Surprise cut in interest rates – more to follow (Aftenposten)

The Norwegian Central Bank surprised the market yesterday by cutting interest rates by 0.5 percentage points. According to the Bank, the cut was due to a slight strengthening of the Norwegian exchange rate and the rise in electricity prices. And not only that, the Bank also indicated that a further cut could be announced at its next interest rate meeting on 22 January, though it still believes wages growth will remain strong. "The Norwegian Central Bank’s nerve broke in the end, luckily. The Bank has done the right thing, but has nevertheless blotted its copybook," writes Aftenposten’s economics editor in response to Central Bank Governor Svein Gjedrem’s about-face.

Call for Gjedrem’s resignation (Nationen)

Handelsbanken’s chief economist, Knut Anton Mork, is fuming after yesterday’s surprise cut in interest rates. "I cannot see how Svein Gjedrem can carry on as Governor of the Norwegian Central Bank," said Mr Mork. Mr Gjedrem surprised most commentators with a 0.5 percentage point cut in interest rates. "This is extremely dramatic. The Bank has broken its own rules and procedures under which it cannot adjust interest rates without prior warning. Pressure must have been brought to bear for this to happen," said Mr Mork in an interview with Nettavisen. He said he had not seen anything in the Norwegian economy which could provide the basis for yesterday’s surprise cut in interest rates. "Mr Gjedrem has clearly lost the battle, and should think carefully about whether he can continue as Governor of the Norwegian Central Bank," he added.

Finance Minister doubts further cuts ahead (Dagens Næringsliv)

Finance Minister Per-Kristian Foss is not expecting any further cuts in interest rates in the short term. "A precondition for any further cuts is that employers and unions manage to agree on a moderate wage settlement next spring. It is crucial that wage inflation is brought down to a much lower level than this year," he said. Mr Foss is therefore at odds with the majority of economics experts, who are forecasting that the Norwegian Central Bank will cut interest rates again as early as January. Mr Foss believes that next year’s national budget must take some of the credit for the cut in interest rates, along with international conditions and a cooling off of the Norwegian economy.

Unwise to exonerate Tønne (Aftenposten)

According to law professor Jan Fridthjov Bernt, the natural thing to have done was to request an independent evaluation of whether charges should be brought against former Health Minister Tore Tønne in connection with the state salary he received after resigning his office. The Prime Minister’s Office has closed the case. According to law professor Eivind Smith, a former minister who receives too much salary from the state while he is waiting to find a new job has similarities with a social security fraudster. They receive more than they should, and they take it from the public purse. "Politicians, more than anyone, should not take advantage of any and every excuse to conceal the financial benefits they enjoy from the public. If they do, it is easy for ordinary people to start believing that politicians as a group are only interested in giving themselves benefits at the expense of society at large," writes Aftenposten’s commentator. The Storting has refused to reveal which ex-ministers and former MPs are currently in receipt of "waiting pay".

Law firm admits concealing payments to Tønne (Dagbladet)

The law firm, BA-HR, admits that a bill sent to Aker RGI was inflated to the tune of NOK 1.5 million in order to acquire the funds to pay former Health Minister Tore Tønne. He received the money for work he did for Kjell Inge Røkke during the battle for control of Kværner. Mr Tønne’s name was to remain hidden. Dagbladet revealed yesterday how the secret project "Northstar" was used as a front for the transfer of NOK 1.5 million in consultancy fees from Mr Røkke to Mr Tønne. The unconventional transaction lends credence to the theory that Kjell Inge Røkke, his pet law firm and Tore Tønne did what they could to conceal the close financial ties linking the business tycoon and the former politician.

Fears of unimaginable catastrophe ahead (Vårt Land)

Jan Egeland, Secretary General of the Norwegian Red Cross, fears that a humanitarian catastrophe of unimaginable proportions could arise in the event of an armed conflict in Iraq. Yesterday Mr Egeland presented a wide-ranging package of aid for Iraq before a potential disaster occurs. 12 enormous trucks, 40,000 woollen blankets, two electricity generators, thousands upon thousands of jerry cans and eight marquees are among the items being shipped south this week. "This is the first phase of a major operation. In the period up until January we will be training 100 aid workers in Norway who can help to meet any eventuality in Iraq," said Mr Egeland.

