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

Norway Daily No. 109/03

Date: 12 June 2003

From maximum price to flexible price (Aftenposten)

Everybody gave up a little on the way to a deal on pre-school day care reform. In the end it could be parents and their children who have to give up the most. The aim of introducing a fixed price cap on nursery fees could be jettisoned if it threatens to prevent the creation of enough places for all. Nurseries which are close to bankruptcy will also be allowed to get around the price cap. And nurseries could demand higher fees than the official maximum if parents agree in order to give their children day-care provision over and above the norm. The annual bill for the agreement on pre-school day care will be just over NOK 3 billion. "Obviously, with this agreement we have cleared one problem out of the way," said Prime Minister Kjell Magne Bondevik with satisfaction. The Government now sits a little more firmly in the saddle. Both the ruling coalition parties and the opposition could claim a victory. The Government refused to back down on its aim of securing a nursery place for all, before reducing fees. The opposition refused to back down on the principle that a price cap should be introduced.

Stoltenberg refuses to talk about EU (Nationen)

Labour leader Jens Stoltenberg is refusing to accept the challenge issued by Centre Party leader Åslaug Haga and the Socialist Left Party’s Ågot Valle and publicly state his views on key EU issues such as economic and monetary union. "We currently have a discussion underway within the party, which will conclude in the spring of 2005. I do not want to tie the party down by expressing my own views," said Mr Stoltenberg. Johan P. Olsen, head of research at the European research programme Arena has accused Mr Stoltenberg of acting irresponsibly by not answering.

Power companies made a fortune out of last winter’s electricity crisis (Dagbladet)

Norway’s power companies made a fortune out of last winter’s electricity crisis. The figures show that the power companies were quick to raise prices, but have been slow to bring them down again. Power suppliers must give two weeks notice of any increase in the prices they charge. For a couple of weeks before the end of last year, the country’s electricity consumers could therefore enjoy electricity prices that were below the market price. But then the power companies realized what was happening and exacted a gruesome revenge. They increased prices faster than they have since cut them. The price being charged to private consumers was kept at a high level far longer than the market price. The biggest price difference (margin) occurred during period with the heaviest consumption. According to the Norwegian Water Resource and Energy Administration (NVE), the level of prices being charged to private consumers has stayed sky-high over the market rate since the middle of January. It is only in the past few weeks that margins have fallen to anything approaching normal levels.

Electricity flowing out of the country (Nationen)

Despite a wet early summer, the level of water in the country’s hydro-electric power reservoirs is 20 per cent lower than normal. Nevertheless, electricity is being exported every day. Electric power is all about money, and knows no national boundaries. Whoever pays the most, gets the electricity – regardless of whether he is Swedish, Danish, German or Norwegian. "Electricity goes where there are customers willing to pay for it. Norwegian power companies export electricity to Sweden and Denmark every day, but we also import electricity from our neighbours," said Knut Lockert of Statnett. Norwegian electricity is part of an integrated Nordic system, in which electric power travels back and forth between the Nordic countries. In the past month we have imported more electricity overall than we have exported. But last week the trend reversed. Yesterday alone, Norwegian power companies exported a total of 16,562 MWh. In the last week we exported 125,679 MWh and imported 46.169 MWh.

Control more important than national ownership, says Steensnæs (NTB)

National ownership is important, but the most important thing is to have control over the country’s natural resources, said Petroleum and Energy Minister Einar Steensnæs (Chr.Dem) during a meeting to debate state regulation of the electricity market on Wednesday evening. "In my opinion, and that of the party, strong national ownership of the electricity sector is important. But even more important is national control of our resources," said Mr Steensnæs at a meeting in Oslo Arbeidersamfunn yesterday. He pointed to the Government’s proposal, giving the state the right to take over all power stations after a period of 75 years, as a way of ensuring control over those resources. The purpose of the meeting on Wednesday evening was to discuss the planned sale by Oslo City Council of its 53 per cent stake in the power company Hafslund and the question of state regulation of the electricity market.

Labour’s unemployment package rejected (Dagsavisen)

The Labour Party has proposed spending NOK 1.2 billion on a package of measures to combat rising unemployment. But only a fraction of this package will win majority backing in the revised national budget. The opposition parties are so divided that the Government can emerge relatively unscathed from the budget negotiations. The Newspapers’ News Agency (ANB) has reason to believe that the Government has so far only had to accept an increase in the budget of NOK 700-800 million. The question is whether the ruling coalition parties have hitherto unannounced cuts up their sleeve. We will find out today or tomorrow. The Storting will not have to make up its mind on the revised national budget until next Friday. Only then will it become clear whether Prime Minister Kjell Magne Bondevik will have to demand a vote of confidence in his administration to push through a ‘responsible budget’. Substantial budget overruns will not be accepted.

