People must demand further cut in interest rates (Dagsavisen)

When central bank governor Svein Gjedrem announced yesterday that the Norwegian Central Bank was to cut interest rates by 0.5 percentage points, it put an extra smile on the face of Peter Batta, head of the Norwegian Houseowners’ Association. The cut was twice as large as he had been hoping for. Even though the high street banks have promised to shave their lending rates, Mr Batta is appealing to mortgage-holders to use this opportunity to push for additional improvements in the terms of their loans. "And if the bank doesn’t listen to your demands for lower interest, switch to another bank," he said.

DnB will wait before cutting interest rates (Aftenposten)

A number of banks rushed to cut lending rates to their customers following the Norwegian Central Bank’s positive news yesterday. Among them were Gjensidige NOR, Sparebank1, SR-bank and Nordea Bank Norge. But DnB is holding off. "If the cut in interest rates gives the desired effect on money market rates we will of course follow suit," said Tore Dyrdahl on behalf of DnB. "The banks’ customers should receive notification that their mortgage interest has been lowered in plenty of time for Christmas," according to Aftenposten’s leader.

Warning against wage bonanza (Dagens Næringsliv)

Svein Gjedrem, governor of the Norwegian Central Bank, and Finance Minister Per-Kristian Foss have warned that large wage rises next spring could spoil the chances of any further cuts in interest rates. Yesterday’s cut is welcome, but will not make the major unions reduce their wage demands next spring, despite the admonitions of Messers Gjedrem and Foss. "We have a long tradition of not letting movements in interest rate affect our calculations or the wage demands we bring to the negotiating table," said Roar Flåthen, first vice president of the Norwegian Confederation of Trade Unions (LO).

Battle of the sexes sparks power struggle in Labour Party (Dagsavisen)

There are too many men in the Labour leadership. So one of them will have to go, say senior Labour women. The three men at the head of the party are scared to death of commenting on the problem. If a woman is to join the top team, it must be at the expense of party chairman Thorbjørn Jagland, deputy chairman Jens Stoltenberg or party secretary Martin Kolberg. This is something the three gentlemen are painfully aware of. They are also aware that the gender issue is not just a goal in itself. It could easily become a tool in the struggle to unseat one of them.

EU turns up the heat (Aftenposten)

Abolish the reduced rate of employers’ national insurance contributions for service enterprises in the Norwegian regions. Change the gas sales agreements negotiated by the Norwegian Gas Negotiation Committee. These are just two of several areas where the EU is stepping up its crusade against peculiarly Norwegian schemes. If we do not do as we are told on the issue of gas sales, the EU is threatening to impose swingeing fines. "We are tied by more and more rules which are administered and interpreted by the European Commission, the ESA and the European Court," says professor Johan P. Olsen, adding that, "Norway must learn to play this new game."

Minister could face huge compensation claim (Dagens Næringsliv)

Petroleum and Energy Minister Einar Steensnæs risks being landed with a claim for compensation of upwards of NOK 50 billion if Norsk Hydro and Statoil lose their battle with the European Commission over gas sales. When the Commission’s gas hearing started in Brussels yesterday the Norwegian state took responsibility for the scheme under which gas sales are coordinated by the Norwegian Gas Negotiation Committee (GFU). While the European Commission claims that the coordination of gas sales represents an illegal cartel, the Norwegian government maintains it is a matter of resource management which falls outside the EEA Agreement.

Hands off our oil, EU told (Nationen)

The European Union’s attempts to interfere in Norway’s oil policy decisions are completely unacceptable, says the organization No to the EU. However, professor Martin Sæter says it is naïve to believe that Norway can keep its oil policy outside the framework of the EEA Agreement. The European Commission has asked the EFTA Surveillance Authority (ESA) to consider whether Norway’s planned cut in oil production is in breach of the EEA Agreement. "This is the first time that the EU has reacted to a Norwegian production cut at such a high level," said Norway’s Ambassador to the EU, Bjørn T. Grydeland in an interview with NTB.

Norway overtakes Denmark as biggest aid donor (NTB)

Next year Norway will overtake Denmark to become the world’s largest foreign aid donor in relation to GDP. This is because the new conservative government in Denmark is cutting the country’s aid budget by DKK 1.5 billion, while Norway is increasing the amount it spends on aid by around NOK 1 billion from 2001 to 2002. The proportion of foreign aid compared to GDP will rise from 0.89 per cent in 2001 to 0.92 per cent in 2002 and will therefore total NOK 13.5 billion next year.

Worth Noting

• Anxious investors sold unit trust shares to the tune of NOK 3.3 billion in November. Others gambled that the bottom of the trough had been reached and bought new unit trust shares. In November this year investors bought and sold unit trust shares totalling NOK 6.8 billion. This is the highest turnover in one year. (Dagsavisen)
• The Directorate of Immigration (UDI) fears there will be a major influx of asylum-seekers from Romania when the visa requirement is withdrawn on 1 January. Temporary accommodation in workmen’s huts, sports arenas and tents will be offered to asylum-seekers for the few days it will take for the UDI to reject their applications. (Aftenposten)
• A new interim storage facility for highly radioactive waste must be ready for use by 2010, according to the recommendations published by an official inquiry yesterday. Environmentalists are not very pleased with the report. (NTB)
• Enough is enough for Trond Waage, Norway’s Commissioner for Children. Years of talking have not helped. Now teachers, school principals, local authority chief education officers and politicians must be made to shoulder their responsibilities so that school bullying can be brought to an end, he says. Mr Waage believes the legislation should allow local authorities to replace school principals who are unable to demonstrate results in the fight against bullying. (Verdens Gang)

Today’s comment from Dagbladet

Yesterday saw the long-awaited cut in interest rates by the Norwegian Central Bank. A cut of 0.5 percentage points was larger than most people had predicted. Central bank governor Svein Gjedrem also indicated that additional interest rate cuts could be on the way. Mortgage-holders have therefore been given the Christmas present many of them had been hoping for. In particular, young families with large mortgages and student loans have reason to be pleased. But debt-ridden local authorities and companies will also have more money to spend. The cut will also stimulate interest in investment. There are several reasons why we too can cut interest rates. The international economic downturn has been felt in many ways, and has contributed to lower price rises for imported goods. At home, too, we have seen indications of a slowdown in the economy, even though we have large wage rises and relatively little unemployment. At his press conference yesterday, Mr Gjedrem emphasized that the new rule governing the use of Norway’s oil revenues is extremely important for monetary policy. This means that the line taken by the majority in the Storting over the past six months has been a precondition for cutting interest rates. Yesterday’s interest rate announcement represents a harsh judgment on the Progress Party. It must be particularly painful for Siv Jensen, who chairs the Storting’s Finance Committee, to have been put so forcefully in her place. She and Carl I. Hagen have been liberal in their promises of cash for worthy causes, to be financed by pumping lashings of oil money into the economy. They have refused to admit that this would have a negative effect on interest rates, and were yesterday sent to stand in the corner by the Norwegian Central Bank.