l’Europe, a Centre Culturel de Rencontre in the buildings of the old Neumünster Abbey. Apart from these projects, the Casino – Forum d’art contemporain pursued its policy of raising awareness of art, started during the cultural year 1995. The "Centre national de littérature" was inaugurated on 13 October 1995. In 1996, the National Museum of Natural History, newly renovated, opened its doors. At the end of the legislative period, the renovation of the National Museum of History and Art was started.