Foreign Ministry sends reminder to Jordan over Krekar case (Aftenposten)

The Norwegian Foreign Ministry has sent a reminder to the Jordanian authorities asking for further information on the drug case in which Mullah Krekar is alleged to have been involved. Chief Public Prosecutor Lasse Qvigstad has previously rejected a request from Jordan for Krekar’s extradition. Law professor Ståle Eskeland regards the Norwegian initiative as curious. "It is Jordan which has asked for Krekar to be handed over. If Jordan does not provide documents substantiating its allegations, the proper reaction would be to set the extradition request aside. I cannot imagine that Norway has any honourable reason for actively requesting Jordan to send the information that could provide the basis for an extradition order," said professor Eskeland.

1. Worth Noting

• The British weekly magazine, The Economist, believes Norway could apply for membership of the EU shortly after 2005, a prediction supported by Norwegian economics experts. The respected British weekly basis its belief that Norway will soon apply to join the EU again and that a majority of Norwegians will this time vote in favour of membership on conditions both within Norway itself and in Europe. The Economist points to three possible reasons: high food prices in Norway, an expensive EEA Agreement, and the expansion of the EU to include countries in eastern Europe.
  (Dagsavisen)
• Norwegian retail spending across the border in Sweden continues to grow apace, despite the fall in the value of the Norwegian krone (NOK). In the Strömstad region of Sweden alone, Norwegian retail spending amounted to NOK 725 million in cash during the first four months of the year. This is a rise of NOK 110 million.
  (Aftenposten)
• The Norwegian Postal Administration has developed a new identity card for Norwegian citizens, which it hopes the Ministry of Justice will approve as a Schengen ID card. The Postal Administration hopes the new card will make it possible for Norwegians to travel within the Schengen area without a passport.
  (Dagsavisen)
• Norwegian salmon is flooding into the EU after the abolition of minimum price regulations at the end of May. The export price of fresh farmed salmon fell to a new low last week. The minimum price agreement meant that Norwegian salmon was shut out of the EU market because the market price was lower than the agreed minimum price for Norwegian salmon.
  (Dagens Næringsliv)
• The Svalbard District Governor has given the company Store Norske Gull AS permission to carry out exploratory drilling for gold at Svansen, an area close to New Ålesund on Svalbard.
  (NTB)
• Labour and Government Administration Minister Victor D. Norman has caused a stir among the political parties represented in the Storting after he asked a private law firm to analyze the effects of a proposed amendment to the country’s competition legislation. The parties are angry that the minister hired private lawyers to carry out an expensive quick-fire analysis to provide him with counter-arguments to the parliamentary majority’s proposal.
  (Dagens Næringsliv)
• "Goods from the occupied Palestinian territories are stolen property," according to Dag Øistein Endsjø, a senior lecturer at the Norwegian University of Science and Technology (NTNU). He has filed charges against the Reitan retailing group, which sells such goods, for alleged violation of the law on receiving stolen property.
  (Klassekampen)

2. Today’s comment from Dagsavisen

After a lengthy dispute between the opposition parties and the Government over pre-school day care reform, agreement was finally reached yesterday. This is good news for parents with small children, and puts a much-needed patch or two on our elected representatives’ increasingly threadbare credibility. When the opposition parties voted through their pre-school day care reform package, they ran roughshod over the Government in a way never before seen. In our opinion, the Government should have put its foot down there and then, choosing to resign rather than come limping back to the Storting pleading for renewed discussion. But it is no use crying over spilled milk. The time has come to look forward. The most difficult task remains to be done. The political decision now has to be put into effect. Only time will tell whether it is possible to provide pre-school day care for all at an affordable price. If not, it will only feed the already smouldering contempt in which our politicians are held. This spring’s parliamentary session will go down in history as one of the most chaotic and difficult ever. Like the agreement on pre-school day care, the process of revising this year’s national budget has not exactly been a textbook example of parliamentary etiquette. The Government should not have come back to the Storting with an invitation for a rematch on previous parliamentary resolutions. It is also unheard of for the Government to try and diddle the country’s pensioners by proposing a lower rise than the Storting had already expressly voted through. If the Government is currently receiving a drubbing at the hands of the Storting, it must take part of the blame for that itself.

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