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Luxembourg’s outgoing Prime Minister Xavier Bettel announced on Wednesday evening that his liberal Democratic Party (DP) had reached an agreement with the center-right Christian Social People’s Party (CSV) to form a government.

The 50-year-old Bettel, who was rumored to be gunning for a top job in Brussels after nearly a decade in power, will remain in government as foreign minister and deputy prime minister, according to local media reports.

Luc Frieden, the 60-year-old CSV leader, will head the new government as prime minister.

A former finance minister and president of the Brussels-based business lobby Eurochambres, Frieden led CSV to a comfortable victory in the latest general elections in October, securing 21 out of 60 parliamentary seats.

Meanwhile, the outgoing coalition — led by Bettel’s DP together with the Greens and the Socialists — won only 29 seats, short of a majority.

Under the new coalition agreement, Bettel’s liberal DP will hold seven ministerial positions while CSV has eight — including key portfolios such as interior, justice and finance.

The new government will be sworn in on Friday.

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