Jagland calls for new EU debate (Aftenposten)

Labour Party chairman Thorbjørn Jagland is a dyed-in-the-wool supporter of Norwegian EU membership. He wants Norway to tighten its links to Europe, but does not think that it would be enough to replace the Norwegian krone with the euro. "Of course, we could do as Svein Longva, chief executive of Statistics Norway, has suggested, but it would be politically unacceptable. It would make us a dependent territory under the other European countries. But all those issues would be resolved if we joined the EU as a full member. That is why this discussion must begin during the current parliamentary term," said Mr Jagland. Incoming Labour leader, Jens Stoltenberg said: "I have difficulty in seeing how the euro could be introduced in Norway without EU membership."

More disadvantages (Aftenposten)

Finance Minister Per-Kristian Foss believes Sven Longva is leading the economic policy debate up a blind alley with his suggestion that Norway should replace its national currency with the euro in order to solve the problems being experienced by the country’s export industries. "The euro scheme is not open to anyone other than EU members, and Norway is not a member. If we were to replace the Norwegian krone with a foreign currency, it would lead to more disadvantages than advantages. It is an alternative from which developed economies have never derived any benefits. We have had six years in which industry has negotiated more costly wage settlements than its competitors. You cannot wipe out the sins of six years with one stroke of the pen," said Mr Foss.

PIL says no to euro in Norway (Dagens Næringsliv)

The introduction of the euro would create more problems than it solved, according to Svein Thompson, head of public affairs at the Federation of Norwegian Process Industries (PIL). "We know that, so far, the change to a system in which the "spending rule" governs Norway’s fiscal policy, while an inflation target governs monetary policy has had a devastating effect on industries facing foreign competion. But even if we did join the euro scheme at an exchange rate which is ten per cent lower than today’s, with the same fiscal policy and a 50 per cent cut in interest rates, it would generate an enormous upsurge in demand. Wage inflation would skyrocket and the benefits would be eaten away in the course of three to four years," said Mr Thompson.

Coalition doubts about Carl I. Hagen’s willingness to do a deal (Dagsavisen)

The drama surrounding the budget negotiations has intensified. The coalition parties’ parliamentary leaders have now entered the stage in an attempt to find out if Progress Party chairman Carl I. Hagen is really interested in doing a deal. The coalition parties are uncertain about just how interested the Progress Party is in real negotiations. Despite two offers of concessions from the coalition parties, the Progress Party has still not moderated its demands, which total NOK 10 billion. "We have not backed down on anything. The coalition parties must put much more money on the table and offer more in the way of structural measures if the Progress Party is to be at all interested," said Mr Hagen.

More teachers but fewer lessons (Aftenposten)

Compared with schools in other OECD countries, Norwegian schools are blessed with few pupils per teacher, but children do not get the benefit in the form of correspondingly more teaching. On that score, Norway is well under average – particularly in the time spent on the basic skills of reading, writing and arithmetic. Norway is one of the countries which spends most money on compulsory education, and the starting salary for Norwegian teachers is better than average, according to the OECD report. "For me it seems to confirm the general picture. Norway uses a lot of resources on education, but other countries are catching up," said Education Minister Kristin Clemet.

Officers unaware of ban on controversial weapons (Dagsavisen)

In a letter to the Chief of Defence Staff Lt Gen Sigurd Frisvold in February last year, then Defence Minister Bjørn Tore Godal instructed that all use of weapons which are currently, or may in the future be, considered controversial must be cleared with the political leadership at the Defence Ministry. In reality this amounts to a ban on the use of such weapons as cluster bombs, unless express permission is given by the defence leadership. That instruction never reached those who organized the exercise in which Norwegian and Dutch aircraft dropped cluster bombs.

Call for clean-up at Norad (Nationen)

MPs are demanding that Norad take action to improve its routines for awarding development assistance grants, after they were savaged in a report from the Office of the Auditor General. "I am surprised that Norad’s routines are so inadequate. On a general level, confidence in Norwegian aid policy is totally dependent on such matters being put right, and that clear and unambiguous guidelines are instituted in respect of both the allocation of funds and the follow-up of grants," said Julie Christensen (Con), a member of the Storting’s Foreign Affairs Committee. Norad yesterday declined to comment on the Auditor General’s criticism of its routines.

A gift for Christian voters (Dagsavisen)

After a lengthy period languishing in the Conservatives’ budget shadow, the Christian Democratic Party chairman, Valgerd Svarstad Haugland, finally has some good news for her voters. The Government is proposing to substantially increase the size of tax-deductible donations to charity. And 26 out of the 44 eligible charities and voluntary organizations are Christian. Today you can deduct from your taxable income the money you give to the Norwegian Church Ministry of Israel, the Oslo Christian Centre or the Norwegian Christian Mission, but not donations to the Norwegian Humanist Association or the Norwegian Society for the Conservation of Nature.

