No agreement on residential property tax (Aftenposten)

Following yesterday’s breakdown of negotiations on a new residential property tax, Norway’s 1.3 million home-owners will probably have to live with the current valuation system. Disagreement over the method to be used to determine property size led to the collapse of the negotiations. But the issue was primarily one of money – lots of money. The difference between the Labour Party’s proposal for residential property tax and the Centre Party’s scheme was around NOK 2 billion when the time came to make a decision. Attempts to arrive at a compromise ran aground, though the Labour Party had not given up all hope yesterday. "We will have to postpone the Finance Committee’s recommendation," said committee chairman Dag Terje Andersen (Labour). The recommendation was due to have been presented today.

Shareholder power will stop merger (Aftenposten)

Storebrand shareholders Orkla, Nordstjernen and the National Insurance Fund can, together with Den norske Bank (DnB), block the proposed merger between Storebrand and the Finnish financial services company, Sampo. DnB’s chief executive Svein Aaser is banking on Norwegian nationalism to give him control of Storebrand. Mr Aaser is unwilling to take part in a bidding war against Sampo, but asserts that DnB’s bid is as advantageous for shareholders as the Finnish bid. Orkla has announced that it prefers a Norwegian solution and it is expected that the National Insurance Fund will vote in accordance with the wishes of the Storting.

Finance Minister to impose a Norwegian solution (Dagens Næringsliv)

Finance Minister Karl Eirik Schjøtt-Pedersen has indirectly given the National Insurance Fund orders to use its 9.97 per cent stake in Storebrand to block Sampo’s attempt to acquire the company. Other centrally placed MPs also wish the Fund to use its shareholding to stop the Finns’ bid. "The National Insurance Fund owns 9.97 per cent of Storebrand’s shares. We cannot instruct the Fund on what to do, but its board of directors are political appointees," says the Labour Party’s finance spokesman, Dag Terje Andersen.

SAS acquires Braathens (Dagens Næringsliv)

Scandinavian Airline Systems (SAS) yesterday acquired 70 per cent of Braathens, its biggest competitor in Norway, and put in a bid for the company’s remaining shares. The acquisition, which still has to be approved by the Norwegian Competition Authority, prices Braathens at NOK 1.1 billion. The acquisition of Braathens means that SAS will have a monopoly on domestic flights in Norway, Sweden and Denmark.

Transport Minister failed to prevent airline monopoly (Dagsavisen)

Six months ago Transport Minister Terje Moe Gustavsen said he would do all he could to prevent SAS gaining a monopoly on flights in Norway. But now he has given up. He is leaving it up to the Norwegian Competition Authority to decide whether SAS’s near monopoly threatens free competition, and says the question of ownership will not be turned into a political issue.

This is what the politicians say (Dagbladet)

The monopoly that would arise if SAS takes over Braathens is so frightening that Braathens must be forced to find an alternative buyer. This is the general response of MPs, though they all admit that it may be difficult for the crisis-hit airline to make itself attractive to a foreign buyer. The most obvious evidence of that is the fact that Braathens’ current international alliance partner, the Dutch airline KLM, has sold its 30 per cent stake in the company to SAS.

Call for creation of parliamentary branch office in Brussels (Nationen)

The Christian Democrats and Liberals have proposed that the Storting opens an office close to the European Parliament. The country’s two biggest supporters of the EEA Agreement want to improve Norway’s ability to follow up the EEA Agreement by creating a parliamentary office which can help improve contacts with Members of the European Parliament.

Worth Noting

• Ownership of the country’s hospitals will be transferred to central government control from the new year. The Progress Party and the Conservatives are not completely satisfied with the reform, but there are strong indications that the Progress Party at least will vote in favour of the Government’s proposal. (Aftenposten)
• SAS’s acquisition of Braathens is the worst thing that could have happened to the Norwegian air transport market, according to transport industry expert Knut Østmoe. He has called on the Norwegian Competition Authority to intervene to prevent a substantial price hike. (Dagsavisen)
• Sampo has offered NOK 20.8 billion for Storebrand. Following an intense round of negotiations Sampo won the support of both Storebrand’s management and board of directors, who have recommended that shareholders accept Sampo’s bid. (Dagens Næringsliv)
• DnB is so concerned about the prospect of its share price collapsing that it has refused to enter a bidding war with Sampo. Just minutes after the Oslo Stock Exchange opened yesterday DnB’s shares had fallen by 4.5 per cent. (Dagsavisen)
• Norwegian charities will have to pay millions of kroner in VAT following the Government’s tax reform. For that money thousands of children could have received help from Norwegian sponsors. "It is immoral. We could have helped 15,000-20,000 for the price of next year’s VAT expenses," said Gro Bakken of Save the Children Norway. (Vårt Land)
• Svalbard will be used to post letters to the mainland when VAT on postage stamps comes into force this summer. VAT is illegal on Svalbard. (Aftenposten)

Today’s comment from Dagsavisen

SAS has acquired 70 per cent of the shares in Braathens, and is therefore practically alone in the Norwegian air traffic market. SAS is already the major shareholder in the Widerøe airline and the takeover of Braathens has given it a "stranglehold" on Norwegian airspace. It was not many months ago that Transport Minister Terje Moe Gustavsen announced in Dagsavisen that he would do all he could to secure competition in the skies. Mr Gustavsen was crystal clear when he guaranteed that SAS would not gain a monopoly in the market and said he was considering an increase in state support for Braathens. We feel the time has come for drastic action. Braathens probably does need a new owner, but that owner should not be SAS. In a country where air travel is a vital form of communication, we must also have competition in the air. The Transport Minister has a duty to make sure that happens.