Norway Daily No. 191/99

The Royal Ministry of Foreign Affairs,
Oslo Press Division

Norway Daily No. 191/99

DATE: 5 October 1999

JAGLAND READY FOR BUDGET TALKS

(Dagsavisen)

Thorbjørn Jagland believes that there is a possibility of reaching a budget settlement with the Government, but demands a more equitable distribution between rich and poor. The centrist parties also hope to reach an agreement. "It is necessary for the good of the country that Labour and the centrist parties sit down and talk about the budget," says Mr. Jagland. But he has still not stated definitively that Labour will agree to the cash benefits scheme. Einar Steensnæs, chairman of the Christian Democratic Party parliamentary group, says he "hopes to negotiate an agreement with Labour".

HÅGENSEN CALLS FOR COOPERATION

(Dagsavisen)

Yngve Hågensen, leader of the Norwegian Confederation of Trade Unions, hopes and believes that this autumn's budget drama will end with a settlement between the centrist parties and Labour. The powerful confederation boss is considered one of Thorbjørn Jagland's closest allies, and he is also a member of Labour's Central Executive Committee. "The budget is crying out for cooperation with Labour," he says.

SEEKING A QUICK SOLUTION ON COLLABORATION

(Aftenposten)

"We are ready for a meeting, preferably before next week's Speech from the Throne. It would be a great advantage if there were a quick answer as to whether there is a basis for a budget cooperation with Labour," says Prime Minister Kjell Magne Bondevik. However, he is not ruling out the possibility of cooperating with the Conservatives and the Progress Party. Mr. Bondevik says that the Fiscal Budget is not primarily intended as an invitation to cooperation with Labour. "We want to work with Labour first, since it is the largest opposition party. If we are unable to cooperate with Labour, we will have to include other parties in our negotiations, which will complicate matters considerably," says Mr. Bondevik.

UNIONS CONFEDERATION FURIOUS ABOUT CUTS IN PENSIONS

(Dagens Næringsliv)

Yngve Hågensen, leader of the Norwegian Confederation of Trade Unions, is threatening to call income policy cooperation to a halt. The reason for this is that Minister of Finance Gudmund Restad has invited Labour and the rest of the Storting to cut down on rights to receive a contractual pension. In the view of Mr. Restad, the contractual pension scheme is too favourable, and he wants Norwegians to remain in their jobs longer.

TAX PROPOSAL VOTED DOWN

(Aftenposten)

As early as four and a half hours after it was submitted, the Storting voted down one of the Government's tax proposals. Labour stated in no uncertain terms that it is not interested in supporting a proposal that more taxpayers should be paying a surtax on higher incomes. In the course of those few hours, half a billion kroner out of a total tax and duty increase of 2.9 billion kroner simply "disappeared". Another controversial proposal from the Government, eliminating tax credit for dependent children, will also probably be voted down in the Storting. The Conservative Party and Progress Party are clearly against it, while Labour describes the proposal as a "nasty shock".

TAX DISCREPANCIES MUST BE RESOLVED

(Dagbladet)

Labour Party Chairman Thorbjørn Jagland says that he supports budget cooperation, but only on the condition that the rich pay more taxes. Prime Minister Kjell Magne Bondevik, on the other hand, is not particularly interested in discussing an increase in taxes for shipowners, eliminating reductions on taxes on stocks, or revising the distribution model. It seems that the result will be some extremely difficult negotiating rounds between Thorbjørn Jagland and Kjell Magne Bondevik.

DNB POSITIVE TOWARDS STATE OWNERSHIP

(Aftenposten)

For the first time, the management at Den norske Bank (DnB) has expressed the view that state ownership of the bank is necessary in order to keep the bank's headquarters in Norway. Svein Aaser, president of the DnB, says that it may be very difficult to maintain a strong and nationally-based commercial bank with its headquarters in Norway since the Norwegian Government does not have a high enough ownership share to block the move.

WORTH NOTING

• * The Storting majority political parties were unanimous in their reactions to the Fiscal Budget, as any minority Government is accustomed to hearing. The parties' comments were: Conservative Party - tame and lacking in vision. Labour Party - disappointingly faceless. Progress Party - tame and lacking in vision. Socialist Left Party - grey and faceless. (Vårt Land) * By the end of next year there will be NOK 300 billion in the Petroleum Fund, if economic development continues as the Government expects it to. Interest rates will continue to decrease, and inflation will drop to two per cent. The only fly in the ointment is that unemployment will increase somewhat. (Aftenposten) * Odd Roger Enoksen is now committing the Centre Party to a total boycott of Thorbjørn Jagland for the rest of the Storting period if Mr. Jagland returns to the position of Prime Minister this autumn. (Verdens Gang) * Labour Party leaders harbour serious doubts as to whether Prime Minister Kjell Magne Bondevik wants to reach a budget settlement with Labour. They believe that both the PM and Lars Sponheim, Chairman of the Liberal Party, have an entirely different long-term goal, which is completely contrary to a budget settlement with Labour now: that of getting Jan Petersen and the Conservative Party into a future Government. (Verdens Gang) * The reaction of the private sector to the Fiscal Budget is characterized more by fear of a settlement with the Labour Party than of the actual proposals in the budget itself. (Dagbladet) * Hydro is moving all of Saga's activities in Stavanger to Bergen. The only exception is operations in the Snorre field, which will be taken over by Statoil in 2003. At a general meeting in Saga Petroleum yesterday, 350 employees of Saga's operational organization were informed that there will be only 170 jobs left in Stavanger. The 180 who will become redundant will have the choice of either applying for jobs that will be made available internally in the new Hydro company, accepting compensation for quitting, or risking getting fired. (Aftenposten)

TODAY'S COMMENT

Opposition is being expressed from all sides against Minister of Finance Gudmund Restad's Fiscal Budget. All the opposition parties are expressing disgust, and with good reason: this budget is provocative in its political neutrality. No concessions have been made to the Labour Party, as many observers had expected there would be, nor to the Conservatives or the Progress Party. Now there will be an uproar, and one of the reasons for this must seem like a paradox to the Government: under the leadership of Gudmund Restad, the Norwegian economy has become so good that the politicians are free to fight like cats and dogs. We were given a preview of this yesterday. The Stock Exchange is yawning while the Storting is seething. At the same time, however, Mr. Restad's budget is such that both Labour and the conservative wings must agree that it is possible to reach agreements with Mr. Bondevik. There are no insurmountable obstacles in their path. (Nationen)