Bettel denies government responsibility for closure of Caritas following embezzlement scandal

Minister for Development Cooperation and Humanitarian Affairs Xavier Bettel (DP) told parliament on Wednesday that it was not the government’s fault that the international arm of Caritas had to close down last year.

In the wake of a €61 million embezzlement scandal at Luxembourg charity Caritas, a successor organisation (Hëllef um Terrain – HUT) was set up to continue the NGO’s work in the Grand Duchy. International activities of Caritas were dropped, however, leaving 100 staff in countries like Laos and Sudan faced with losing their jobs.

It was possible to finalise several co-financed Caritas international projects, Bettel said, with activities on some projects transferred to other organisations.

The cooperation ministry “had nothing to do with whether Caritas international continued to exist or not: whether they continue to exist is the sole decision of these organisations,” the minister told the Chamber of Deputies during a speech in parliament on Wednesday.

He refuted statements made by a special committee in parliament analysing the Caritas case in recent weeks that suggested Bettel’s ministry did not want to maintain the financial viability of Caritas’ political communication department. This was a “misunderstanding”, said Bettel.

NGOs suffer “loss of trust” after Caritas scandal

The Caritas scandal has had a huge impact on people’s loss of trust in NGOs and that will require looking at how certain procedures can be improved., Bettel said. “But it’s not about fundamentally changing the rules,” he said One example is that NGOs will not be able to use subsidies or cost reimbursements as collateral guarantees for bank loans in future. “This was already implicitly clear before, but now it is explicit,” he added.

Whether Caritas international continued to exist or not had nothing to do with the government, said Xavier Bettel © Photo credit: Christophe Olinger

NGOs account for 15% of all cooperation aid. In 2024, the ministry co-financed 91 projects via NGOs.

Luxembourg NGOS are currently working on a framework that will enable them to raise awareness and train more people for the field of development cooperation. Preparatory work began in 2024 and 2025 will be a transition year before the framework is finalised by 2026, Bettel said.

He also announced that a “Maison des ONG” (House of NGOs) with offices, exhibition spaces and shops would be created to strengthen cooperation.

Luxembourg withdraws from Sahel zone after coups

In general, Luxembourg has once again met a target of spending 1% of its gross national income (GNI) in the area of development work, which corresponds to around €551 million. of that total, 72% went to bilateral aid and 28% to multilateral aid.

Humanitarian aid represents around 17% of the bilateral aid budget, the equivalent of €96 million, most of which goes to the Middle East, the Sahel region and Ukraine.

Bettel had previously announced that Luxembourg would not extend its development cooperation projects with Mali, Burkina Faso and Niger after the current programmes expire.

Due to various coups d’état in the Sahel region, cooperation with these countries is no longer possible, Bettel said, adding taht funds would be orientated towards values that “no longer exist in the central Sahel at the moment.” The precarious security situation was also a reason for cancelling cooperation.

Bettel regretted the move because the partnership with the countries had lasted for more than 30 years and they would continue to need support. “We also have no interest in completely ceding this terrain to geopolitical competitors such as Russia,” he said.

In search of new cooperation partners

It remains unclear whether Luxembourg will be able to reach an agreement with rulers in Senegal. The government is finding it difficult “to talk about human rights and the protection of minorities in society,” Bettel explained.

Bettel had a “difficult conversation” with Senegalese President Bassirou Diomaye Faye at the UN General Assembly in New York last year. Senegal would rather do without Luxembourg’s aid than “engage in a regular dialogue on the development of the human rights situation in the country,” Bettel said about the outcome of that conversation.

Xavier Bettel is said to have had a “difficult conversation” with Senegalese President Bassirou Diomaye Faye at the UN General Assembly last year.  © Photo credit: SIP

Luxembourg is currently looking for new cooperation partners, and Africa is the priority. It is too early to reveal which countries the government has in its sights, Bettel said. However, he wants to “take a pragmatic approach” and look for partners in regions where Luxembourg is already active, such as Central America and South-East Asia as well as southern and eastern Africa.

By the end of the legislative period, the government wants to have reorganised its network of bilateral cooperation relationships.

Europe cannot cope with the lack of US support

In general, these are difficult times for development aid – especially since Donald Trump has been back in the White House, Bettel said. Trump has closed the American development aid agency USAID and the US has left the World Health Organization (WHO).

In an executive order signed at the start of February, Trump withdrew from the UN Human Rights Council and the main UN relief agency for Palestinians (UNRWA), and said the US would review involvement in the United Nations Educational, Scientific and Cultural Organization (Unesco).

“Europe and the rest of the global community cannot replace the budget overnight,” he said. These organisations must now focus on “becoming more efficient and implementing reforms that are long overdue.”

Luxembourg continues to support the World Health Organization, Bettel said. In December, it entered into a new strategic partnership for the period covering 2025 to 2028, with the Grand Duchy providing the WHO with €46.5 million.

(This article was first published by Luxemburger Wort. Translation and editing by Duncan Roberts)