The Royal Ministry of Foreign Affairs,
Oslo Press Division

Norway Daily No. 91/00

Date: 15 May 2000

1/2 BILLION IN CUTS TO BE TAKEN ELSEWHERE (Aftenposten-Saturday)

The Storting will not lengthen the employers sick pay period, as proposed by the Government in the Revised National Budget, so Finance Minister Karl Eirik Schjøtt-Pedersen will have to cut spending by over one-half billion kroner elsewhere in order to balance the budget. Local governments will not be compensated for the full amount of payroll cost hikes resulting from this year’s wage settlement, so the threat of a strike in the public sector looms ever higher. Most of the parliamentary opposition concurs in Mr. Schjøtt-Pedersen’s insistence on keeping a tight budget, however.

THE RICH TO BE SPARED (Dagsavisen-Saturday)

The Government’s Revised National Budget cuts expenditures by NOK 3.5 billion. The wealthy will not be taxed any harder. Instead, services to common citizens will be scaled back and the foreign aid budget will be reduced by NOK 431 million. Finance Minister Karl Eirik Schjøtt-Pedersen says major cutbacks are necessary in order to avoid pressure on the economy, growing unemployment and higher interest rates.

PETERSEN WANTS EVEN TOUGHER BUDGET (Dagsavisen-Saturday)

The temperature of the Norwegian economy is so high that Conservative Party chairman Jan Petersen is afraid it will soon boil over. He advocates budget austerity in order to dampen consumer spending. A record NOK 133 billion surplus is forecast in the commercial sector, yet we will be compelled to spend less. Tremendous growth in the mainland economy, a steep rise in private spending and an expensive private sector wage settlement has Mr. Petersen calling for even higher budgetary cutbacks in order to avoid interest rate hikes.

NOK 200M IN DEFENCE PLANNING DOWN THE DRAIN (Aftenposten-Sunday)

The defence sector has spent NOK 200 million on projects which are now fated to be shelved. With the Revised National Budget cancelling NOK 13.7 billion in defence investments, the large sums already invested in the initial phases of these projects will have been spent in vain.

MONUMENTS NEED MORE CARE (Dagsavisen-Sunday)

Nearly NOK 7.8 billion will be needed over the next 20 years to repair, secure and maintain Norway’s historical and cultural monuments, according to the Central Office of Historic Monuments. This is substantially higher than the figure quoted last summer, when the need was estimated at NOK 2.5 billion over a ten-year period.

COSTS KEEP CLIMBING FOR NATIONAL HOSPITAL (Verdens Gang-Saturday)

Budget excesses at the National Hospital seem fated to continue. Another NOK 182 million is needed to open the hospital on schedule, bringing total cost overruns up to NOK 1.3 billion. And the Directorate of Public Construction and Property, which is responsible for NOK 182 million in excess costs, cannot promise that this will be the last.

TELENOR INVESTS NOK 3.5B IN THAILAND (Dagens Næringsliv)

Telenor and its chief executive, Tormod Hermansen, signed an agreement this weekend securing Telenor between 25 and 30 per cent of Total Access Communications, Thailand’s next biggest mobile phone operator, for around NOK 3.5 billion. This is the largest single investment made by Telenor outside Norway.

HAAKON SPEAKS OUT (all newspapers)

Crown Prince Haakon confirmed his romantic relationship with Mette-Marit Tjessem Høiby yesterday. He went to this step because of the enormous pressure on them from the media, which has become so intense in recent weeks that it could become an unreasonable hardship for Mette-Marit and her three-year-old son. Opinion is divided on the Crown Prince’s having publicly commented on this relationship. Some feel he showed great courage in doing so; others found him naive, and take the view that the interview did not strengthen the standing of Norway’s royal family with the people.

WORTH NOTING

• 1500 workers in the retail trade may walk off the job on Tuesday morning. If unions and employers do not reach agreement, many shoe shops, clothing shops and furniture stores may have to shut their doors. On a different front, the agricultural settlement is also entering a decisive phase. (Aftenposten-Sunday)
• Norway’s defence industry could be hit hard if the procurement of new jetfighters is put off for ten years. Lockheed Martin will nonetheless try to keep five or six projects worth at least NOK 1.5 billion going. (Dagens Næringsliv)
• The National Institute of Public Health runs a vaccine laboratory at a cost of NOK 25 million per year, but after five years of operation, not a single one of its vaccines has been put to use. (Aftenposten)
• The Labour Party’s policy on wolves is to spread them over large parts of southeast Norway, but the Centre Party feels two populations in the border tracts with Sweden should be sufficient. (Nationen)
• Muslims on Oslo’s east side are disregarding the maximum loudness permitted under local by-aws for calls to prayer. The day after official tests, loudness was registered at 80 decibels, far in excess of the 60 dB limit established earlier this year. (Verdens Gang-Saturday)

TODAY’S COMMENT from Dagbladet (Saturday)

The Stoltenberg Government’s first budget illustrates the powerlessness of the politicians when confronted with the hard economic realities. Finance Minister Karl Eirik Schjøtt-Pedersen message when he presented the Revised National Budget to the news media on Friday was that this budget will not put added pressure on the Norwegian economy. All spending increases which have materialized since the fiscal budget was adopted in December, some NOK 5.2 billion, will be balanced by cutting other expenditures, despite the tenfold increase in oil revenues which represent a NOK 53 billion windfall. The Government now believes we can set NOK 138 billion aside at the end of the year, bringing the Government Petroleum Fund up to NOK 369 billion. NOK 400 million in sick pay expenditures is to be pushed over onto the commercial sector, defence must take half a billion kroner in cutbacks, hospitals will be given less to spend on equipment, roads, railways, postal services and air transport will have to make do with less, and cuts will be implemented in foreign aid, rural policy and the various types of child benefits. And basic funding for local government will remain at a standstill. The Norwegian Association of Local Authorities (KS) has already warned of rises in municipal fees, reductions in municipal services and accelerated privatization of services. The imminent budget cuts may prove to be costly. Is this really a good programme for an efficient public sector?