The Royal Ministry of Foreign Affairs, Oslo
Press Division – Editor: Benedicte Tresselt Koren

Norway Daily No. 190/02

Date: 7 October 2002

Seamen’s efforts to force full astern on tax proposals probably successful (Aftenposten)

Regardless of whether Prime Minister Kjell Magne Bondevik pushes his government’s budget through with the help of the Progress Party or the Labour Party, he will have to abandon the proposed tightening of the tax regime for seamen and shipowners. A broad swell of agreement on this is building in the Storting, and the coalition parties are open to change on this issue. This morning hundreds of seamen will gather to protest in front of the Storting. For two hours from 12 o’clock 1,200 Norwegian ships all over the world will lie still in the water in protest against the proposed tightening of the tax rules, which will cost seamen and shipowners a total of NOK 460 million.

Jens Stoltenberg: Stop playing games (Aftenposten)

From the sidelines Labour leader Jens Stoltenberg is shaking his head over the budget games being played. "Kjell Magne Bondevik and Carl I. Hagen are both running away from their responsibilities," he said, adding that being a godfather had its obligations. Mr Stoltenberg was referring to the fact that Mr Hagen played a key role in putting the current government into office. "I totally reject Jens Stoltenberg’s claim that we have a particular responsibility for this government. Mr Bondevik has chosen to have three opposition parties (the Progress Party, the Labour Party and the Socialist Left Party), and treats us all alike," replied Mr Hagen. One thing seems fairly clear. Since the budget was announced on Thursday last week, the gap between the Government and both its potential budget allies has widened.

Government leaning towards Progress Party (Dagsavisen)

Signals from Local Government and Regional Affairs Minister Erna Solberg and Carl I. Hagen, chairman of the Progress Party, indicate a willingness on both sides to initiate negotiations on the Government’s proposed national budget for next year. In connection with the Progress Party’s local government conference held this weekend in Tønsberg, Ms Solberg declared that apart from the budget’s overall framework and the Government’s determination to keep spending tight, on which it is immovable, there are no "holy cows" for the Government in the budget proposal. Ms Solberg said that the Progress Party would now have to go through the budget proposal and respond with specific demands and priorities. "I think it is a good thing that the Progress Party is willing to start negotiations with us," said Ms Solberg. According to Carl I. Hagen the Progress Party’s various policy groups in the Storting would now review the budget proposals, after which the party would present its demands and priorities to the Government.

Slight majority in favour of EU membership (Nationen)

Supporters of EU membership are on the offensive. A recent opinion poll shows a majority in favour of EU membership for the first time in a long time. "But we probably need 60 per cent before we can restart the EU process," said Sigurd Grytten, leader of the European Movement in Norway. This is the fourth poll carried out by Sentio-Norsk Statistikk which indicates a growth in support for EU membership. For the first time in over two years there is now a majority in favour of Norwegian membership of the EU. 46 per cent say yes, while 44.4 per cent say no. 9.6 per cent have not made up their minds. "The expansion of the EU eastwards and the steadily growing gap in interest rates between Norway and Sweden will lead more and more people to support EU membership," said Mr Grytten, who is predicting growing pressure from consumer interests. "It is alarming that supporters of EU membership are in the majority for the first time in a long time. But we are certainly not talking about any dramatic change in the poll results," said Sigbjørn Gjelsvik, leader of No to the EU.

Government could renege on promises (Vårt Land/Saturday)

The Bondevik government’s promises celebrate their first birthday in a few days. But it now looks to Prime Minister Kjell Magne Bondevik as though he may fail to reach some of the targets he set for this four-year parliamentary term. He explains this by pointing to the stock market slump and low oil prices. A rise in unemployment could lead to more broken promises. The morning after the night before Mr Bondevik himself took the initiative to reveal how the almost universal condemnation of next year’s national budget has affected him. "I feel that much of the criticism has been quite unreasonable and totally out of proportion. We must remind each other that Norway is, in fact, a good place to live," he said. He also asked people to remember that this budget is "what the country needs right now".

