Wage growth may set new record (Aftenposten)

Not since 1980, and hardly even then, has a wage settlement given as much real gain in private incomes as this year’s settlements. The reason is the combination of hefty pay raises, low inflation and billions in tax relief from the current Government, made possible by Norway’s oil revenues. Due to extremely low price inflation, real pay gains are likely to be just short of 4 per cent. The current record was set in 1998 when wage settlements got completely out of hand and aggregate wage growth for all groups was 6.2 per cent. Price inflation was 2.3 per cent at the time, however, bringing real wage growth down to below 4 per cent.

Public employees keen for record pay raise (Dagsavisen)

Public sector employees, inspired by the successful wage demands in heavy industry, approach this year’s wage negotiations with renewed courage. "Five per cent is good, but we want more," says pre-school teacher Matilde Bø. The Confederation of Norwegian Business and Industry (NHO) and Statistics Norway are both concerned about Norway’s industrial competitiveness. Bank economist believe a rise in interest rates is just around the corner.

Interest rates expected to go up (Dagbladet)

The wage settlement in the engineering industry has some interest experts anticipating a rise in interest rates after summer, which would offset much of the wage growth. At 14.00 hours today it will be clear whether the central bank will be lowering interest rates at all. All interest experts interviewed by Reuters believe rates will remain unchanged for now.

Call for war-baby commission (Dagsavisen)

After years of fighting for justice, an important bill will be submitted to the Storting today on behalf of the war-babies, as children fathered by occupation soldiers during World War II are called in Norway. The bill, submitted by Magnhild Meltveit Kleppa (Centre), asks the Storting to create a war-baby commission. "This is the first time any political action has been taken to redress this shameful chapter in Norwegian history. A good thing, but it has been a long time in coming," says war-baby spokesman Tor Brandacher.

Refugees cost norway nok 1m daily (Verdens Gang)

The cost of criminal and bogus asylum-seekers is even higher than first anticipated. With police carrying on a "non-strike", these people are not being escorted out of the country. The 3,700 persons currently awaiting deportation are costing Norway NOK 1 million per day, according to figures from the Directorate of Immigration (UDI). By comparison, this is over three times the amount proposed by the Government for civil defence and political contingency plans. And costs are set to rise even further. The UDI expects to handle 14,000 cases by the end of the year.

Norwegian power conglomerate aborted (Dagens Næringsliv)

Statkraft was at one time discussing a merger with Fortum, a Finnish energy group, which would have resulted in the next biggest industrial group in Scandinavia, with an anticipated stock market value of NOK 85 billion. Minister of Energy and Petroleum Einar Steensnæs confirms that talks did take place. "Talks were held over an extended period of time, but the issue has now been dropped," says Mr. Steensnæs. A merger would have reduced the Norwegian government’s stake in Statkraft.

Humanists do not trust christian democrats (Vårt Land)

The Norwegian Humanist Association calls on the Storting to promptly pass a policy motion to separate Church and State. The Humanist Association does not want the Bondevik Government in control of the process by which the separation will be effected. "In our view, this is such an important issue that the Storting should take the initiative. This will give us the assurance that all aspects of the matter will be considered," says Lars Gule, Secretary-General of the Norwegian Humanist Association.

Worth noting

• Prime Minister Kjell Magne Bondevik agrees with the Socialist Left, advocating the creation of a "regions commission" instructed to "leave no stone unturned" and to "take a fresh look" at the Norway’s regional policy measures. (Aftenposten)
• A tongue depressor manufactured in Norway has recently been identified as the source of an outbreak of infections at Norwegian hospitals. At least 78 cases have been reported, some of them fatal. (Dagsavisen)
• Labour MP Gunn Karin Gjul calls for a full trade boycott of Israel. "Even if a boycott does not produce immediate results, it will still be a strong political signal to Ariel Sharon and Israel that the world community is in earnest," she says. (Verdens Gang)
• The Russian authorities are revising their fisheries policy to have more fish from Russian vessels landed in Russia. This could lead to shortages in raw materials in the Norwegian fish products industry. (Dagens Næringsliv)
• The Government advocates a change in the Securities Act by which shareholders and holders of derivatives will not be compelled to reveal their identities. "This will reduce our scope for monitoring and inspection," says Eystein Kleven, Assistant Director of the Banking, Insurance and Securities Commission. (Klassekampen)
• For the first time in Norwegian history, soft drinks are selling in greater volumes than milk. The volume of milk sales through grocery retail outlets was down 12 million litres, or 3.1 per cent. (Nationen)
• Thor Heyerdahl is "riding into the sunset", as he puts it. He went home from the hospital yesterday after doctors have given up hope that his cancer treatment will be successful. (Verdens Gang and Dagbladet)
• "Oslo is an ugly city" was the judgement of the public in a recent opinion poll. The capital will now be refurbished and made presentable for the 100th anniversary of Norwegian independence in 2005. (Aftenposten)

Today’s comment from Dagens Næringsliv

A settlement was reached in the engineering industry yesterday, to the delight of many. Given that local pay raises will be about the same as in the five preceding years, yesterday’s settlement means a real wage growth of 3.5 per cent in the engineering industry. This is the highest real wage growth in several decades, and it may reduce Norway’s competitive ability by five per cent for the second consecutive year. The consequences could be unpleasant. The unions’ solidarity alternative and moderation policy resolve has crumbled, now that it is really needed. But it will take time before the consequences of reduced competitiveness are felt. Companies teetering on the edge will collapse after years of falling returns. The real consequences will materialize long after wages have gone up, and the consequences will be the loss of jobs.