12 March 2003

Call for public works and tax cuts (Dagens Næringsliv)

Nils Terje Furunes, a senior economist at Gjensidige Nor, is calling for the Government to spend an additional NOK 5 billion on public works and tax cuts. He believes rising unemployment requires a much more active response from legislators. Today, Prime Minister Kjell Magne Bondevik has called Labour leader Jens Stoltenberg and Progress Party chairman Carl I. Hagen to an emergency meeting to discuss the serious situation in the labour market. The Government’s critics have now received support from a group of senior economists. Mr Furunes and two other economists believe the Government, and Finance Minister Per-Kristian Foss in particular, is not taking the sharp rise in unemployment seriously enough – both in terms of the increase we have already seen and that which is to come. Nor do they think the Norwegian Central Bank, the Labour Party nor many of the banking industry’s economists are aware of how serious the situation is.

Haggling over the bill (Dagbladet)

The party is over for the Norwegian economy. Now the country’s top politicians are haggling over who should pay the bill. “Fight over the bill? I have no problem with the bill. I for one am ready to spend more of the country’s oil wealth,” said Carl I. Hagen in a televised debate on Tuesday. For its part, the Government believes that the party is now over. After seven good years come seven lean ones. Belts must now be tightened and people must show moderation and temperance, according to Prime Minister Kjell Magne Bondevik, Finance Minister Per-Kristian Foss and top-notch economists, while Labour leader Jens Stoltenberg is partly in agreement.

Labour leader calls for Norwegian support for France (Dagsavisen)

Labour leader Jens Stoltenberg believes Norway should speak up in the UN and give its backing to a French Security Council veto. The centre-left bloc in Norwegian politics is now united on the Iraq issue. Mr Stoltenberg says it would be right of France and Russia to veto a proposal by the USA and the UK which opens the way for an invasion of Iraq. “The weapons inspectors must be given the opportunity to carry on working for as long as it is meaningful to do so. At the same time, weapons inspections cannot go on indefinitely,” said Mr Stoltenberg. Kristin Halvorsen, leader of the Socialist Left Party, also wants Norway to stand firmly behind France and Russia. Though Valgerd Svarstad Haugland, chairwoman of the Christian Democratic Party, refused to comment on the possibility of a French or Russian veto in the Security Council, she did make it clear that if a resolution proposed by the USA or the UK was defeated or vetoed in the Security Council, she strongly opposed a US attack on Iraq without a UN mandate. The Progress Party is the only Norwegian political party which has clearly voiced its preference for the USA’s line rather than that taken by France, Germany and Russia.

Norway could be left with no EEA Agreement (Aftenposten)

After two months there is still no progress in the negotiations to extend the EEA Agreement to cover the new EU member states. If agreement is not reached before Easter, Norway could be left without a working EEA Agreement from 1 May 2004. The hope that the EEA Agreement can be extended simultaneously with the accession of the EU’s new member states now hangs in the balance. If the EEA negotiators do not reach agreement by 16 April, the EU cannot guarantee that a revised EEA Agreement will be valid when the EU expands its membership on 1 May 2004. If that were to happen, it would cause major problems for Norwegian business and industry, particularly the fishing industry.

Interest rates threatened by weaker krone (Aftenposten)

The Norwegian Central Bank’s own calculations show that the fall in the Norwegian exchange rate is threatening the possibility of further interest rate cuts. Since the Bank presented its inflation report on Wednesday last week, the value of the Norwegian krone against the euro has already fallen by 2 per cent. This means more expensive imports, which will push up the Norwegian inflation rate and reduce the chance of additional interest rates cuts.

Worth Noting

  • Development Assistance Minister Hilde Frafjord Johnson has spent NOK 6 million on a PR campaign that has been largely unsuccessful. Ms Frafjord Johnson wanted to make the Norwegian people more knowledgeable about foreign aid issues in the 50th anniversary year of the start of Norwegian state-funded development assistance. Instead, the public’s level of knowledge has fallen slightly while the campaign has been running.

  • A significant majority of people want a ban on keeping firearms at home, and believe that all firearms should be held for safekeeping by city or rural police departments.

  • Irate cod fishermen who are prevented from further fishing because catch quotas have already been met blockaded the harbour at Solvær, Lofoten, yesterday evening. Fisheries Minister Svein Ludvigsen condemned the action. “We have no tradition for illegal protest actions paying off, and it will not happen this time either,” he said.

  • Airline industry analysts are forecasting a crash landing for SAS in the first quarter. “According to my latest calculations, SAS will make a pre-tax loss of SEK 1 billion in the first quarter. Passengers are staying away, and those that do fly with SAS are paying less and less for their tickets,” said airline analyst Preben Rasch-Olsen.
    (Dagens Næringsliv)

  • People in Norway are reading more weekly magazines than ever before, and celebrity news is winning the readership battle. Her og Nå has boosted its readership by 100,000 in the past six months, while Se og Hør’s growth continues apace.
    (Dagens Næringsliv)

Today’s comment from Dagbladet

It is just a matter of time before Kjell Magne Bondevik and Carl I. Hagen develop a common interest – the resignation of the Bondevik-led minority coalition government. The Government’s budget conference at Thorbjørnsrud in Jevnaker ended yesterday. We do not know what was decided there, but the start of the conference was more interesting than the result. Just before the ruling coalition set off for the conference venue in Jevnaker, the Christian Democratic Party leader, Valgerd Svarstad Haugland, threatened to pull out of the Government if the party did not win support for its demand for more local authority cash. Valgerd’s threat was not aimed at the opposition in the Storting, but at her cabinet colleagues from the Conservative Party. It is not the first time the Christian Democrats have said it might be impossible for them to remain in the Government, but there is a limit to how many times a party can act in this way. When was the last time we heard Valgerd or any other Christian Democrat speak with enthusiasm about the ruling coalition, or express satisfaction over the issues the party has succeeded in pushing through? When Valgerd is upset, sad and sees only problems, she cannot expect the voters to be particularly upbeat either.