State Aid. Differentiated social security contributions. Possible extension of the deadline for implementing amendments

I refer to the previous correspondence, including the EFTA Surveillance Authority’s letter of 12 November this year, informing the Norwegian authorities of its decision to approve a three-year transitional period for the zones 3 and 4 for the regionally differentiated social security contributions.

Firstly, I would like to express our contentment with the Authority’s decision approving the transitional period notified by the Norwegian authorities on 25 March this year. Such a transitional period will ease the situation for the undertakings affected by the amendments and for the authorities enforcing the new scheme.

However, there is a broad political agreement in the Norwegian Parliament that the adaptation problems will be severe. There is a strong wish that the increase in rates and the compensating measures should be implemented in such a way that they allow the undertakings a reasonable period of time to adjust to the new situation. The parliamentary resolution on the new scheme will not be formally adopted until 26 November, at the earliest. This implies a very short period of time between the formal adoption of the stricter conditions and the notified time of the enforcement, 1 January 2004. The employers need more time to adjust to the complicated set of new rules for calculating their social security contributions.

Thus, the Norwegian authorities would call for a suspension until 1 July 2004 of the implementation of the amendments notified by the Norwegian authorities and approved by the EFTA Surveillance Authority. This application is put forward by the Norwegian authorities under the assumption that the three-year transitional period is maintained, with the reservation that the increased 2004 rates will apply only for the second half of that year. The escalation of rates will otherwise apply as presupposed in the notified scheme. The full rate will then be applied for the relevant regions as from 1 January 2007.

I hope for a rapid decision from the Authority, taking due account of the considerations put forward in this letter.

Yours sincerely,

Per-Kristian Foss