Not a single fish to EU (Nationen)

The EU is planning to demand the right to invest in the Norwegian fishing fleet, but Fisheries Minister Svein Ludvigsen will not give away a single fish when Norway starts negotiating an extension of the EEA Agreement. Nationen was able to reveal yesterday that the European Commission will demand that Norway permits EU investors to acquire a stake in the Norwegian fishing fleet. Nationen is given to understand that the demand will be made in return for Norway being allowed to retain some of its free trade in fish to eastern European countries after EU expansion. Despite the fact that Mr Ludvigsen has not yet received the EU’s official list of points to be negotiated, he has guaranteed that he will not accept the EU’s demand. "For me this is totally out of the question. We are now getting the Norwegian position ready before the start of negotiations," he said, pointing out that the issue was one of the main reasons for the fishing industry’s rejection of Norwegian membership at the referendum in 1994. "We will respond to the EU’s demands when they are made," he said.

1. Worth Noting

• Yesterday the International Monetary Fund (IMF) presented its annual report on the Norwegian economy. The IMF’s list of demands is a textbook example of neo-liberal economic policy. Among the IMF’s demands is complete independence for the Norwegian Central Bank, with the Bank’s board no longer appointed by the parties represented in the Storting. Finance Minister Per-Kristian Foss described the IMF’s comments as a "useful contribution to the Norwegian public debate".
  (Klassekampen)
• Half of the ministers who resign take up the offer of three-months state salary while they are waiting to find a new job. Siri Bjerke and Otto Gregussen both stopped the payments from the Prime Minister’s Office when they started new jobs.
  (Aftenposten)
• In the new year the Labour leadership plans to initiate a wide-ranging debate on Europe within the party, bringing another battle over EU membership a step closer. "The framework for a debate of this kind will be discussed at one of the first meetings of the central committee after Christmas," said Labour leader Jens Stoltenberg. It therefore seems likely that Norwegian membership of the EU will be a key issue at the party’s national conference in 2004, the autumn before the next general election.
  (NTB)
• Helge Aarseth, chairman of the Norwegian Bar Association, has described the revelations in yesterday’s Dagbladet as "unfortunate". For the moment the board of the Bar Association has not decided whether the law firm BA-HR should be investigated by the association’s disciplinary body. "We will discuss whether this is a matter we should follow up on in our own internal fora," said Mr Aarseth.
  (Aftenposten)
• In future new private primary and secondary schools will no longer have to be based on an alternative religious, philosophical or educational point of view to the state education system. This is the main thrust of the Government’s new private schools policy to be announced by Education Minister Kristin Clemet tomorrow.
  (Dagsavisen)
• According to a forecast from the Norwegian National Lottery, the company expects its own lottery games to generate revenues of more than NOK 8.9 billion in 2002. On top of this comes NOK 795 million from Extra, a game for which the Norwegian National Lottery is simply the operator.
  (Dagens Næringsliv)

2. Today’s comment from Verdens Gang

Dagbladet has published a stream of revelations regarding the law firm BA-HR. In this context it would perhaps be more precise to refer to the previously reputable law firm BA-HR. Regardless of whether BA-HR should prove to have a good explanation for what has been uncovered, the scale of dubious dealings is so great that BA-HR now appears to be a firm whose employees are in need of a course in legal ethics. In the past few years BA-HR has grown large and strong at Aker Brygge in Oslo. With Kjell Inge Røkke as its most prestigious and most important client, the company has had a reliable cash cow. If the memos Dagbladet has published in recent days give a correct picture, it would seem as though BA-HR has gone far out of its way to satisfy a powerful client. It is important to ensure that all the cards are now laid on the table. Mr Røkke, Mr Tønne and BA-HR all have a responsibility to tell the truth. It is possible that a certain amount of malicious sniggering can be heard among the capital’s other law firms. If so, it is inappropriate. What is now happening at Aker Brygge is likely to damage public confidence in the entire legal profession. Lawyers are supposed to serve their clients’ interests, but they have a duty to society over and above such considerations. They are supposed to advise their clients in matters of right and wrong. And in that they are bound by the law – and the rules of legal ethics. Lawyers should also be bound by considerations of decency and morals. Ethical and moral awareness should be part of the corporate culture of large legal firms too. BA-HR should see that as a challenge in the coming months.