13 March 2003

Norway’s relations with USA could be permanently damaged (NTB/NRK/TV2)

According to US Ambassador to Norway John Doyle Ong, the way Norway was responding to the Iraq conflict could cause permanent damage to relations between Norway and the USA. “When a friend you have had for a long time refuses to do you a favour, it changes the friendship,” said Mr Doyle Ong, who fears that relations between the two countries will never be the same again. He said that he was not issuing a warning, simply making an observation, adding that his comments applied to political leaders both inside and outside the Government. Foreign Minister Jan Petersen, leader of the Conservative Party, responded by saying that Norway would not be pressurized into changing its views on the Iraq crisis. “We must take the position that we feel is right, and not let ourselves be pressured into adopting another point of view,” he said.

Yesterday, Prime Minister Kjell Magne Bondevik invited the leaders of the largest opposition parties to discuss possible measures to tackle rising unemployment. But the Government and the opposition cannot agree on what is the right medicine to prescribe. Not even the proposal to create additional places on training and work opportunity schemes for the unemployed can muster majority backing. The Progress Party’s plan to bring down unemployment involves stimulating the economy by pumping huge amounts of the country’s oil revenues into public construction schemes. Labour leader Jens Stoltenberg agrees with the PM that the most important measure for protecting jobs is to cut both interest rates and the exchange rate. In addition, Mr Stoltenberg wants to allocate funds this spring for the creation of 5,000 new places on training and work opportunity schemes for the unemployed.

Stein Reegård, chief economist at the Norwegian Confederation of Trade Unions (LO), has flatly rejected the suggestion that the state should spend NOK 5 billion on construction projects to reduce unemployment. “We are now well on our way to achieving a cut in interest rates and a lower exchange rate, which will provide an important boost to the economy. Support for the Progress Party’s populist proposals for a more expansive budget could spoil those efforts,” said Mr Reegård.

Progress Party chairman Carl I. Hagen’s call for oil revenues and tax cuts to be used to reduce unemployment received the support of some senior economists yesterday. But the ruling coalition thinks that the price of Mr Hagen’s good advice is too high. After yesterday’s meeting with the Prime Minister, Mr Hagen was asked if he expected to be listened to. “No, not based on previous experience,” was his reply. After the meeting, Prime Minister Kjell Magne Bondevik announced that the Government was considering measures such as accelerating the pace of local authority construction schemes, strengthening research and education, initiating avalanche and landslide prevention measures and creating more places on training and work opportunity schemes for the unemployed.

Prime Minister Kjell Magne Bondevik is certain that the Government has more in common with the Labour Party when the national budget is to be balanced and unemployment reduced. “There is no doubt that, in relation to the budget framework, we are most closely aligned with the Labour Party,” he said. But Mr Bondevik felt unable to predict which party it will be easiest for the Government to win the support of when this year’s revised national budget comes to a vote the Storting this spring.

The Labour Party has come out strongly against local authority enthusiasm for privatization. “We will be consistent in our opposition to privatization,” said Bjarne Håkon Hanssen, the party’s social affairs spokesman. According to political scientist Anders Todal Jenssen, privatization is a good issue for Labour. However, the party has never before been so unclear. “Labour could therefore end up in a bind if the issue is put on the public agenda,” he said.

Local Government and Regional Affairs Minister Erna Solberg, who is also the Conservative Party’s deputy leader, says she is more than willing to do battle with the Labour Party over competitive tendering during this autumn’s local election campaign. “There are absolutely no grounds for saying that competitive tendering in itself leads to poorer quality services. The Norwegian Board of Health has made that clear. When the Labour Party and the Socialist Left Party claim that competition leads to poorer quality, they are not taking the facts into consideration,” said Ms Solberg. She underlined that competition is not only a tool with which to stretch local authority budgets, but also to secure the quality of the services provided.

“I cannot deny that it was no easy task to take over from Anne Enger Lahnstein,” said Odd Roger Enoksen, outgoing leader of the Centre Party. According to Mr Enoksen, Norwegian politics has changed since the Centre Party lost its pivot position. “We are the driving force for a fair distribution of the country’s wealth. We uphold the importance of public service as opposed to privatization. In this respect we have been a bulwark that collapsed when the Christian Democrats took over the pivot position,” said Mr Enoksen.

The Centre Party’s leadership team is preparing for trouble at this weekend’s annual conference over the issue of pre-school day-care reform. Odd Roger Enoksen and Åslaug Haga are fine-tuning the arguments they hope will pacify the party’s furious local council leaders, but they are refusing to pull out of the parliamentary majority that has pushed through the reform package. “We are making changes in response to the signals we have received from the party. We admit that the pre-school day-care reform runs counter to the objective of as much local autonomy as possible,” said Mr Enoksen.

