14 May 2003

Spending more from the Petroleum Fund (Dagsavisen)

Prime Minister Kjell Magne Bondevik is slackening the reins a little, and is allocating around three billion kroner extra under the revised national budget. He is proposing to use as much of the Petroleum Fund revenues as he can without making further interest rate reductions less likely. “Here the Christian Democrats have won out,” admitted a Conservative Party source. Within the party there is concern that the increase in expenditure may exceed wealth creation in Norway, measured in terms of GDP. “We are allocating as much money as we can,” said a source in the Christian Democratic Party. In practice, this means as much money as the Government feels it is possible to spend without undermining its intention of keeping to a tight government budget.

The Bondevik Government has, in reality, abandoned the idea of achieving a budget agreement with Carl I. Hagen and the Progress Party in the Storting. Even though the Government will knock on Progress’s door first, behind closed doors at the Office of the Prime Minister preparations are already being made for steering a zig-zag course from party to party in the Storting. In this way Bondevik can go to Progress for support for some budget items, while Labour will secure him a majority for others, without the Government reaching an overall agreement with any specific party.

There are great expectations of the Government’s revised budget, which is to be presented tomorrow. There is particularly keen interest in the economic situation for the municipalities, and in how the Government intends to prevent municipalities from losing jobs. “The municipalities need an extra 1.3 billion kroner just to maintain basic services and keep up with population growth. They must be given an additional five to six billion to break even after several difficult years. If the municipalities do not receive this sum, they will have to cut down their activities,” said Gunnar Gussgard of the Norwegian Association of Local and Regional Authorities.

The Conservative Party wants to tighten up the rules in order to prevent the opposition parties in the Storting from making expensive decisions that are not covered by the budget. “It is ridiculous that we spend the entire autumn discussing the budget framework, and then in January new proposals are made that have no basis at all in the framework that has been discussed. There is no budget discipline at all. This is why we have to change the system so that additional expenditures are covered,” said Conservative fiscal policy spokesman Jan Tore Sanner. “It is a political problem that the Government has not clarified with its budget partner how the budget is to be followed up throughout the year. The Government has a partner that it cannot count on,” said Labour fiscal policy spokeswoman Hill-Marta Solberg.

The Norwegian authorities have been sitting on the fence since Poland torpedoed the negotiated agreement between the EU Commission, on the one hand, and Norway, Iceland and Liechtenstein, on the other. This was confirmed when Foreign Minister Jan Petersen (Conservative Party) met with the Storting’s EEA Consultative Committee yesterday. Centre Party Chair Åslaug Haga reacts to what she views as Norwegian passivity in the EEA process, and would like to see the political will to ensure a far better solution for the Norwegian fisheries sector. “The Government has done a poor job, and cannot possibly be satisfied with an agreement that is both expensive and unfavourable,” she said. State Secretary Kim Traavik rejects this criticism. He points out that the parties were actually in agreement, and that there are rules for dealing with issues like this.

Italy’s largest brewery, Peroni, may be swallowed up by Carlsberg Breweries, 40 per cent of whose shares are owned by Orkla. In recent years the merry-go-round of new acquisitions in the European brewery sector has been revolving more and more quickly. Now Orkla is joining the merry-go-round. The price of the Italian brewery is NOK five billion. Two weeks ago Orkla and Carlsberg were showing interest in an Austrian brewery, but their competition, Heineken, snapped up this desirable object right in front of their noses when it placed NOK 15 billion on the table. “We can’t just let strategic ambitions determine the price,” said Orkla CEO Finn Jebsen.

“There is a longstanding agreement between Norway, Sweden and Denmark, the Consortium Agreement, that regulates where airplanes are to be registered according to a 2-2-3 distribution plan. This has to do with defence ability. Otherwise there are no guidelines,” said SAS CEO Jørgen Lindegaard. In his view, Norwegian politicians can have no voice in deciding whether Norwegian SAS employees will be fired, or which Norwegian facilities will be closed down.

SAS warns that there will be more cutbacks, and says that the time when national interests were taken into consideration when sharing out jobs is now over. Losses amounting to billions of kroner were made public yesterday. “These enormous losses reveal the deep crisis facing the airline industry today, and show how serious the situation is for SAS. The cutbacks we have already made are not enough, and more are in store. Now the company has to give business considerations priority over national considerations,” said Egil Myklebust, chair of the board at SAS.

