Employers’ new wage policy crumbling (Dagens Næringsliv)

Workers were seeking to have the better part of their wage settlements negotiated locally. But in the final settlement, the general pay raises given by the employer organizations are the biggest in several years. The Confederation of Norwegian Business and Industry (NHO) adopted a new employer programme last autumn which takes wage policies in a new direction. according to the NHO, the Norwegian Federation of Trade Unions (LO) abandoned the cooperation and moderation policies it followed in the first half of the 1990s. The employers have therefore been trying to work out how to set wage and working conditions at the company level. The two NHO associations that have been in the ring so far have given such great industry-wide raises that NHO Director General Finn Bergesen, jr. is asking employers to keep a tight reign on local pay raises.

Norges Bank keeps key rates steady (Klassekampen)

The central bank’s governing board decided on Wednesday to maintain key rates unchanged, at 6.5 and 8.5 per cent. The board did not consider the possibility of cutting rates later this year. The board maintains that over a two-year period, inflation could be either higher or lower than 2.5 per cent – either way is equally likely. At the press conference following the meeting, the central bank’s vice-chairman Jarle Bergo said it is too early to forecast the impact of the labour settlement on inflation and ultimately on interest rates.

Costs rising faster than farm incomes (Nationen)

The Norwegian Farmers’ Union is holding its conference, "Production in a high-cost country", today. Agriculture will collapse if farmers cannot recover rising costs through higher prices. Farm union president Harald Milli will publish figures showing how cost inflation is affecting Norwegian agriculture.

Unions fed up with greedy executives (Dagsavisen)

Gerd-Liv Valla, president of the Norwegian Federation of Trade Unions (LO), is now bringing the entire weight of the LO to bear on bringing the explosion in executive pay under control. She will seek an amendment in the Companies Act to bring executive pay under the purview of local wage negotiations. According to the latest figures from the Technical Reporting Committee on Income Settlements, the growth curve in executive pay has been extremely steep in recent years. Average growth in wage-earner income in 2001 was 4.8 per cent. In comparison, the average rise in executive pay in major corporations was 14.1 per cent. Executive pay in small companies rose 5.7 per cent. Viewed over the past five-year period, the difference is even more dramatic. Top executive pay has doubled on the average, against 25 per cent for wage earners.

Asylum-seekers without passports may be jailed (Aftenposten)

"Asylum-seekers without a genuine need for protection are a major problem, and they make things even worse by concealing their identities. Major delays are the result," says state secretary Kristin Ørmen Johnsen of the Ministry of Local Government. "We will take steps to put a stop to this. One possibility already open to us is to have asylum-seekers brought before a court of examination if they cannot produce genuine identity documents. We should make much greater use of this option," she says. Ms. Johnsen emphasizes that these measures are not aimed at asylum-seekers coming from war zones or from countries where illegal means are the only way to get out of the country. But the steady rise in asylum-seekers from countries like Russia, Ukraine and other Eastern European countries – all countries which provide their nationals with identity papers and where there is no war or persecution – is a problem. "It is simply not acceptable for nationals of these countries to destroy their identification papers after arriving in Norway or just before they approach Norwegian authorities to seek asylum," says Ms. Johnsen.

Closed meeting on Norwegian war effort (Aftenposten)

The Minister of Foreign Affairs and the Minister of Defence will brief the Storting’s Enlarged Foreign Affairs Committee next week on what Norwegian troops are doing in Afghanistan. The formal initiative to these briefings came from the Government, but it did not come about without strong pressure from the Centre Party’s foreign policy spokeswoman, Åslaug Haga, and others. The meetings with the Enlarged Foreign Affairs Committee will be closed. Ms. Haga feels Norway’s Government and military leaders have been much too sparing in the information they have provided to the Storting and to the public regarding the war effort in Afghanistan since Norwegian elite soldiers were sent in.

Worth noting

• Guerrilla leader Veluppilai Prabhakaran held his first news conference in 12 years on Wednesday, meeting 250 reporters from around the world. He did not rule out the possibility of dropping the demand for a Tamil state. With Norway’s help, the peace process on Sri Lanka may succeed, he said. (Aftenposten)
• A Norwegian website, forskning.no, will offer news on Norwegian research efforts. The website will provide research news tailored to an adult public which does not normally read research publications. Minister of Research Kristin Clemet opened the website yesterday (Dagens Næringsliv)
• A fierce tug-of-war is taking place over how big a stake the government should retain in Statkraft, Norsk Hydro, SAS and similar state-owned companies. The Conservatives and Christian Democrats have taken opposite sides on the issue and are fighting over who will be case spokesman for the bill in the Storting. The Government has yet to take a stand, and Minister of Trade Ansgar Gabrielsen can no longer promise that the bill will be filed by 19 April, as previously announced. (Dagsavisen)
• Øystein Djupedal (Socialist Left) was compelled to tender an apology last year for his allegation that among the companies in the Government Petroleum Fund’s portfolio was a company that manufactures the controversial cluster bombs used by US forces in Afghanistan. His allegations have now proven to be true. (Dagsavisen)

Today's comment from Dagens Næringsliv

All deputy central bank chairman Jarle Bergo had to offer yesterday were improved formulations. He emphasized that beyond wording, there were no real changes. This is the sort of explanation central banks have to offer in order to be understood or to avoid being misunderstood. This may also be the reason why Mr. Bergo declined to comment on the wage negotiations beyond his remark that the central bank was aware of them. What he really wanted to talk about was the strong krone, which did not bother him in the least. The fact that it is now two per cent stronger, measured against the currencies of our trading partners, than it was at in the last inflation report, helps only to reduce the imported inflation. This effect is offset partly by higher than anticipated gains in the international business cycle. Mr. Bergo also disagreed that the krone was creating problems for jobs and production. After all, the Norwegian economy is going full blast. He also observed that the economy faces structural changes, and this often means a tight fiscal policy.

It is because of the structural changes that in many companies, wage growth this year will probably be higher than what is good for them. The only comfort is the fact that high interest rates make for a strong krone, which brings import prices down. This is little comfort, however, to export manufacturers, who have the deck stacked against them on every count: high interest rates, unfavourable exchange rates, and higher wage inflation than their trading partners. This is the price we pay for spending our oil revenues.