Higher unemployment result of employer and union choice (Aftenposten)

Employers and unions alike are responsible for this year’s generous pay rises, so they must also take responsibility for the rise in unemployment, says Svein Gjedrem, Governor of the Norwegian Central Bank. Mr Gjedrem has been under fire this summer from, among others, the Norwegian Confederation of Trade Unions (LO), after he put interest rates up by 0.5 percentage points on 3 July. At yesterday’s interest rate meeting Mr Gjedrem decided to keep interest rates unchanged, but renewed his threat of a further rise in the not too distant future. "When unions and employers rejected a continuation of wage moderation, they also rejected a further drop in unemployment. Since then unemployment has had a tendency to rise," said Mr Gjedrem at yesterday’s press conference, hitting back at criticism from the LO. LO president Gerd-Liv Valla claimed earlier this summer that, "the Norwegian Central Bank is taking a big gamble, with people’s jobs as the stake".

Central Bank and Statistics Norway slug it out over importance of exchange rate (Dagens Næringsliv)

The effect of the Norwegian exchange rate on economic growth and inflation is the subject of fierce debate between the Norwegian Central Bank and Statistics Norway. Svein Gjedrem, Governor of the Norwegian Central Bank, has accused Statistics Norway’s Svein Longva of not taking his own calculations seriously and thereby failing to include them in his prognoses. When Statistics Norway presented its June forecasts, they also presented calculations, known as effect tables, which showed that the impact of a long-term change in the exchange rate on the level of economic activity and price inflation was considerable. So considerable that interest rates need to come down ‘a lot’. Mr Gjedrem has now voiced his disagreement with these calculations and Statistics Norway’s view of how the economy functions.

USA wants immunity (Dagsavisen)

The USA has taken the unusual step of asking Norway to sign an agreement which would prevent US citizens being handed over to the International Criminal Court (ICC) in the Hague. The US embassy’s counsellor for political and economic issues, Pam Pearson, has told Dagsavisen that ‘informal discussions’ have taken place with Norway with a view to signing a bilateral agreement under which Norway would undertake not to hand US citizens over to the ICC. Similar ‘discussions’ have also taken place with all the other European countries, and talks are continuing, she said. "The US request will be carefully evaluated within the framework of our obligations under international treaties and conventions," said acting Foreign Ministry spokesman, Øystein Bø. Norway’s answer will not be ready for some time, but it seems clear that the Foreign Ministry does not wish to enter into any agreements which could undermine the importance of the International Criminal Court.

Kristin criticized by party youth (Dagsavisen)

Kristin Halvorsen should not join a government coalition alongside Jens Stoltenberg and the Labour Party, says the Socialist Left Party’s own youth movement (SU). But party veterans do want the Socialist Left Party in office. SU leader Ingrid Fiskaa says the political differences between Labour and the Socialist Left Party are far too great to allow the formation of a coalition government after the next election. The SU is even less keen on entering into any formalized agreement between the Socialist Left Party, Labour and the Centre Party in the run up to the election, as mooted by the parties themselves.

Disagreement over Nato could scupper left-wing coalition (Klassekampen)

Will the Socialist Left Party join a coalition government with Labour, the Christian Democrats and the Centre Party? A straw poll of Socialist Left Party activists shows that there is not much enthusiasm in the party for abandoning their fundamental opposition to the EEA Agreement. It would be even worse to have to accept Norwegian participation in military operations which do not have a UN mandate. Military operations must have a UN mandate, insists the Socialist Left Party. "This would never be included in a coalition manifesto, says Professor Janne Haaland Matlary. Nato could just be the issue that scuppers a potential coalition between the Socialist Left Party and the Labour Party.

Shipping industry threatened with decline (Aftenposten)

Six major Norwegian shipping lines have been lost to foreign control during the past five years, provoking concern in the Norwegian shipping community. According to Marianne Lie, newly appointed head of the Norwegian Shipowners’ Association, if Norway’s largest shipping line, Bergesen, were to be bought up and disappear to Singapore, it would be a tragedy for the country’s maritime sector. Ms Lie made it clear that she did not want to comment on any individual shipping line, but pointed out that Bergesen maintains high standards of quality at all levels and is a shipping line that has considerable influence in the maritime sector.

