The Royal Ministry of Foreign Affairs,
Oslo Press Division

Norway Daily No. 97/00

Date: 23 May 2000

KREDITKASSEN UP FOR SALE (Aftenposten)

Despite months of study by the Government Bank Investment Fund, Finance Minster Karl Eirik Schjøtt-Pedersen has acted: the Bank Investment Fund is taken off the project and the government’s Kreditkassen holdings, amounting to a 34.6 per cent stake, are to be sold on the open market. The sale is broadly supported in the Storting. With the sale going to the highest bidder, it cannot be taken for granted that MeritaNordbanken’s bid will be successful.

KREDITKASSEN POSITIVE TO SALE (Dagens Næringsli)

Kreditkassen’s management, board chairman Harald Arnkværn and group CEO Tom Ruud all welcome the decision by the Government decision to sell off its Kreditkassen holdings. Christian Sveaas, who owns a 3.6 per cent stake, is also pleased. The sale could net the state as much as NOK 10 billion. A number of analysts anticipate that competitive bidding could take Kreditkassen stock as high as NOK 50 per share. The current bid from the Swedish-Finnish MeritaNordbanken is NOK 2.50. Finance Minister Karl Eirik Schjøtt-Pedersen says this is not enough; he would like to see MeritaNordbanken make a better offer, but price will not be the only consideration to decide the sale.

DnB WILL PUSH PRICE UP (Verdens Gang)

Den norske Bank (DnB) chief Svein Aaser holds the key to the bidding contest for the Kreditkassen. Whoever buys the Kreditkassen must satisfy Mr. Aaser, and that will not come cheap. The DnB bought a 10 per cent stake last winter, which, under Norwegian law, is enough to block an acquisition. Mr. Aaser is obviously pleased with Finance Minister Karl Eirik Schjøtt-Pedersen’s declaration that MeritaNordbanken’s bid is not good enough. The Government now wants a round of bidding; the DnB has on previous occasions demonstrated its ability to push bidding prices up.

CENTRE WITHDRAWS OPPOSITION TO SALE (Aftenposten)

The Centre Party, which until now has opposed the sale of Kreditkassen, has now signalled its acquiescence. Party chairman Odd Roger Enoksen says to Aftenposten that it was high time the Government offered a resolution. The Conservatives and the Progress Party both favour a sale, and they both hope the Government Bank Investment Fund will be dismantled as well.

NORWAY ON PERIPHERY OF EUROPEAN DEFENCE COOPERATION (Aftenposten)

The EU will grant special security cooperation arrangements to NATO countries which are not EU members. Nonetheless, Norway will lose much of the influence it enjoyed in the Western European Union (WEU). The EU’s political committee has now decided how to organize this cooperation, but the arrangements are not to Norway’s liking. Norway is now grouped together with Turkey, Poland, Hungary and the Czech Republic.

JAGLAND: GOOD FOR NORWAY THAT I AM PARTY CHAIRMAN (Dagbladet)

It is a great advantage to the country that foreign policy is managed by the head of the country’s biggest party. This is the main reason behind my intention to continue as Labour Party chairman, says Thorbjørn Jagland. Anyone imagining that Mr. Jagland, despite his categorical statements of the past winter, would turn party leadership over to Prime Minister Jens Stoltenberg this autumn and concentrate on the demanding job of conducting Norway’s foreign policy, may now discard their illusions. In Mr. Jagland’s view, the combination of foreign minister and party chairman is as close to ideal as anything can get.

WORTH NOTING

1. The long-awaited report from the Government Bank Investment Fund amounts to a 21-page analysis of trends in the Norwegian finance industry. The task of translating indistinct political signals into concrete proposals proved to be too difficult for the Fund. (Dagsavisen)
2. Deputy governor of Norges Bank Jarle Bergo is concerned about the possibility of a stock market crash. He says it would not take much to send the international stock markets plunging, taking the Oslo Stock Exchange with them. (Dagens Næringsliv)
3. After two years of studying relations between the Church of Norway and the state, the members of the church/state commission are frustrated with the formulation and extent of their mandate, the breadth and size of the commission, and their lack of progress. They are also afraid that their efforts will come to nothing. (Vårt Land)
4. Industrial leaders in western Norway call for more government spending on roads and tunnels. Investments in roads must be increased substantially if decentralized enterprises are to have any chance of survival at all, they say. (Nationen)
5. The average Norwegian reads one book every month, according to a recent survey. Avid readers have increased in number, light readers have become fewer, and the upshot is that Norwegians read more books than ever before. (Aftenposten)

TODAY’S COMMENT

The Norwegian bank thriller has more or less ended up as a farce. But fortunately, one may learn from farces, too. Last October, Labour Party chairman Thorbjørn Jagland stated that one of the solutions which would satisfy Labour would be to sell the Kreditkassen to the Swedes and retain the DnB as Norway’s semi-state-owned bank. After months of internal conflict and indecision, Labour again came to the same conclusion. The fact that Finance Minister Karl Eirik Schjøtt-Pedersen was on the losing side of this internal debate and is still unconvinced, is neither here nor there. As recently as last night, he declined to voice agreement with the Storting majority which blocked a merger between the Kreditkassen and the DnB, though he bowed to the views of the parliamentary majority. However, one lesson learned along the way may have an impact far beyond the confines of the bank industry issue. This vital lesson is that even when it is a majority shareholder, the state cannot really run partially-privatized companies. The Storting started out with the sanguine presumption that with a 30 per cent stake in Kreditkassen and 60 per cent in DnB, the state could simply make the decision to create a strong, new Norwegian finance institution. But the Storting has finally learned the same lesson as Kjell Inge Røkke: minority shareholders and stock market regulations requiring fair and open dealing can get in the way. In reality, state ownership of business enterprises requires the same conditions as Røkke’s corporate strategy: full control and removal from the Stock Exchange.