7 March 2003

Christian Democrats threaten to pull out of ruling coalition (Vårt Land) 

Valgerd Svarstad Haugland, chairwoman of the Christian Democratic Party, has put her party’s participation in the ruling coalition on the line in an effort to secure more money for the local government sector. “Our continued participation in the Government depends on whether we can achieve adequate local government funding,” said Ms Svarstad Haugland in an interview with Vårt Land. Three days before Government ministers are due to meet at Jevnaker to prepare next year’s national budget, Ms Svarstad Haugland has made it clear that the Christian Democratic Party is staking its all on getting more cash for the country’s local authorities. “I do not want to name a figure, but it must be a significant increase on what we have today,” she said.

The tax cuts we were promised for next year are about to evaporate as a result of the economic downturn. Finance Minister Per-Kristian Foss admits that tax cuts could be smaller than anticipated. If so, the aim is to make up for it in 2005. Mr Foss will be obliged to tighten the revised national budget this spring by NOK 2 billion. Yet despite the drop in revenues, Christian Democrats are demanding additional millions for the local government sector.

”The Progress Party cannot run away from its responsibility to help maintain a sensible budgetary framework when the revised national budget is adopted this spring,” said Prime Minister Kjell Magne Bondevik. Progress Party chairman Carl I. Hagen said in yesterday’s Aftenposten that next time, the Government will have to go to the Labour Party for support over the budget because the Progress Party’s economic policies and position with regard to the budget framework are further away from the Government’s line than the Labour Party’s is. The PM admits that this spring’s round of budget negotiations in the Storting look like being difficult. “The Storting has voted through two major additions to the budget at a time when revenues are beginning to fall. It will be hard to reconcile these two factors,” he said.

There will be no juicy tax cuts next year. In the political manifesto agreed by the coalition parties before they took office, the Government promised NOK 31 billion in tax cuts in the period to 2005. NOK 12 billion of that remains outstanding. The 2004 national budget leaves no room for generosity to the taxpayers. This weekend government ministers will meet for a budget conference. “The Government will fall apart if the Conservatives issue an ultimatum. Promises of tax cuts are no more sacred than other promises,” said a source inside the Christian Democratic Party.

This spring, Egil Myklebust could be ousted from his powerful position as chairman of Norsk Hydro and SAS. The question of whether to sack Mr Myklebust has already been discussed informally by the cabinet. “I hope and trust that he will be replaced,” said Ivar Kristiansen (Con), secretary to the Storting’s Business and Industry Committee. Trade and Industry Minister Ansgar Gabrielsen will shortly embark on his annual appraisal of the performance turned in by the board members of companies in which the state has a major shareholding. By the end of April, Mr Gabrielsen will have decided who will have to go and who should continue to represent the state on those companies’ boards.

Last year, Knut N. Kjær, head of the Government Petroleum Fund, received a 16 per cent pay rise. In 2001 his salary jumped by 42 per cent. This means that in the past two years the Norwegian Central Bank has given its oil boss a pay hike of 65 per cent. The Bank says that this was necessary to give Mr Kjær the ‘right’ salary. Last year’s pay rise lifted Mr Kjær’s salary from around NOK 1.6 million in 2001 to some NOK 1.8 million last year. The 2002 rise was published along with the Petroleum Fund’s annual report on Monday. Central Bank Governor Svein Gjedrem has repeatedly underlined that generous wage rises are the reason that interest rates were increased last summer, in an effort to keep inflation at its 2.5 per cent target over time. The average pay rise for all employees last year was 5.5 per cent.

One week after the Storting promised financial assistance for energy-saving measures to all those who applied for it, 31,800 applications have flooded in. The politicians set aside NOK 50 million. Nine days before the deadline for applications, the promise will cost at least NOK 150 million. “All those who apply before the deadline and meet the criteria set for support, will receive it. That is what the Storting has decided,” Petroleum and Energy Minister Einar Steensnæs told the Newspapers’ News Agency (ANB). Earlier this winter, he said that he wanted to be flexible and spoke roundly of a figure somewhere between NOK 50 million and NOK 100 million. Now he may have to increase that sum many times.

Steinar Stokke, chief executive of Helse Sør, the regional health authority for the southern counties, asked the Ear, Nose and Throat departments of the hospitals in his region to change patient diagnosis statistics so that the hospitals would be entitled to millions of kroner in extra cash. This is because state funding for some illnesses is larger than for others. A houseman at the Norwegian National Hospital developed the scheme for changing diagnosis codes, for which he demanded 10 per cent of the hospitals’ revenue increase as commission. The Ear, Nose and Throat department at the Norwegian National Hospital was the only one in the region to accept the offer. The others turned it down.

