26 June 2003


Central bank governor hints at more interest rate cuts (Dagens Næringsliv)

After slashing one whole percentage point of the base rate of interest yesterday, Svein Gjedrem, Governor of the Norwegian Central Bank, has said he is not ruling out further substantial cuts. If employers and employee organizations exercise restraint, the base rate could fall as low as 2-3 per cent. “With prospects like these, there could be grounds for a less stringent monetary policy than the money and currency markets now seem to expect,” said Mr Gjedrem at a press conference after yesterday’s meeting on interest rates. Mr Gjedrem’s comments are a signal that the base rate could drop down to somewhere between 2 and 3 per cent. Yesterday’s signals from the Norwegian Central Bank had an immediate impact on the Norwegian exchange rate, and reduced expectations regarding future market rates.

Stoltenberg prepared to rule alone (Dagsavisen)

Labour leader Jens Stoltenberg has now indicated that the Labour Party could be prepared to form a government by itself in the next parliamentary term. At the same time he has indicated that EU membership will be a key issue in the 2005 general election campaign. Mr Stoltenberg pointed out that he would prefer to have formalized agreements with other parties represented in the Storting, even though the question of EU membership should take centre stage. But Kristin Halvorsen, leader of the Socialist Left Party, has now changed her tune and crushed that hope. “In that case, the Labour Party will have to form a government on its own, and win majority support on an issue by issue basis,” said Mr Stoltenberg in an interview with the Newspapers’ News Agency (ANB). He respects the fact that the Socialist Left Party has said no to a formalized cooperation agreement at this time, but believes that the issue of EU membership should not get in the way of the two parties working together.

Unemployment most important issue (Aftenposten)

Labour leader Jens Stoltenberg sums up the spring’s political battles like this: pensioners and families with small children are the winners; the unemployed, students, the disabled, elderly people in need of nursing care and leasehold property owners are the losers. He has now turned his attention to this autumn’s local elections, in which the key issue will be public service versus market liberalism. The Labour Party’s most important policies will the battle for full employment, a good education and care of the elderly, instead of ‘lower taxes for those who have most already’. Mr Stoltenberg also says that while the drop in interest rates is a good thing, he is unhappy that it has come about because the economy has ground to a halt and unemployment is rising. He gives the Norwegian Confederation of Trade Unions (LO) and the other trades unions most of the credit for the cut in interest rates, because they agreed to moderate wage settlements this year.

Petroleum Fund to pull out of ethical bad boys (Dagbladet)

Last year Finance Minister Per-Kristian Foss said that imposing ethical investment guidelines on the Government Petroleum Fund was out of the question. But yesterday, the impossible suddenly became possible. A panel of experts, tasked with determining the extent to which Norway’s NOK 600 billion Government Petroleum Fund can be managed along socially responsible lines, declared that ‘the state has an moral obligation to introduce ethical standards’. The panel was set up by the Ministry of Finance. Just one year ago – in connection with Dagbladet’s revelations that the Petroleum Fund had invested in companies responsible for gross violations of human rights and environmental destruction – Mr Foss declared that ethical guidelines were out of the question. A few weeks later the Socialist Left Party won the support of the rest of the opposition, and finally the ruling coalition parties themselves, for the establishment of a panel of experts who would consider whether it was possible for other values, in addition to profit, to be taken into consideration when selecting companies to invest in.

Immigrants behind six out of ten robberies in Oslo (Aftenposten)

As many as 59 per cent of all those charged with robbery in Oslo last year came originally from a non-western country, according to figures published by the Oslo Police District. “International studies show that ethnic background is not the explanation, but variables such as household income, housing standard, education and whether the person is in employment or not,” said Marianne Sætre, a senior adviser at the Oslo Police District. The murder statistics, however, are dominated by native Norwegians, according to the National Bureau of Crime Investigation. To bring down the gloomy crime figures, the country’s politicians are now emphasizing the need for a fast response by the police and the courts, and making families more responsible.

Rebuke for police chief from within the force (Dagsavisen)

Police officers in Oslo feel frustrated after Arne Huuse, head of the National Bureau of Crime Investigation, proposed shutting immigrants out of Norway. “Explaining crime levels in terms of ethnicity is a gross over-simplification,” said Inger Elisabeth Sagedal, head of communications at the Oslo Police District, and sociologist Marianne Sætre, also of the Oslo Police District. “We are working hard to establish a dialogue with the city’s immigrant communities. Mr Huuse’s comments, and the support he has received from the Police Union, are highly damaging to these efforts. They are helping to cement an image of the police as intolerant and anti-immigrant,” they said.

