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

Norway Daily No. 82/03

Date: 2 May 2003

Government under attack on May Day (NTB)

The Government, and in particular its Conservative contingent, is doing too little to halt the rise in unemployment. That was the message from keynote speakers at May Day rallies up and down the country on Thursday. "When we celebrated May Day last year, 70,000 people were out of work. That figure has now climbed to 100,000. This is not a statistical problem, as Conservative Finance Minister Per-Kristian Foss and a number of business leaders have put it. Unemployment is about people; people who are struggling to maintain their self-esteem, and who are being made to feel that they are worthless," said Gerd-Liv Valla, president of the Norwegian Confederation of Trade Unions (LO). "Facile criticism," retorted Prime Minister Kjell Magne Bondevik. "This is an international phenomenon. Unemployment is actually rising faster in neighbouring countries, countries with social democratic parties at the helm, such as Sweden and Germany." Addressing a rally in Fredrikstad, Labour leader Jens Stoltenberg slammed the Government for not taking the growing level of unemployment seriously. Mr Stoltenberg’s main message, however, was a call for greater public intervention in the energy sector. Socialist Left Party leader Kristin Halvorsen was in the industrial town of Høyanger in Sogn, where she attacked Norsk Hydro’s management for shilly-shallying over whether to invest in new smelting equipment at the town’s biggest employer. At the same time, she called on the PM to break with the political right. Progress Party chairman Carl I. Hagen gave the Government his short-term support from the podium in Trondheim’s town square. According to Mr Hagen, the PM "deserved" to stay in office a while longer. "At least until after the summer holiday. Then we will see," was Mr Hagen’s cryptic comment.

Kristin Halvorsen keen for new tripartite coalition (Aftenposten)

Socialist Left Party leader Kristin Halvorsen used her May Day speech to send a clear message to the Christian Democratic Party. "Dear Kjell Magne and dear Valgerd, you have got yourselves into bad company. But forgiveness can be found for everything," she said at the May Day rally in Høyanger. If the Christian Democrats switched sides, said Ms Halvorsen, she would not rule out the possibility of a new tripartite coalition government taking office before the next general elections in 2005. According to the Socialist Left Party leader, many Christian Democrats have said they want to tear themselves away from the Conservative Party and form an alliance with the political left. Asked whether the Socialist Left Party was ready to form a government right now, Ms Halvorsen replied: "It is not a particularly welcome thought unless the Christian Democrats switch sides. We hope that the Christian Democrats will switch sides before 2005. We are ready to collaborate with the Labour Party and the Christian Democratic Party in order to achieve a parliamentary majority. What form that collaboration might take, is something we will have to come back to."

PM says he is ready to resign (Dagbladet)

Prime Minister Kjell Magne Bondevik is prepared for the fact that this spring’s haggling over the revised national budget could end in his government’s resignation. "The most important thing the Government can do to fight unemployment is to remove the causes of unemployment," he said. "That is why the revised national budget must be given a responsible economic framework. Low interest rates and exchange rates are the principle tools to achieve this. I think it is possible to reach an agreement with the opposition. But that presupposes that the parties in the Storting have an open mind when we sit down to negotiate. I do not know if I will still be Prime Minister when the revised national budget is finally adopted next month. I hope we can get through this spring, but I have a relaxed attitude to that particular problem," said Mr Bondevik.

Norwegian consulate searched in hunt for terrorist (Aftenposten)

The Norwegian consulate was one of the places searched in the long and intense hunt for suspected Palestinian terrorist Abu Abbas in Baghdad. The Norwegian Consul was not informed about the operation, which is thought to have been led by US troops. According to eye-witnesses, more than twenty armoured personnel carriers and tanks rolled into the street where the Norwegian consulate is located. The Norwegian authorities were only told about the search, which took place in the early hours of 15 April, on Wednesday of this week. "We would consider it extremely serious if anyone had violated the consulate’s diplomatic immunity," said a Foreign Ministry official. Kåre Eltervåg, a spokesman for the Foreign Ministry, could not say how Norway would react if it was confirmed that the USA had violated the sovereignty of Norway’s diplomatic mission in Baghdad.

NHO makes guaranteed pensions a thing of the past (Dagens Næringsliv)

Employees of the Confederation of Norwegian Business and Industry (NHO) will no longer be offered a guaranteed pension entitlement. The NHO is introducing a new pension scheme and wants its member companies to follow its lead. The Norwegian Confederation of Trade Unions (LO) is dubious about the change. "We are not doing this necessarily to squeeze anyone. We are doing it to get as much control as possible over our costs," said Jan Clausen of the NHO. From 1 January next year the NHO will introduce a new pension scheme for all newly hired employees. Unlike today’s scheme, which guarantees employees a pension amounting to upwards of 66 per cent of their final salary, new NHO employees will join a scheme in which they must bear the risk themselves. This is known as a money-purchase scheme. The NHO has thereby become the standard-bearer for a scheme which many union members feel is less advantageous than that which they have now, and which is the dominant type of pension in Norwegian business life.

Contrite Research Council to launch full review of grants allocation procedure (Aftenposten)

The way the Research Council of Norway has handled its own rules governing conflict of interest has been strongly attacked by the council’s competency and complaints commission. 15 projects which failed to win financial support could have their applications re-evaluated. "We are genuinely sorry. For us it is a matter of honour to have a thorough and correct evaluation process," said Christian Hambro, leader of the Research Council of Norway. The council’s competency and complaints commission ruled that people who have themselves applied for research grants were not allowed to determine the fate of competing applications. The commission’s criticism was aimed at the failure of the maritime research grant allocation board to ensure that its evaluation process was free from conflict of interest. However, all the council’s grant allocation boards will now probably come under investigation.