Likelihood of complete ban on cod fishing (Aftenposten)

It now seems almost certain that Norway and the EU will impose a complete ban on cod fishing in the North Sea. Fisheries Minister Svein Ludvigsen (Con) said yesterday that Norway is prepared to take the same steps as the EU to save cod stocks. Mr Ludvigsen refused to say when a Norwegian ban was likely to be introduced. "We are now going to negotiate with the EU, but it is clear that the plans launched so far have not been sufficient to save cod stocks. Under such circumstances it is also clear that the Norwegian authorities will not be a stumbling-block," he said.

Statoil wins Persian Gulf contract (Dagbladet)

The Norwegian oil company, Statoil, has signed a contract giving it responsibility for the construction of three gas platforms in the Persian Gulf. Statoil has plans for further investment in Iran, including the development of the country’s oil fields. The contract with the Iranian company, Petropars, gives Statoil up to 40 per cent of the development phases six, seven and eight in the gigantic South Pars gas project. No other Norwegian company has so far been awarded contracts in connection with the project.

Worth Noting

• "I have not exactly proposed that we should introduce the euro in the short term. I have stated that we have a problem, and that we must start looking for possible solutions," said Svein Longva, chief executive of Statistics Norway.
  (Dagens Næringsliv)
• The number of civil service jobs located in the Norwegian regions has been cut by six per cent over the past 20 years. During the same period the total number of civil service jobs has increased by 14 per cent.
  (Nationen)
• 350,000 Norwegians, or 15 per cent of the workforce, say they are burnt out. Psychiatrist Bjarte Solberg says that people must take responsibility for themselves and not blame work when they feel exhausted and depressed.
  (Dagbladet)
• Minister of Justice Odd Einar Dørum has rejected calls for a separate commission of inquiry to investigate whether the Sami people have been kept under surveillance on the grounds of their ethnicity. Such a commission had been demanded by the Sami Assembly and its President, Sven-Roald Nystø. "The Norwegian state’s apology will be left hanging in mid-air without a commission of inquiry," said Mr Nystø.
  (Klassekampen)
• Every year Norwegian shops lose goods valued at NOK 4 billion to shoplifters. Shoplifters prefer meat, beer, children’s clothes and expensive adult clothing. Around 200,000 cases of shoplifting are reported to the police each year by Norwegian shops.
  (Stavanger Aftenblad/Dagbladet)
• Office space to the tune of NOK 12 billion is standing empty in the country’s four largest cities. There are probably around five million square metres of empty business premises in Norway.
  (Dagens Næringsliv)
• The interest rate charged by the State Educational Loan Fund is one percentage point higher than the market rate. This "punitive interest rate" is meant to cover the debts left by the Fund’s bad customers. According to the National Union of Students, this practice verges on robbery by the state. And the Fund itself is partly in agreement – the interest rate margin should be one half percentage point lower, as it is on loans from the Norwegian State Housing Bank.
  (Aftenposten)
• Petroleum and Energy Minister Einar Steensnæs (Chr.Dem) wants to extract every last possible drop of oil from the North Sea, and has invited offers for most of the marginal areas on the Continental Shelf. Oil companies can choose between 109 blocks or parts of blocks in the 2002 round of bidding.
  (Dagbladet)
• Every fourth potato on sale in Norwegian supermarkets is of such poor quality that it should be thrown away, according to a nationwide survey.
  (Verdens Gang)

Today’s comment from Verdens Gang

Something has to be badly wrong with the country’s economic policy when the head of Statistics Norway, Svein Longva, apparently with complete seriousness, proposes that we get rid of the Norwegian krone and introduce the EU’s common currency, the euro, even though we are not members of the union. Mr Longva obviously believes that Norway’s monetary policy has failed dismally. The Norwegian krone is now so strong that a dramatic reduction in industrial activity is already in full swing. Unemployment looms, and with increased unemployment comes the almost inevitable demand for an even bigger rise in public spending, financed by siphoning off more of the country’s oil revenues. The whole point of having such a high interest rate was to slow down inflation and thereby avoid rapid cost growth and declining competitiveness. Instead it is now the high interest rate which is undercutting competitiveness because it has driven the exchange rate through the roof. Nevertheless, the introduction of the euro – and in consequence European interest rates – would not in itself have helped Norway. It would have been too low for Norway, would have increased the squeeze on the economy, raised inflation and intensified some of the other damaging effects we are currently battling with. Does that mean we are left totally without any solution to the problem? No, of course not. If the politicians could just raise enough courage to pursue a tighter fiscal policy there would be room for a significant cut in interest rates, without it driving prices even higher. The problem lies in the voters’ demands for more and more money to be spent on good causes in the public sector, and the politicians’ tendency to give in to those demands. In addition, in the past few years we have granted ourselves such large wage rises that that in itself has contributed to our malaise.