Voters give top marks to Kristin Halvorsen (Aftenposten)

Kristin Halvorsen reigns supreme in the popularity stakes. In the course of the past year the leader of the Socialist Left Party’s popularity has doubled among the 2,000 or so people who make up Aftenposten’s panel of voters. She outclasses all other competitors, and scores strongly in all camps. As many as 28 per cent feel that Ms Halvorsen has made a particularly good impression recently. She has made a better impression on four other parties’ voters than their own party leaders. Only Progress Party chairman Carl I. Hagen and the Prime Minister, Christian Democrat Kjell Magne Bondevik, score higher than her within their own parties, when voters are asked if any of the party leaders have made a particularly good impression recently. The league table for the other politicians is as follows: Carl I. Hagen (Progress Party), 11 per cent; Jens Stoltenberg (Labour), 6 per cent; Kjell Magne Bondevik (Christian Democrat), 4 per cent; Jan Petersen (Conservative), 2 per cent; Åslaug Haga (Centre Party), 1 per cent; Valgerd Svarstad Haugland (Christian Democrat), 0 per cent; Lars Sponheim (Liberal), 0 per cent.

Proposals for closure of Centre for Gender Equality (Klassekampen)

Local Government and Regional Affairs Minister Erna Solberg and Children and Family Affairs Minister Laila Dåvøy will today announce proposals to create a new, joint body to combat discrimination. Under the proposals, the Norwegian Centre for Gender Equality, the Gender Equality Board of Appeals, the Gender Equality Ombud and the Centre for Combating Ethnic Discrimination would be closed down. The move has been prompted by recent calls for the introduction of legislation banning ethnic discrimination. Today, only discrimination on the grounds of gender is legally banned. The Government’s proposal has been evaluated by officials at both ministries without any of the affected bodies being informed. The Gender Equality Ombud and the Centre for Gender Equality were only informed on Tuesday that the ministries’ evaluation had been completed and that a consultation paper was about to be circulated. Both bodies are highly critical of the way the process has been handled.

Worth Noting

  • According to Progress Party chairman Carl I. Hagen, the recent murder of an elderly woman in Haugesund has acted as a “wake-up call” for voters. Support for the Progress Party has risen by 2.4 percentage points in the latest opinion poll. Mr Hagen believes the immigration issue has given the party a boost.
  • Yesterday, Bjarne Undheim, president of the Norwegian Farmers’ Union, declared that the third battle to prevent Norway joining the EU was officially underway. Mr Undheim’s declaration was warmly welcomed by delegates attending the farmers’ annual conference and by Centre Party leader Åslaug Haga, who has promised to fight for the ‘modern no’.
  • Bente N. Halvorsen, treasurer of the Norwegian Confederation of Trade Unions (LO), has said the union could start investing in the stock market. The proposal is likely to prove controversial. The LO lost money last year in connection with the troubled Sparebank savings bank group, but its coffers remain well filled.
    (Dagens Næringsliv)
  • Defence Minister Kristin Krohn Devold has decided not to approve bombing exercises at Mjøfjell in Hordaland. This means there will no longer be any bombing training in southern Norway. The Armed Forces currently have three firing ranges in northern Norway, which are big enough for aircraft and helicopters to use for bombing practice. The military leadership is now considering how to distribute training exercises between Setermoen, Mauken/Blåfjell and Halkavarre.
  • Health Minister Dagfinn Høybråten wants people in Norway to get into better shape. The Directorate of Health and Social Affairs is now initiating a nationwide survey of Norwegian’s physical fitness. Behind the tests are reports indicating a sharp drop in fitness levels over the past few years.
    (Vårt Land)
  • Development Assistance Minister Hilde Frafjord Johnson will today announce the country’s first international action plan to combat genital mutilation. In the period to 2005, Norway will spend NOK 20 million a year to combat this brutal custom outside Norway.

Today’s comment from Dagens Næringsliv

Hardly an eyebrow was raised when interest rates were cut yesterday. Svein Gjedrem, Governor of the Norwegian Central Bank, had hinted so clearly beforehand that he would be taking a more than usually large chunk off the interest rate that barely anyone was expecting anything less than a full percentage point. It would have provoked consternation indeed if the Central Bank’s executive board had done otherwise. When dramatic measures are notified well in advance, most of the drama evaporates. In the press release issued by the Central Bank, Mr Gjedrem says that with interest rates at four per cent it is more likely that inflation in two years’ time will be lower than 2.5 per cent than that it will be higher. This is the way Central Bank Governors usually speak, and it means that a further cut in interest rates is on its way. Mr Gjedrem has been given an inflation target of 2.5 per cent in two years’ time, and that is what will guide his actions. However, this time Mr Gjedrem did not content himself with semi-cryptic messages. After the executive board’s meeting, Mr Gjedrem told the assembled press corps – and by extension all the country’s chief economists and ordinary people – that interest rates will be pushed down towards the 3 per cent mark by the end of the year. He also used the phrase “between three and three-and-a-half per cent”. In other words, people in Norway will probably be able to celebrate Christmas with an interest rate that is three-quarters of a percentage point lower than it is today.