8,000 lose unemployment benefit (Dagsavisen/Saturday)

One in nine of those unemployed will be affected by Labour and Government Administration Minister Victor D. Norman’s proposal to cut the unemployment benefit period from three to two years. Nevertheless, Mr Norman is firmly convinced that his strategy is the right one. The Government intended to make demands on those receiving unemployment benefit, just as it did in the old days, he said. According to Harald Trulsrud of the Job Seekers’ Association, the new unemployment benefit scheme will simply push people into the country’s social security offices. At the end of September 76,800 people were completely unemployed, according to figures from the Directorate of Labour. 8,000-9,000 of these had been without a job for more than two years, according to the Ministry of Labour and Government Administration.

Norway refuses to help Krekar (Verdens Gang/Sunday)

The Norwegian authorities will not step in to prevent Mullah Krekar being extradited to Jordan. "Krekar’s family does not represent any leverage for him to return to Norway," said Local Government and Regional Affairs Minister Erna Solberg. The news that the Dutch prosecution service is recommending extradition to Jordan does not worry the Norwegian government. "We have complete confidence that the Netherlands will handle the case in the same way we would. They are tied by the same agreements and conventions as us," said Ms Solberg.

Worth Noting

• The Norgesgruppen supermarket chain cannot live with Stein Erik Hagen as a major shareholder both in the food producer Orkla and the ICA Ahold supermarket chain. "Mr Hagen must choose," said Sverre Leiro, Norgesgruppen’s chief executive. Mr Leiro is concerned about the future of the food industry in Norway. "Orkla, not least, should be on guard against chains such as ICA, Lidl and Coop. These chains prefer to purchase from abroad and do not take Norwegian industry into consideration," he said.
  (Aftenposten)
• Aker Kværner’s British pension scheme is underfunded to the tune of NOK 4.1 billion. This is more than the market value of the entire corporation.
  (Dagens Næringsliv)
• Telenor has made 1,000 employees redundant so far this year. Now an additional 500 will have to find themselves new jobs, warns chief executive Jon Fredrik Baksaas. "It is ridiculous of Mr Baksaas to announce specific figures at this stage," said employee representative Harald Stavn, adding that how much the headcount needs to be cut is something the two sides should work out jointly.
  (Aftenposten/Saturday)
• The Christian Democrats want a halt to party funding. Inger Helene Venås, general secretary of the Christian Democratic Party, is strongly opposed to cuts in state funding for small parties. "This is a proposal I am completely sure will be reversed by the Storting," she said. According to Ms Venås the leaders of the three ruling coalition parties, Jan Petersen, Lars Sponheim and Valgerd Svarstad Haugland, are all opponents of the proposed change.
  (Klassekampen/Saturday)
• For those who already enjoy the benefits of health insurance through their jobs, medical treatment will become even cheaper. In the proposed national budget the Bondevik government has given this fringe benefit tax exemption. There are strong indications that those with health insurance push others further back in the queue for medical treatment. Special "health brokers" shop around at the various hospitals and ensure that those with insurance are quickly found an available place.
  (Aftenposten)

Today’s comment from Dagens Næringsliv

An important reminder appears in the second column on page 73 of the national budget. It reads: "Even with long-term additional foreign currency revenues in the form of returns on investment from the Government Petroleum Fund, the bulk of imports to Norway will have to be financed by earnings from exports of goods and services from mainland Norway also in the future. In the long term, therefore, the country’s cost competitiveness will have to be adjusted to meet the need to finance imports." Of course, the majority of people probably know this already, but the revelation in the budget that industrial salary costs are now estimated to be 32 per cent higher than in the countries against whom we compete could indicate the opposite. Changes in wage rates are a result of the economic policy pursued by the government of the day and negotiations between the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Business and Industry (NHO). In other words, the wages gap is about as large for manufacturing industry as for the shipping industry. However, industry has still not asked for "net wages" or similar schemes to compensate for high wage levels, like the shipping industry has done. Industrial leaders perhaps have more sense than their maritime counterparts. One of the diagrams in the budget also shows how wage rises and unemployment have developed through the 1990s, and the link is pretty clear. When unemployment rises, wage inflation falls, and when unemployment falls, wage rises get bigger. However, what comes first is not always easy to determine. Since higher unemployment up ahead has been forecast, there is nevertheless reason to hope that wage rises will become more moderate. While industry employed 24 per cent of the workforce 30 years ago, it now employs 12 per cent. That percentage will undoubtedly fall even further, but the policies of recent years cannot continue if we are to retain more than just a few feeble, insignificant remnants.