The Bondevik Government is rewarding government employees for accepting a zero increase in wages this year. On 1 July the interest rate for mortgages from the Norwegian Public Service Pension Fund will be lowered by 1.5 per cent. The new nominal interest rate will be 5.5 per cent. (Verdens Gang)




New international banking rules will result in lower interest rates for the general public, according to Bjørn Skogstad Aamo, Director of the Banking, Insurance and Securities Commission of Norway. A group at the Commission has been working for some time on the new proposal, which was drawn up by the world’s ten largest industrialised countries in the Basel Committee on Banking Supervision. (Dagbladet)




Labour Chair Jens Stoltenberg says that the Government is about to violate the terms of two agreements. These involve last year’s defence compromise and the pensions settlement. Mr. Stoltenberg is shaking a warning finger at the Bondevik Government and says that the only way a minority government can survive is by following up decisions that it has itself voted for in the Storting. (Aftenposten)




The day before the Government is to present its revised budget, Sverre A. Larsen of the Federation of Norwegian Construction Industry has presented his recipe for how politicians can create over 10 000 new jobs. “There are plans to launch a number of publicly funded projects in 2004 and 2005. Several of these should be initiated this year, while workers are in good supply,” he said. (Dagsavisen)




The opposition parties in the Storting are accusing the Government of increasing the number of poor by cutting down on welfare schemes, and do not regard the measures suggested in the report on poverty as compensation for this. (NTB)




So far this year, it has been decided that 1900 jobs in the Norwegian industrial sector will be moved abroad. There are now plans to get rid of almost 4500 jobs, according to an overview compiled by the Federation of Norwegian Manufacturing Industries. (Nationen)




Now marine researchers can finally confirm what fishermen fear above all else: king crabs are greedily consuming fish roe in their victory march along the coast of Finnmark. The Norwegian Fisherman’s Association regards the preliminary findings of the researchers as very serious. (Dagbladet)




The Labour Party and the Socialist Left Party will support plans to move eight government agencies out of Oslo, if the Government will commit itself to agreeing with them on the political control of each of them. (Aftenposten)




A majority in the Storting is reacting to SAS board chair Egil Myklebust’s statement that national interests will be set aside. “We need a new chair of the board,” said Øystein Djupedal (Socialist Left). (Dagsavisen)




SAS has had losses amounting to 1.88 billion Swedish kroner in the past three months. Today board chair Egil Myklebust will meet with Minister of Trade and Industry Ansgar Gabrielsen to explain why the company’s technical headquarters at Gardermoen will be facing the axe. (Aftenposten)




Trygve Hegnar, editor of the magazine Kapital, is asking politicians to keep their hands off SAS. In his view, the greatest danger facing the company is politicians who are eager to take control. (Dagbladet)




On Norwegian Constitution Day this Saturday, over a quarter of all Norwegians will dress in a national costume, a bunad. Over 25 per cent of all Norwegians who do not own a national costume wish that they did. Eighty per cent of those wearing a bunad are women, but the percentage of men doing so is expected to increase during the next few years. (NTB/Dagsavisen)




Here is the long-term weather forecast we have been waiting for: we will probably have a warmer summer than the average for the past 30 years. This pleasant prognosis applies to most of southern Norway and parts of Nordland. June, July and August promise to be warmer than usual. (Aftenposten)

“A disaster for Gardermoen,” was the reaction of Norwegian employees to the decision of the SAS board to move the company’s technical headquarters to Arlanda. But the next day the real bomb was dropped: losses of 1.88 billion Swedish kroner in the first quarter of the year. It’s one thing that SAS employees are fighting for their jobs, but it’s another thing altogether that the opposition in the Storting is trying to do the impossible. Spearheaded by Carl I. Hagen, the opposition is demanding a written statement from Trade and Industry Minister Ansgar Gabrielsen. They believe that he has not fought hard enough for Norwegian interests, and should have made more active use of the possibilities offered by government ownership. There is every reason to remind the opposition that the Norwegian Government owns only 14 per cent of SAS, and as part-owner it should also be in the Government’s own interests to see that the company remains on its feet. In order to ensure that this is the case, the board and management must place the company’s needs above any political or national considerations. It will not help SAS’s employees if the company goes down the drain with the Norwegian flag at top mast. It is naïve to believe that SAS would benefit from being placed under political control. Instead, politicians should concentrate on what they actually can do something about: the cost level in Norway and the operating parameters for airline traffic in this country.