Call for cross-party agreement on shipping industry (Dagens Næringsliv)

Both the Labour Party and the Conservatives believe the conditions under which the shipping industry operates in Norway are inadequate, and that a possible foreign takeover of the Bergesen shipping line is evidence of this. Olav Akselsen (Lab), chairman of the Storting’s Business and Industry Committee, has called for a ‘cross-party agreement on the shipping industry’. According to Mr Akselsen, the net wages scheme is an important measure, which must be included in such a cross-party agreement. He is even more worried about the future of the Norwegian coastal shipping industry, and says that an agreement must also ease conditions in the domestic market. Oddvar Nilsen, leader of the Conservative Party’s parliamentary group, also believes that signals indicating the sale of Bergesen and the transfer of its operations abroad also show that conditions for the shipping industry in Norway are not good enough.

ESA demands lottery tax (Aftenposten)

The EFTA Surveillance Authority (ESA), whose job it is to monitor the EEA Agreement, has demanded that Norwegians must either pay 28 per cent tax on winnings in excess of NOK 10,000 from the Norwegian lottery, or we must cease to levy tax on the winnings from foreign lotteries. Siv Jensen (Progress Party), who chairs the Storting’s Finance Committee, believes the Government will introduce a lottery tax if the ESA does not back down. "But there is no reason to tax such income, and the sums involved are not very big," she said.

Worth Noting

• A return flight between Oslo and Tromsø for NOK 1,400. A return flight between Oslo and Bergen for under NOK 700. That is how cheap it is possible to fly in Norway now. According to SAS/Braathens, the merger between the two companies has led to savings. At the same time the new budget airline, Norwegian Air Shuttle, takes to the air. It is all good news for passengers.
  (Aftenposten)
• Six unions belonging to the Norwegian Confederation of Trade Unions (LO) could amalgamate into one organization. Postmen, waiters, railway conductors and drivers could end up in the same union, which would have upwards of 140,000 members. The six unions will today publish the results of an analysis by the Institute of Applied Social Sciences of the need for amalgamation and the benefits it would bring.
  (Aftenposten)
• Siv Jensen, who chairs the Storting’s Finance Committee, has said she supports the creation of a central debt register which could prevent people getting into too much debt. Ms Jensen admits the proposal is controversial, but says that new measures must be considered because the number of people who are unable to service their debt obligations is growing so fast.
  (nrk.no)
• A national definition of what ‘round-the-clock care and nursing services’ implies does not exist. The Storting has decided that one in four people over 80 should be offered such assistance. "A confidence trick," is how Professor Peter F. Hjort, MD, describes local authorities’ amalgamation of sheltered accommodation and nursing homes in an effort to improve their statistics. The Norwegian Board of Health has now announced a comprehensive review of care provision for the elderly.
  (Aftenposten)
• The cost of medicines in Norway must be reduced, according to both the Consumer Council and Health Minister Dagfinn Høybråten. Allowing supermarkets to sell non-prescription drugs is one of the measures under consideration.
  (Dagbladet)
• Six out of ten Norwegians believe that food produced in Norway is safer than Swedish pork ribs or Danish salami. Women and people on low incomes are most sceptical when it comes to food produced in other countries, according to a survey conducted by Sentio-Norsk Statistikk.
  (Nationen)
• Of all the social groups, young people who believe in God are the most tolerant of immigrants and the Muslim faith, according to a survey conducted by Norsk Monitor. Norsk Monitor is a comprehensive survey of Norwegians’ attitudes and values, and has been carried out every second year since 1985. At least 4,000 people answer over 300 questions each time the poll is conducted.
  (Vårt Land)

Today’s comment from Nationen

The Norwegian Central Bank did not put up interest rates yesterday – not unsurprisingly. The experts were unanimous in warning against a rise in interest rates now. But so did many of them when the rate was raised earlier in the summer. Svein Gjedrem, Governor of the Norwegian Central Bank, has come in for a lot of much deserved criticism since that increase. The rise was an unnecessary burden on the finances of ordinary borrowers – a kind of punitive expedition following this spring’s round of wage increases. The rise also sent out unfortunate signals about the kind of policy the Bank is pursuing, and how Mr Gjedrem has interpreted the mandate he has been given by the Storting and the Government. The politicians have made Mr Gjedrem one of the most powerful people in the Norwegian economy. But both formally and in practice he is still steered by the Government’s directives. This summer has shown how important it is that both the Government and the rest of the political community remain constantly on their toes in their role as the Bank’s watchdog. The Bank obviously needs some ‘political signals’ to respond to. We therefore expect to hear more from the opposition parties who this summer have attacked the Bank’s policy on interest rates. They should not let Mr Gjedrem off the hook.