The Royal Ministry of Foreign Affairs,
Oslo Press Division

Norway Daily No. 104/00

Date: 5 June 2000

BREAK BETWEEN LABOUR AND CENTRIST ALLIANCE (Aftenposten-Saturday)

There will be no further budget negotiations between Labour and the centrist alliance. The parties are too far from each other politically, in the view of the centrist parties. The Storting’s Finance Committee will meet today and tomorrow to discuss the Revised National Budget. The committee has until Wednesday to find out how to accommodate the Government’s proposed cutbacks, which add up to around NOK 3.5 billion.

CENTRE PROPOSES TO TAX DIVIDENDS (Dagsavisen-Saturday)

The Centre Party, taking a new direction on tax policy, proposes a tax on dividends which would bring in billions of kroner. This has brought the party closer to Labour and the Socialist Left, but it has caused discord within the centrist alliance. After tax policy talks in the executive committee, party chairman Odd Roger Enoksen now calls for increasing state revenues by several billion kroner through a double taxation of dividends.

FOOD PRICES TO COME DOWN (Verdens Gang-Saturday)

Behind closed doors in Brussels, the Stoltenberg Government has offered a proposal which could make food cheaper and farmers fewer in Norway. According to the proposal, Norway will commit to a substantial reduction in duties on food imports from EU countries. The Government made this play at a meeting with the EU Commission last Monday. Lower duties will make things much tougher for Norwegian farmers and the Norwegian food processing industry. The agricultural settlement, which currently has farmers up in arms, is peanuts compared to the Government’s proposal to effectively dismantle trade barriers on food products.

NORWEGIAN FARM SUBSIDIES FALLING BEHIND (Nationen-Saturday)

Figures from the OECD show that agricultural supports are on the rise in other countries while Norwegian farm support is dropping. The Norwegian Government offered a proposal yesterday which would reduce total farm incomes by NOK 400 million. The USA, on the other hand, has raised farm subsidies by over 70 per cent in the past two years.

UNEMPLOYMENT RISING (Dagens Næringsliv-Saturday)

The ranks of the jobless are swelling again. While Finance Minister Karl Eirik Schjøtt-Pedersen and central bank Governor Svein Gjedrem are afraid the economy will overheat, recent statistics show unemployment heading up. The Directorate of Labour presented figures yesterday showing that 59,600 people, or 2.6 per cent of the labour pool, are now registered as out of work.

IT INDUSTRY FACES SHORTAGE OF QUALIFIED WORKERS (Aftenposten)

Generous stock options, aggressive headhunting, transition pay, luxury trips, imaginative perks and sky-high salaries—IT enterprises use every trick in the book to entice competent people to come and stay. Norway can expect a shortage of around 50,000 IT professionals by 2003. New and creative methods are continually being developed to attract the best ones.

WORTH NOTING

• The Government stepped in yesterday and declared that the strike among auxiliary nurses and caregivers in Oslo is now subject to compulsory arbitration. The Government takes the view that the planned escalation of the strike at Ullevål Hospital would lead to an unacceptable situation. (Dagbladet-Sunday)
• The Government approved the new Pharmacies Act yesterday and at the same time gave the green light for the opening of new pharmacies. The owners of Norway’s existing pharmacies have already formed a pharmaceuticals chain to meet the competition which is expected to start immediately. (Aftenposten-Saturday)
• The National Insurance Fund requests a freer position to escape the limitation of trading only on the Oslo Stock Exchange. Director Tore Lindholt believes there is more to be gained by allowing the Fund to trade on the other Nordic stock exchanges as well as in unlisted equities. (Dagens Næringsliv)
• Holiday pay is higher than ever before this year. NOK 58 billion will soon be paid out, while interest rates rise slowly and Finance Minister Karl Eirik Schjøtt-Pedersen calls for moderation. (Dagbladet-Saturday)
• Two and a half months after Labour replaced the former centrist coalition Government, Kjell Magne Bondevik (Chr.Dem.) is much more popular than Prime Minister Jens Stoltenberg (Labour), according to a recent poll conducted by Norsk Gallup for Verdens Gang. 58 per cent feel Mr. Bondevik is doing a good job, while only 48 per cent feel the same about Mr. Stoltenberg. (Verdens Gang-Saturday)

TODAY’S COMMENT from Aftenposten

The spring session of the Storting is drawing to a close, and the work going on in the Finance Committee on the Revised National Budget recommendation seems to warn of a difficult autumn ahead for the Stoltenberg Government. Last year’s budget compromise between Labour and the Bondevik Government will not help the present Government get the Revised National Budget through the Storting, and the distance between the Stoltenberg Government and the opposition will most likely do nothing but grow as next year’s general election approaches. The Government faces an unruly parliamentary situation on top of growing unrest within its own ranks. The failure of the party leaders’ Statoil strategy is probably only a foretaste of what the Government can expect if it really goes ahead with its plans to modernize, innovate and rationalize the public sector. We may soon see proof that the unions together with certain elements within the Labour Party represent a type of conservatism that is not easily overcome. And the party leaders’ unabashed enthusiasm for the EU will stir up Labour’s own anti-EU faction. The 2001 Fiscal Budget to be presented in October, followed by the Labour national convention in November, will present major challenges to Mr. Stoltenberg and his Government. Taken together, defeat on the Statoil issue, an uncertain EU strategy, open opposition to the Government’s modernization plans at the national convention and a budget turned down by the entire opposition could be more than the Stoltenberg Government can handle as an election year approaches.