The Royal Ministry Of Foreign Affairs, Oslo

Press Division

Norway Daily No. 164/00

Date: 29 August 2000

CASH BENEFITS COST MORE THAN EXPECTED (NTB)

The cash benefits scheme will cost NOK 270 million more than anticipated this year because an increasing number of parents of small children are taking advantage of this offer instead of putting their children in day care. These figures do not surprise Minister of Children and Family Affairs Karita Bekkemellem Orheim. "[Before this scheme was adopted,] we pointed out that the expenditure was likely to be much higher than anticipated. It turned out we were right – payments have far exceeded the Bondevik Government’s calculations," says Ms. Orheim to the Norwegian Broadcasting Corporation (NRK) newsroom. According to the latest projections from the National Insurance Administration, the cash benefits scheme will cost upwards of NOK 3 billion this year.

PETROLEUM FUND MAKING NO PROFITS (Dagens Næringsliv)

Director Knut Kjær at Norges Bank was unable to earn any returns on the Government Petroleum Fund’s stock portfolio in the second quarter. A negative stock market trend was offset by a positive trend in the bond portfolio, leaving the GPF with zero in bottom line profits despite the injection of NOK 40 billion in June which took the volume of the GPF to NOK 304.6 billion. The overall rate of return for the first half year was 2.4 per cent.

ECONOMIST PROPOSES FAR-REACHING TAX CUTS (Verdens Gang)

According to senior economist Knut Anton Mork of the Handelsbanken, there is no reason why Prime Minister Stoltenberg could not give us the best Christmas package any of us could desire: tax cuts worth billions of kroner in the form of lower excise taxes on petrol, food and alcohol. "I see no reason why the same thing that is happening to the Swedes should not happen to Norwegians. The Swedish Government is implementing the most sweeping tax cuts in Swedish history," says Mr. Mork.

DISAGREEMENT OVER PROGRESS PARTY (Nationen)

Leading Eurosceptics disagree on whether or not the Progress Party should be allowed to take part in No to the EU. Socialist Left party chairman Kristin Halvorsen has expressed repugnance at the idea, and her view is seconded by Odd Roger Enoksen (Centre) and Sigbjørn Gjelsvik. Christian Democratic chairman Valgerd Svarstad Haugland and Grete Fossum (Labour), on the other hand, feel that excluding the ultraconservative Progress Party would be going too far, despite its manifest xenophobia. "Opposition to EU membership is not the exclusive domain of the political left," comments Ms. Haugland.

GOVERNMENT PROMISES MORE FOREIGN AID FUNDING NEXT YEAR (Vårt Land)

The Government will allocate more money to development assistance next year, but Minister of Development Cooperation Anne Kristin Sydnes cannot promise that relief agencies can count on any more funding this year. Ms. Sydnes declines to put any figure on the size of next year’s allocation. A number of Norwegian development assistance agencies criticized the Government on Monday because the Ministry of Foreign Affairs has started turning down applications for support to humanitarian and relief efforts, blaming the situation on a lack of funds.

STOLTENBERG SHOULD BE LEADING THE FIGHT (Dagbladet)

Svein Larsen, former party secretary in Oslo, says Jens Stoltenberg should be fighting in a more prominent position. He will have to fight for a state-run hospital system and for the partial privatization of Statoil at the national convention. After that he must be given sufficient room in the party to act as the party’s leading front-line figure in the run-up to the election.

NYCOMED TO RELOCATE TO COPENHAGEN (Aftenposten)

Nycomed is moving its production activities from Oslo to Copenhagen, eliminating 200-250 employees, or around a third of its workforce, in the next few years. A year after new owners took over, Nycomed is preparing for drastic staff reductions. Managing director Håkan Björklund expects to trim NOK 100 million, or around 10 per cent, from Nycomed’s production costs.

NORWAY MUST INCREASE ITS COMMERCIAL OUTPUT (Dagsavisen)

The Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Business and Industry (NHO) are both on the offensive to increase Norway’s output. The two organizations agree that there is too little innovation, and indeed, too little commercial activity to maintain Norway’s current prosperity. 800,000 new jobs must be created in Norway by 2020, according to the two organizations. The problem is that Norway is already facing labour shortages. The commercial sector needs another 35,000 workers as it is, and the national labour pool is growing rapidly older.

WORTH NOTING

• A committee charged with reviewing Labour Party statutes proposes that union membership as a prerequisite for party membership should be struck from the books. The committee also proposes to replace the term "socialist" with "social democratic". (Aftenposten)
• The Government Petroleum Fund lost money on its stock market investments in the second quarter. The Centre Party now calls for a higher percentage of the GPF to be invested in Norway. (Dagsavisen)
• Problems with the brake systems on the new airport shuttle trains are having a noticeable financial effect. Extra maintenance costs an additional NOK 1 million per month. (Verdens Gang)
• The value of Kværner’s bid for Aker Maritime is now at its highest level since it was offered. It is unlikely Kjell Inge Røkke will accept it, however. (Aftenposten)
• Kjell Inge Røkke’s Aker RGI noted NOK 1.7 billion in returns in the first half year, despite its diminishing activities. Most of the gain probably comes from profits on the sale of assets. (Dagens Næringsliv)
• Arcus, the state-owned wine and spirits monopoly, will be allowed to market its products on the Internet. Buyers will not be able to view its wares, however, as pictures are prohibited. (Aftenposten)

TODAY’S COMMENT from Vårt Land

Prime Minister Jens Stoltenberg enjoys one advantage denied to Thorbjørn Jagland: no up-comers are waiting in the wings for an opportunity to replace him. But the problems besetting the Labour Party cannot be linked to any individual. Mr. Stoltenberg is as skilful at communicating with the media as he ever was as Number Two. He has made no obvious mistakes, and Norway is neither disordered nor mismanaged. Nonetheless, an opinion poll credits Mr. Stoltenberg with only a 14 per cent rating. It is obvious, then, that the problem is not with Mr. Stoltenberg himself but with the Labour Party. Mr. Stoltenberg has been victimized by a sense of disappointment at his failure to meet the party’s expectations – expectations which were manifestly too high. Neither he nor party chairman Thorbjørn Jagland has the necessary authority to unify the highly divergent directions of opinion within the party. Nor are the budget proceedings and the national convention likely to produce the hoped-for singleness of purpose. The race to define party policy will continue right up to the finish line at next year’s general elections. Mr. Stoltenberg faces the ultimate test of endurance.

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