LABOUR SPLIT DOWN THE MIDDLE (Dagsavisen)

Support for the privatization of Statoil is gaining ground within the Labour Party. Following an intense campaign there are now as many supporters of privatization as opponents. One week before the party conference both sides are therefore on an equal footing. The conflict within the Labour Party will decide the future of the country’s state-owned oil company as well as the State Direct Financial Interest in the oil and gas sector (SDØE). In practice it will be Labour’s standpoint that will gain a majority in the Storting.

HEADQUARTERS DEFENCE COMMAND NORTH NORWAY TO CLOSE (Aftenposten)

Aftenposten has learned that the Armed Forces have decided that they need only one national operational headquarters, which will be located in Stavanger. Today, staff at Reitan, just outside Bodø, will be told that the Headquarters Defence Command North Norway will not be needed by tomorrow’s armed forces. If Reitan is completely shut down, 330 officers and civilian employees will lose their jobs. NATO supports the proposed strengthening of operations in the south.

BONDEVIK BELIEVES JENS WILL SURVIVE (Dagsavisen)

It was a divided centre that yesterday began negotiations with the Labour Party. Barely an hour before the opening of negotiations on the budget for next year, the centre parties were still feverishly trying to come to a last-minute agreement over the proposed dividend tax. They did not succeed. So the Christian Democrats, Liberals and the Centre Party started their first budget meeting with Labour without an agreement among themselves on what their negotiating position was going to be. Christian Democrat leader Kjell Magne Bondevik now believes Prime Minister Jens Stoltenberg will survive this autumn’s battle over the budget.

JAGLAND GOES FIRST (Dagbladet)

Labour Party chairman Thorbjørn Jagland will be the one who sets the tone when the Labour Party Conference starts Thursday, 9 November. As the first speaker he will sum up the state of Norwegian politics, both inside and outside of the party. Prime Minister Jens Stoltenberg will not get his chance to speak about the political situation until the following day. The order of speakers was decided when the Labour Party’s executive committee fixed the agenda for its forthcoming decisive conference.

TAX SHOCK FROM CENTRE ALLIANCE (Verdens Gang)

The Centre Party, the Liberals and the Christian Democrats are planning to tighten the taxation screw even harder when negotiations with the Labour Party start next Monday. Specifically, they propose increasing net taxation to 30 per cent from today’s 28 per cent – combined with a basic tax threshold so that ordinary wage earners will not pay more tax. The parties also have a general increase in VAT in the pipeline. By raising the general level of VAT to 25 per cent, they will have the funds to exempt transport and tourism from VAT. At the same time it will make a 50 per cent cut in VAT on food – the centre alliance’s most expensive budget demand by far – possible from 1 July next year.

NO SUDDEN DECISION (Dagens Næringsliv)

Kjell Inge Røkke and Aker Maritime were given the go-ahead to sell the company’s deep-water operations as far back as January by then Trade and Industry Minister Lars Sponheim. Financial analysts welcomed the Aker Maritime sale. "They are selling the family silver for the price of gold," says Glen Rødland, an analyst at First Securities.

ONLY LEFTOVERS FOR ALMSKOG (Dagens Næringsliv)

Kværner chief executive Kjell Almskog says the sale of Aker Maritime’s deep-water operations weakens the Norwegian offshore industry. What is left of Aker Maritime is no longer of interest to Kværner. "If we could have formed a single company out of Kværner and Aker Maritime, it would have had a strong foundation. In addition we could have taken other players with us into the international offshore market. There are lots of Norwegian companies who are trying to internationalize and who need a locomotive to pull them along. Together Kværner and Aker Maritime could have played that role, but not any more," says Mr Almskog.

SERIOUS FLOOD DAMAGE IN THE SOUTH (Aftenposten)

Storms and high tides beat the south coast of Norway yesterday. Last night the passenger ferry "Silvia Ana" slipped her moorings and floated adrift in Kristiansand harbour. There are no reports of any injuries following the storms in the south of Norway.

WORTH NOTING

1. Before the budget negotiations can begin in earnest, the centre alliance parties must come to an agreement amongst themselves. They now have a week in which to do so. (Aftenposten)
2. Thorvald Stoltenberg was yesterday appointed to lead an independent group that will investigate the humanitarian situation in Iraq on behalf of the UN. "What is needed is patience, and I am a patient man," he says. (Dagbladet)
3. The attempt by the leadership of the Confederation of Norwegian Trade Unions (LO) to patch together a compromise on Statoil has failed. A large minority of the LO secretariat are strongly opposed to privitization. All the signs point therefore to a battle over the issue being staged at next week’s Labour Party Conference. (Dagens Næringsliv)
4. Following the sale of the jewel in Aker Maritime’s crown – its deep-water business – the value placed on the remainder of the company is not high. The deep-water business was sold for NOK 5.9 billion, while the stock market prices the rest of the company at around NOK 1.2 billion. (Dagsavisen)

TODAY’S COMMENT FROM NATIONEN

Yesterday saw the start of this year’s economic policy battle in the Storting. Both sides have declared themselves more than willing to negotiate. Interference from the right is not wanted. At the same time both sides are relatively suspicious of each other following this spring’s change of government. The centre parties have a wish-list that is strongly reminiscent of the one they presented four years ago. At that time they squeezed many billions of kroner out of the revised national budget. Since then they have been in power and have had the painful experience of seeing what happens when the financial acrobats decide to "hijack" the budget. With that experience in mind we do not believe they will be tempted to fulfil Labour leader Thorbjørn Jagland’s standard claim that the centre’s policies amount to irresponsible profligacy. At the same time, it is obvious that a great many cuts will have to be made in the budget cloth to get it tailored to their own taste, and without it pushing up interest rates. If the centre’s "profligacy" does not materialize, how low can support for Mr Stoltenberg fall before he throws in the towel?

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