The EFTA Surveillance Authority (ESA) wants to abolish the Norwegian practice of requiring liability insurance for pharmaceutical products. The insurance secures compensation for patients who suffer injury as a result of medication. The ESA has asked Norwegian insurance companies to stop cooperating in the provision of liability insurance for all Norwegian pharmaceutical manufacturers and importers. If it does not, the ESA has warned that it will lodge an official complaint, alleging the scheme breaches the EU’s competition rules. According to Norwegian legislation regulating product liability, all manufacturers and importers of pharmaceutical products are obliged to take out joint liability insurance cover.

The Banking, Insurance and Securities Commission has attacked the operating practices of a number of top auditors employed by the country’s largest auditing firms. The Commission says it has uncovered several instances where auditors have not been sufficiently independent in relation to their biggest clients. The Commission has warned that it will issue a serious rebuke or even impose sanctions against eight named senior auditors. Several of these auditors have responded by seeking the advice of their lawyers. The Commission’s final verdict will be published at the end of March.

The value of the Norwegian krone in the currency market fell sharply yesterday. It has not been this weak since last February. The Norwegian Central Bank’s cut in interest rates has made the Norwegian krone less popular among foreign investors.
(Aftenposten)




A number of economists believe that speculation against the Norwegian krone could be behind Thursday’s sharp fall in the Norwegian exchange rate. Knut Anton Mork, chief economist at Handelsbanken, feels the situation is reminiscent of the major fluctuations in the exchange rate seen in 1998. At that time investors bought up interest-bearing securities, while at the same time selling their holdings of Norwegian kroner. This forced down the exchange rate so much that the Norwegian Central Bank was forced to raise interest rates to halt the collapse in the value of the Norwegian krone.
(NTB)




Telenor’s newly elected chairman Thorleif Enger says that in future the company will probably concentrate more on consolidating its position and improving its profitability.
(NTB)




Investments by the Norwegian oil industry in exploratory operations were lower in 2002 than at any time since Statistics Norway started recording the figures 18 years ago. NOK 4.5 billion was invested last year in exploratory oil and gas operations, a drop of 35 per cent compared with the year before.
(dn.no)




According to political science professors Thomas Chr. Wyller and Trond Nordby, Norway may have to abolish the monarchy in its present form if the country joins the EU and supports the appointment of a future EU president.
(Aftenposten)




According to the Norwegian Gaming Board, a total of NOK 29.6 billion was spent in Norway on games of chance last year. This is an increase of 32 per cent compared with the year before.
(tv2.no)




The Labour Party and the Socialist Left Party both want to build a new town hall in Tromsø to the tune of NOK 500 million. At the same time, they do not have the money to spend on necessary school buildings.
(Dagbladet)




Claus Helberg, mountain guide and one of Norway’s most highly decorated war heroes, died yesterday. On 28 February 1943 he and nine other young men took part in the dramatic and legendary attack on the heavy water plant in Rjukan, Telemark. The sabotage action put a stop to Hitler’s plans to build an atom bomb, and was crucial to the outcome of the second world war.
(Dagbladet)




In the past few days, large parts of southern Norway have suffered record levels of precipitation. Rain and sleet caused havoc on the roads and led to numerous accidents. From Wednesday to Thursday almost 110 mm of freezing rain fell on the town of Mandal.
(Aftenposten)

Senior executives have provoked the anger of the Government, the Norwegian Confederation of Trade Unions (LO) and the man in the street by accepting sky-high pay rises and bonuses. We now risk the total collapse of any willingness to show moderation in this spring’s national pay negotiations. The plan is for employers, unions and the Government to work together to ensure a modest pay settlement for all, in order to strengthen the Norwegian economy, boost exports and thereby save jobs. The saboteurs are the fattest cats in the country’s biggest companies. Last year’s bonus figures show that senior executives are about to leave the rest of the labour force far behind. The egalitarian spirit, which in lean times can help to put a damper on rising costs, has been shot to pieces by greedy executives who have shaved their sense of social responsibility to the bone. Trade and Industry Minister Ansgar Gabrielsen is threatening to exercise his rights as major shareholder when state-owned companies hold their annual general meetings this spring. And a good thing too. It now remains to be seen whether the man can do more than just jaw. As Ansgar says: it must be crystal clear.