Major job losses could be the result of a merger between Den norske Bank (DnB) and Gjensidige NOR. The Banks’ employees have previously opposed such a merger. If the merger negotiations succeed, the two companies will form Norway’s largest financial services provider by far. A centrally-placed source has confirmed that talks are being held, but that no breakthrough has been achieved so far. Neither of the two banks was prepared to make an official statement on the issue. Finance Minister Per-Kristian Foss declined to comment at this stage, but pointed out that the Storting has previously supported the idea of DnB being a major Norwegian financial institution.

At 10 o’clock on Monday, 24 March, an open hearing will take place on the Public Roads Administration’s massive budget overruns. Those responsible for the country’s roads, probably Transport Minister Torild Skogsholm and chief executive of the Public Roads Administration Olav Søfteland, will appear before the Storting’s Scrutiny and Constitutional Affairs Committee to explain why six projects have overrun their budgets by a total of NOK 4.65 billion. The first time an open hearing of this kind was held in relation to transport issues was in 1998.

Progress Party chairman Carl I. Hagen is more than willing to spend an additional NOK 4 billion on road building projects to stem the rise in unemployment. Prime Minister Kjell Magne Bondevik and Labour leader Jens Stoltenberg were more modest in their ambitions during yesterday’s meeting on the national budget and employment.
(Dagens Næringsliv)




In the near future, the Directorate of Public Roads will ensure that your old driving licence is no longer valid. The authorities want Norwegian motorists to have a driving licence containing different information. And in contrast to today’s system, the driving licences of the future will have to be renewed every ten years – or the holder will incur a penalty.
(Verdens Gang)




OnTarget, the Norwegian Confederation of Sports own sponsorship brokerage, has taken over all of Sponsor Service’s rights in the fields of sports and culture in Norway. According to the agreement, which was signed yesterday, onTarget will pay NOK 3 million for the rights. In addition Sponsor Service’s bankrupt estate and onTarget will share the commission on future agreements for the next two years.
(NTB)




Once again it has been proved – girls are better at reading than boys. Education Minister Kristin Clemet says that adults must let boys read what they want to. Helga Hjetland of the Confederation of Higher Education Unions, Norway (UHO) agrees.
(Dagsavisen)




Every week immigrant children are disappearing from Oslo’s schools. In the last school year alone, the number of empty desks has risen by 110. Some pupils return after weeks or months away. Others are never seen again.
(Dagbladet)




Well over 100,000 people in Norway are currently out of work. For them there is no good news at the moment. The Norwegian Confederation of Trade Unions (LO) fears that the number of unemployed could rise as high as 140,000 by the end of the year, in a worst-case scenario. But the lower Norwegian exchange rate could prevent what, by Norwegian standards, would be an extremely high unemployment rate.
(Verdens Gang)

A new political crisis is brewing this spring, prompted by disagreements over economic policy. And it is happening at a time when the country’s economy could hardly be in better shape; a time when all the economic indicators are pointing in the right direction. All, that is, except unemployment. The government has settled the national budget with the Progress Party. Now the time has come for the budget to be revised. In the meantime, however, the Progress Party, Labour Party and Socialist Left Party have together voted through a raft of measures that will increase public spending over and above the amount specified in the budget, without indicating where the money to pay for them will come from. According to Progress Party chairman Carl I. Hagen, the answer is easy enough – just spend more of the country’s oil revenues. Indeed, he even wants to use those oil revenues to fund what looks like a good old fashioned New Deal scheme, in which the unemployed are put to work building roads. The Labour Party actually agrees with the Government that unemployment can best be prevented by ensuring that the national budget is tight enough to bring down interest and exchange rates. The Government will have to cut public spending by at least NOK 5 billion to keep within what Prime Minister Kjell Magne Bondevik has defined as a responsible framework. If neither the Progress Party nor the Labour Party will support cuts of that size, the PM may be forced to demand another vote of confidence. The Government’s future existence is therefore in the hands of Carl I. Hagen – which puts him in the spotlight he needs ahead of this autumn’s local elections. Or perhaps the Socialist Left Party has now grown so strong that its leader Kristin Halvorsen can afford to keep the Government alive? The fact is that none of the political parties wants another government right now. So the PM could have every reason to stick firmly to what he feels is right, even if it brings the Government a step closer to resignation. For some Christian Democrats, that would probably be a relief.