Arab Today, arab today flush with cash norway ponders use of petrokroner
Last Updated : GMT 01:44:06
Arab Today, arab today
Arab Today, arab today

Flush with cash, Norway ponders use of petro-kroner

Arab Today, arab today

Arab Today, arab today Flush with cash, Norway ponders use of petro-kroner

Oslo - AFP

Norway, which goes to the polls on Monday, is an island of prosperity in Europe, with so much money that it literally doesn\'t know what to do with it. The Nordic country faces an embarrassment of riches as it tries to figure out how to spend its huge pile of oil money without damaging the economy in the long run. \"All countries around us are forced to reduce their spending,\" said Oeystein Doerum, chief economist at Norway\'s largest bank DNB. \"Our biggest challenge is that our oil wealth is so huge we run the risk of wasting it on substandard projects that are not profitable enough.\" The dilemma is all the more real because the populist right gathered in the Progress Party, which wants to abandon the cautious policies espoused by other parties, is likely to form a government with the Conservatives after the election. Since the late 1990s, the Scandinavian country has conscientiously placed its oil revenues in a fund meant to finance the generous welfare state over the long run. The fund invests mainly in stocks, bonds and real estate, placing the money outside Norway to avoid overheating. In the process, it has become the largest sovereign wealth fund in the world, weighing in at $750 billion (570 billion euros), or an average 1.25 percent of the market capitalisation of each company listed in the world. --- Dilapidated schools despite $750 bn --- To make sure that the fund keeps growing, the government can withdraw no more than four percent a year -- the projected annual return -- in order balance its budget, which otherwise would be in the red. \"The fact that you can have dilapidated schools and broken roads at the same time as you have a huge oil fund belonging to society is testimony to the frugality and long-term perspective of Norway\'s leaders,\" said Doerum. Launching a lone assault on this consensus, the Progress Party wants to remove the fiscal spending rule and spend more money on education, research and infrastructure, to lay the foundation for future growth that would prove profitable for the state in the medium term. The problem is that the Conservatives, which are likely to lead a post-election coalition with the Progress Party, actually think the current arrangement is too generous, pointing out that as the fund continues to grow, the amount of petro-money available to the government expands proportionally. \"The most important point of negotiation between the Progress Party and us is on the nature of the expenses, not on whether to exceed the four percent,\" said the Conservative leader Erna Solberg, Norway\'s likely next prime minister. \"We will not,\" she added, \"be part of a government that carries out an irresponsible economic policy.\" Even though the Norwegian economy has slowed down, excessive injection of public money could be destabilising. --- Oil money pushing wages too high --- In a country where there is almost full employment, the booming oil sector is pulling wages higher than they otherwise would be. This even goes for traditional industries, which are in competition to attract skilled workers. The result is that Norwegian industrial wages are about 70 percent above those of other European countries, severely undermining the competitiveness of the nation\'s exporters. An influx of petrodollars could thus ultimately have catastrophic consequences for employment and public accounts. \"Everything depends on how the money is spent,\" said Torbjoern Eika, head of research at Statistics Norway. \"If we choose to lower taxes, the negative effects on the economy are less pronounced... because it tends to stimulate savings in the short term,\" he said. Labour Prime Minister Jens Stoltenberg, who looks set to lose the election, has warned that the draft 2014 budget to be presented in October -- probably his last act in government -- will limit the drain on the oil windfall to a level not much higher than three percent, compared to 3.3 percent this year. This measure not only meets the economic recommendations of the International Monetary Fund, but will also have the political advantage of complicating the task of the likely future government, which has vowed to cut taxes while increasing spending on health and infrastructure.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today flush with cash norway ponders use of petrokroner Arab Today, arab today flush with cash norway ponders use of petrokroner

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today flush with cash norway ponders use of petrokroner Arab Today, arab today flush with cash norway ponders use of petrokroner

 



Arab Today, arab today
Arab Today, arab today Arab tradition glitters in Colombia

GMT 12:59 2017 Thursday ,19 October

Arab tradition glitters in Colombia
Arab Today, arab today Second US judge orders freeze

GMT 08:04 2017 Thursday ,19 October

Second US judge orders freeze
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Silent Republicans have their reasons

GMT 16:55 2017 Thursday ,19 October

Silent Republicans have their reasons
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Hussein Fahmy happy for honoring in festival

GMT 07:47 2017 Tuesday ,17 October

Hussein Fahmy happy for honoring in festival
Arab Today, arab today Climate-disrupting volcanoes helped topple

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 09:31 2017 Monday ,16 October

Dalal Abdel Aziz happy for “Seventh Neighbor”

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 18:29 2017 Sunday ,03 September

Designer produced new set of ornaments

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 23:42 2017 Monday ,16 October

Better Marriages Make

GMT 06:52 2017 Monday ,16 October

Airbus CEO says won't cling to job

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 19:29 2017 Tuesday ,29 August

Yomna: decoration leaved positive effects
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday