LABOUR PARTY SAYS YES TO VAT INCREASE (Dagsavisen)

The Labour Government is prepared to say yes to increased VAT. This paves the way for a budget agreement with the centre alliance parties. Sources close to the Cabinet say that they have already discussed and accepted the proposal for increased VAT. "We will have to go through the Government’s budget and look at what changes we want to see made. We then expect Labour to contact us, and that we will start preliminary talks which can lead to real negotiations," says Christian Democrat chairman Kjell Magne Bondevik.

NO CLARIFICATION OF BUDGET RESULT BEFORE PARTY CONFERENCE (Aftenposten)

Jens Stoltenberg will have to go to the Labour Party Conference without knowing the outcome of the national budget negotiations or the ultimate fate of his government. In the Storting, the parties are busily laying their strategies for the negotiations over next year’s budget. The first verbal skirmish is due to start this coming Tuesday, in the debate on the Speech from the Throne, which will take two whole days.

CENTRE PARTY NOT GUNNING FOR POWER (Aftenposten)

"It is too early to say if there is a basis for budget negotiations between Labour and the centre alliance," said Centre Party chairman Odd Roger Enoksen following the party’s central committee meeting yesterday. But he added: "Fundamentally, a basis does exist." He underlined that the Centre Party "is definitively not gunning for power." "The Labour Party needs to learn the difference between cooperation and subjugation," said Mr Enoksen.

GREEN LIGHT FOR GAS POWER (Dagsavisen)

At a press conference today the Ministry of the Environment will announce that it has changed Naturkraft’s emissions licence so that the two gas-fired power stations planned for the west of Norway can be built using existing technology. With this announcement the building of the controversial power stations, which caused the downfall of the Bondevik government last March, can go ahead. However, environmentalists claim that the decision is unlawful and are threatening to battle the issue through the courts.

GAS-FIRED POWER STATIONS COULD LEAD TO JENS’S DOWNFALL (Verdens Gang)

The centre alliance parties plan to force Jens Stoltenberg into a total and humiliating retreat over the gas-fired power station issue. If he does not back down, it could lead to a change of government. This is the political time-bomb that the centre alliance has slipped into the budget negotiations with Labour. "The gas-fired power station issue soured relations between Labour and the centre when we had to resign. And matters are not improved by the Government not making any demands with regard to CO2 emissions," says former prime minister Kjell Magne Bondevik.

MAJORITY IN 292 LOCAL COUNCILS

If today’s opinion polls had been the results of local elections, Carl I. Hagen and the Progress Party would have four times as many representatives on local councils as it has today. A survey shows that the Progress Party would be the majority party in 292 of the country’s 435 local council areas. The Labour Party would be largest party in 91 local councils, the Centre Party in 22, the Christian Democrats in 16, while the Conservatives, Liberals and the Socialist Left Party would have a majority in one local council each.

BUREAUCRACY TO COST NOK 10 BILLION MORE NEXT YEAR (Aftenposten)

The civil service will cost NOK 10 billion more to run next year, despite the Government’s promise to modernise it. Next year, operating expenses for salaries and the purchase of goods and services for government-run offices will reach NOK 97.3 billion. One of the areas where operating expenses are rising most is, paradoxically, the defence forces – one of the biggest losers in the current budget battle.

IT’S ALL FALLING APART (Dagbladet)

Åge Korsvold’s career at the top of Norwegian business life is falling apart at the seams. He has already had to resign as a director from a number of boards, and next week he will probably be thrown out of Orkla. And all because, as CEO of Storebrand, he got himself involved in three highly questionable stock option deals. The Banking, Insurance and Securities Commission has already dubbed the stock option agreements unlawful, and may send the case to the National Authority for Investigation and Prosecution of Economic and Environmental Crime.

WORTH NOTING

• This coming Tuesday Storebrand’s Corporate Assembly will decide if board chairman Jon R. Gundersen and the rest of the board will be allowed to stay on, following the scandal surrounding Åge Korsvold’s stock options. "If there has been a breach of the Securities Trading Act in a company, it is the board’s responsibility," says Banking, Insurance and Securities Commission Deputy Director General Eirik Bunæs. (Dagbladet)

• Storebrand’s chairman Jon R. Gundersen thought that Åge Korsvold’s golden handshake was not good enough. That is supposedly why the two men agreed that Storebrand should pay for the renovation of the house Mr Korsvold kept when he had to resign. (Aftenposten)

• "Åge Korsvold’s sacking from Storebrand may have a salutary effect on the rest of Norwegian business," says Torger Reve, vice-chancellor of the Norwegian School of Management. He is concerned that the public will form the impression that there is a lot of shady dealing in Norwegian commercial life. (Vårt Land)

• "A declaration of war" and "threat of more bankruptcies" was the response from business leaders to the Finance Minister’s proposed business cycle tax of 1.5%. Now it seems that Storebrand could have paid its whole share of the much-hated tax by halving the size of Åge Korsvold’s golden handshake. (Nationen)

• Hotel industry employers and employees have joined forces in protesting against the proposal to impose VAT on hotel bills. "VAT will encourage dishonesty in the industry," says Norwegian Confederation of Trade Unions leader Jens Hoel. (Dagsavisen)

• Finance Minister Karl Eirik Schjøtt-Pedersen has NOK 150 billion in foreign exchange reserves invested abroad. He now says he wants a better return on this investment and has asked the Norwegian Central Bank (Norges Bank) to invest some of the reserves in the stock market. This could give billions of kroner in extra profit. (Dagens Næringsliv)

TODAY’S COMMENT FROM VERDENS GANG

This autumn has turned into a nightmare for the Norwegian financial and business sectors. In a few short weeks the media have uncovered shady dealings, cronyism and law-breaking at all levels – from small fry in the unlisted shares market, right to the very top of our largest public companies. Even state agencies have contributed to the impression of a shameless culture of greed, where senior executives act as though neither ethical norms nor actual legislation applies to them. Yesterday Halvor Stormoen, chief executive of Statsbygg, the state-run building contractor, was forced to resign because he had given lucrative contracts to old friends. He no longer had the confidence of the Labour and Government Administration Minister, Jørgen Kosmo. Storebrand boss Åge Korsvold has given this culture a public face, with his astonishing mixing together of professional and private affairs.. His fall from grace has been dramatic, not only for himself, but for the entire financial and business sector. We gladly support calls for business leaders to clean up their act, but have little faith that such calls will be effective. Even though the problem seems to be particularly prevalent in the financial sector, the rest of the business world has not shown much interest in putting an end to it. For that reason they only have themselves to blame for the fact that politicians are now looking to introduce stricter rules and regulations. Trust has worn thin and sympathy is non-existent.

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