Budget hits regions (Aftenposten)

When the Government today announces its revised budget for 2002, regional assistance will be cut by an additional NOK 350 million. "We have to consider regional assistance in the context of the proposed changes in the tax system," said Local Government and Regional Development Minister Erna Solberg. Allocations to the Norwegian Industrial and Regional Development Fund (SND) will also be cut by NOK 500,000. The ferry companies will lose tax breaks worth some NOK 240 million. There will also be cuts in cultural grants. The Government has decided not to continue its efforts to create a national knowledge base.

Labour claims Bondevik increasing welfare gap (Dagsavisen)

The Bondevik government will increase the gap between rich and poor in Norway, according to the Labour Party’s social policy spokesman, Bjarne Håkon Hanssen. He has reacted strongly to indications that that the Government will spend ‘much more’ money on axing the dividend tax than on alleviating poverty and helping those on the lowest incomes in the revised national budget to be announced today.

Norway prepared for increased military involvement (Aftenposten)

The Government remains unmoved in the face of popular doubts and celebrity criticism of the US air strikes against Afghanistan, and promises to provide more help to the US military campaign if required. In a wide-ranging and in places emotional speech to the Storting yesterday, the Prime Minister defended Norway’s support for continued air strikes against Taliban strongholds and terrorist bases in Afghanistan. Mr Bondevik confirmed that the possibility of additional Norwegian assistance has been discussed with the American authorities and that the Government is prepared to provide military support for the USA, including participation in Nato operations. However, on that issue he declined to go into more detail.

Bonus stop (Verdens Gang)

Today or early next week the Norwegian Competition Authority will announce measures to ‘intervene’ in the airlines’ frequent flyer bonus schemes. Such intervention in the bonus schemes operating in the domestic Norwegian market could be another nail in the coffin for the ailing Norwegian carrier, Braathens. SAS, which has made a takeover bid for Braathens, has plainly indicated that any such limitations will not exactly increase its interest in acquiring its competitor. "We have already said we strongly disagree with this type of intervention, which would put SAS at a disadvantage in relation to our competitors in Europe," said SAS deputy chief executive Gunnar Reitan. The Competition Authority’s measures have been prompted by Government fears that the airlines’ bonus schemes form an entry barrier for the establishment of new airlines in the domestic Norwegian market, and as such represent an impediment to free competition.

Government divided over WTO (Nationen)

Foreign Minister Jan Petersen did not want to take Agriculture Minister Lars Sponheim with him to Qatar. Mr Sponheim was told at the last minute to stay at home because the Foreign Ministry wanted to prevent Norwegian agricultural interests having too high a profile during the WTO summit which starts today. State Secretary at the Ministry of Agriculture, Leif Helge Kongshaug, replaces Mr Sponheim at the head of a much reduced agricultural delegation. The Ministry of Agriculture has a number of experts who have been working on issues linked to multi-functional farming in the WTO negotiations. A number of these experts have not been allowed to attend the Qatar meeting.

Jens P. Heyerdahl: Kværner a horrifying example (Dagens Næringsliv)

Former Orkla chief executive Jens P. Heyerdahl has described Kværner as an "embarrassing and horrifying example" of a corporate culture devoid of a long-term strategy. Kværner has been led by managerial impulse, he claimed. Mr Heyerdahl would like the financial sector to think more in industrial terms, and would prefer to see financial analysts who look like rumpled oil engineers than slick dandies from Wall Street. In a speech to a conference of business leaders in Trondheim, Mr Heyerdahl used Kværner as a horrifying example of what happens when a company lacks a steady strategic hand on the tiller and a foreseeable corporate culture. It is the first time Mr Heyerdahl has made such a strong attack on Kværner. Though he named no names, his target was obvious: Kjell Almskog and Kværner’s board of directors.

Biggest foreign acquisition ever (Aftenposten)

Norsk Hydro has been secretly negotiating the acquisition of the giant German aluminium producer, VAW, for more than a year. This will be the biggest ever foreign acquisition for a Norwegian company, and comes with a price-tag of around NOK 25 billion. If the acquisition goes ahead Norsk Hydro will become the world’s third largest manufacturer of aluminium. An acquisition of VAW could also lead to a reduction in the state’s shareholding in Norsk Hydro to 33 per cent. The acquisition which Norsk Hydro is currently negotiating conforms to the Government’s preferred method for reducing state ownership. (Aftenposten)

Worth Noting

• The abolition of investment tax is to be postponed by six months from 1 April to 1 October. This is a true copy of Labour’s proposal, which a furious Per-Kristian Foss dubbed a breach of contract before coming into office, and which he promised to do his utmost to put right. (Verdens Gang)
• She would so very much have liked to continue, but Astrid Nøkleby Heiberg suffered a crushing defeat yesterday when the International Red Cross elected Spaniard Juan Manuel Suarez del Toro Rivera as its new president.
• 45 per cent of the Norwegian population believes the Government should call for a halt to the air strikes against Afghanistan, 45 per cent believe the opposite, while 10 per cent are uncertain. A majority of Christian Democrat and Liberal voters want a halt to the bombing. (Aftenposten)
• Hunt for terrorist backers in Norway and Sweden. American authorities have handed over a list of ten names – both private individuals and organizations – in Norway which the National Authority for Investigation and Prosecution of Economic and Environmental Crime and the Banking, Insurance and Securities Commission are currently investigating. Several of the names have also been sent to the Swedish police. (Dagbladet)
• Last year a total of NOK 92 billion in taxes poured into the Norwegian treasury from the North Sea. The figure represents an increase of no less than NOK 66.7 billion, or 279 per cent, compared to the year before. (NTB)
• The proportion of first-time voters who actually cast their vote was the lowest ever at this year’s general election. According to preliminary figures from the Central Bureau of Statistics, only half of all first-time voters exercised their right to vote. (Dagsavisen)
• The life insurance company, Storebrand Livsforsikring, is in danger of being downgraded by the international credit rating company, Standard & Poors. There is a considerable amount of uncertainty as to whether Storebrand has sufficient capital resources to maintain today’s credit rating. (Dagens Næringsliv)
• SAS plans to abolish Business Class and reduce the amount of in-flight food it serves as part of a plan to cut ticket fares. According to the Danish newspaper, Politiken, these proposals are included in a secret action plan for 2002. (Verdens Gang)

Today’s comment from Aftenposten

All the signals we have received concerning the changes to the former Labour government’s proposed national budget, which the new coalition is due to announce today, indicate that the Bondevik government plans to make Labour’s most visible broken promises its own. Both Prime Minister Kjell Magne Bondevik and Finance Minister Per-Kristian Foss seem to be banking on the electorate having forgotten that they themselves quite rightly pointed out that the Labour government had deliberately broken the agreement to abolish investment tax from 1 April next year. But we have not forgotten. It seems likely that the Bondevik government will retain its predecessor’s proposal to keep investment tax in effect until 1 October. The Government’s justification for this decision is the same as Labour’s – its room for economic manoeuvre just was not big enough. Both governments have in common a desire to give priority to their own short-term need to score political points rather than keep the promises they have previously given to the voters and to industry. Neither of them see any intrinsic value in keeping the promises which have already been given if, in the meantime, new needs arise which if met will give them, they believe, a short-term political win. This type of budget jiggery-pokery makes it difficult for those affected, in this instance business leaders, to plan their business activities. Quite simply, they cannot trust the politicians to stick to their own decisions. The most certain result of this is a further increase in the contempt for politicians, which is already substantial. We are sorry that politicians who with good reason criticize broken promises when in opposition, do not have the backbone to follow up their criticism when they get into office.