Luxembourg's Prime Minister Xavier Bettel gestures as he speaks to the media before the extraordinary EU leaders summit to finalise and formalise the Brexit agreement in Brussels, Belgium November 25, 2018. REUTERS/Yves Herman

LUXEMBOURG (Reuters) - Luxembourg Prime Minister Xavier Bettel was sworn in for a second term on Wednesday after his liberal-led coalition secured a narrow victory in an election in October.

Bettel’s government plans a stronger environmental drive, with some free public transport from 2020, to invest more in public services and to legalize recreational use of cannabis.

The foreign policy of the European Union’s wealthiest but second smallest state is unlikely to change much, with Jean Asselborn keeping his post as foreign minister while Pierre Gramegna remains finance minister in the new administration.

Bettel’s Democratic Party, the Socialist Workers Party (LSAP) and the Greens, who have together ruled the Grand Duchy since 2013 signed a new accord until 2023 on Monday and settled ministerial posts on Tuesday.

The Christian Social People’s Party (CSV) - which was led for 19 years by EU chief executive Jean-Claude Juncker - remained the largest party in parliament, but lost seats, as did the LSAP and the Democratic Party.

However, because the Greens gained, the three parties in government have 31 seats in the 60-seat chamber.