Luxembourg parties eye coalition without Juncker

Europe’s longest-serving leader Jean-Claude Juncker risked losing power in Luxembourg to a coalition of Liberals, Socialists and Greens on Monday, despite taking the largest share of the vote in a parliamentary election.

The heads of the Liberal and Socialist parties said a day after the vote they would open talks with the Green party, a move that could see Juncker’s centre-right Christian Social People’s party (CSV) ousted.

The 40-year-old head of the Liberal Party, Luxembourg city mayor Xavier Bettel, told journalists he had been given a “mandate” to open talks on forming an unprecedented coalition of the three parties.

“We need different policies to pull the country out of crisis,” he said.

Formal negotiations between the three parties, which together have 32 seats, will begin on Tuesday afternoon.

Veteran eurozone dealmaker Juncker lost three seats in the 60-member parliament on Sunday, but had been widely expected to form a new government that would take him into a remarkable third decade in power. He has already been prime minister for 18 years.

The election had been brought forward by seven months after the discovery of misconduct in Luxembourg’s pint-sized secret services.

The 58-year-old Juncker handed his resignation to Grand Duke Henri, the head of the European Union’s wealthiest country per capita, on Monday but remains caretaker prime minister.

The head of state will hold talks with the main party leaders on Tuesday.

Allies in the conservative European People’s Party (EPP), that includes German Chancellor Angela Merkel, confidently congratulated Juncker after his party took 23 seats.

“The people of Luxembourg have renewed their trust in Prime Minister Juncker and have given him the mandate to lead the country for another term,” said the grouping’s leader in the European Parliament, Joseph Daul.

Juncker’s party has won every election bar one since it was established in 1944.

The CSV secured 33.7 percent of the vote, down more than four percentage points on 2009 polls.

Official figures showed the Socialists in second place on 20.3 percent but the Liberals were widely seen as the big winners with a sharply improved 18.2 percent.

Each of these parties won 13 seats, with the Greens taking six, down one.

Juncker congratulated Bettel’s party on its score, but insisted: “We claim priority”.

On the campaign trail, Juncker said he would be prepared to govern in a two-way coalition with either the Socialists or the Liberals.

Juncker’s former coalition with the Socialist party splintered over misdemeanours from illegal phone tapping to dodgy dealing in luxury cars.

However, Socialist leader and outgoing economy minister Etienne Schneider, contesting his first general election in charge of his party, failed to convince.

An editorial in the Quotidien daily said he had not made the breakthrough the left had hoped for amid unemployment rising up to nearly seven percent.

Juncker, who has spent nearly half his life in government, told AFP earlier he did not “rule out” the possibility that a coalition could be formed against him in the AAA-rated, high-earning and low-tax haven wedged between Germany, France and Belgium.