Lottery fund grants not equally distributed (Nationen)

There are major differences in the proportion of the money spent locally on the Norwegian National Lottery that is ploughed back into local sporting facilities. While sports organizations in North Trøndelag receive 10 per cent of the cash local residents spent on the lottery last year, sports organizations in Østfold receive only three per cent of the amount the county’s residents spent on the lottery. "The Ministry should consider whether lottery revenues could be included as one of several criteria for the allocation of local funds," said Toril A. Johansen, organization manager of the Østfold Sports Association.

Oslo’s immigration police flat broke (Verdens Gang)

Local Government and Regional Affairs Minister Erna Solberg’s plan to repatriate Iraqi asylum seekers could be derailed by a lack of cash. The cupboard is bare at the Oslo police force’s asylum unit. The deportation of foreign nationals whose applications for asylum have been turned down will be cut to a minimum from next week and until further notice. Only selected criminals, in other words those convicted of serious offences, will be escorted out of the country. This covers only a tiny proportion of the many thousands whose applications for leave to stay in Norway have been turned down. According to the Police Directorate, there are 200-400 convicted foreign nationals in Norway who should have been deported. The real figure is probably much higher. The costs arising from these individuals amount to several million kroner each month.

Controversial Hafslund acquisition to be raised in the Storting (Dagsavisen)

Labour leader Jens Stoltenberg and Progress Party chairman Carl I. Hagen have both said they will not sit still and watch Norway’s largest electricity producer be sold into foreign hands. Both want the Norwegian state to purchase a stake in the company. Hafslund, which has acquired a number of local electricity companies, including Viken energi, owns nine power stations that supply electricity to around 800,000 households in the southeastern region. The Oslo City Council is the company’s largest shareholder, with more than 50 per cent of the shares. But the city’s administration wants to sell, and its decision has the backing of the majority of city councillors.

1. Worth Noting

• At the Norwegian Central Bank’s interest rate conference on Wednesday, interest rates were cut by 0.5 percentage points, and Central Bank Governor Svein Gjedrem indicated that further cuts could be in the offing. He is dependent on the exchange rate falling still more, if his target of 2.5 per cent inflation in two years’ time is to be reached. Senior economists in the financial industry believe the next cut in interest rates will come when the Norwegian Central Bank meets again at the end of June.
  (Dagens Næringsliv)
• On Wednesday, the Norwegian Central Bank cut interest rates by 0.5 percentage points. This means that in the past four months, the Norwegian Central Bank has cut the interest owed by private households, businesses and local authorities by an annualized NOK 33 billion, more or less. Though this assumes that all lenders adjust their interest rates accordingly. Figures from the Norwegian Central Bank show that at the end of March, total outstanding debts amounted to NOK 1,756 billion. However, around NOK 110 billion of this total is made up of foreign currency loans that are not directly affected by the cut in Norwegian interest rates.
  (NTB)
• Norway comes in third place in an overview of average hourly wages for European workers. Norway also has the smallest difference in salaries between workers and top executives.
  (NTB)
• Progress Party deputy leader Jon Alveim is disappointe0d over the Bondevik government’s attitude to the Progress Party. For this reason he believes the Government will not outlive the autumn.
  (Vårt Land)
• Labour’s Karl Eirik Schjøtt-Pedersen is surprised that Prime Minister Kjell Magne Bondevik (Chr.Dem) now says he wants to increase funding for the Norwegian Industrial and Regional Development Fund (SND). In his May Day speech, Mr Bondevik said that increased SND funding is one of the measures the Government will revisit in its proposal for a revised national budget. "It is good that Mr Bondevik has picked up on this, but one of the reasons for the growth we have seen in unemployment is that the Government has not wanted to use the SND as an active tool. On the contrary, the Government has slashed allocations to the SND," said Mr Schjøtt-Pedersen in an interview with NTB.
  (NTB)
• More than half of primary school children with a minority language background have made little or no educational progress after four years at school, according to a recent report commissioned and financed by the Research Council of Norway.
  (Dagsavisen)
• Carl I. Hagen has said that he intends to make a decision on whether to step down as Progress Party chairman and hand the party leadership to another at around Christmas time. As always, his wife Eli Hagen will be his most important adviser. Mr Hagen is not up for re-election at the Progress Party’s 30th anniversary national conference in Tønsberg this coming weekend.

2. Today’s comment from Dagbladet

Not unexpectedly, unemployment was the hottest issue at yesterday’s May Day rallies. The situation is serious. In the past year, over 30,000 more people have become unemployed – many of them young people. That Progress Party chairman Carl I. Hagen wants to cut company taxes and pump more money into the economy is as unsurprising as it is devoid of solidarity. Prime Minister Kjell Magne Bondevik’s declaration that combating unemployment is job number one is all well and good, but while the task remains in the lap of the Conservatives and the Progress Party there is reason to doubt his ability to do just that. It was Gerd-Liv Valla, president of the Norwegian Confederation of Trade Unions (LO), who was most specific yesterday. She focused particularly on the plight of the young unemployed. It is, and always will be, a disaster for the individual and for society as a whole when young people go straight from school to the unemployment line. There are many considerations that must be taken into account when putting together the revised national budget, but the PM should, at the very least, remember his own words about what the Government’s most important task is.