News analysis: There were many economic warnings in Norway this week, both before and after the Norwegian central bank announced that interest rates would be cut in half to prevent inflation from rising. DPlaying national wealth on your own, supported by high oil and gas prices associated with the war in Ukraine, may help prevent growing resentment from elsewhere in Europe.

Norway has been drilling and producing oil and gas for over 50 years, but is now making even more profits after the oil and gas prices soared in the war in Ukraine. Photo: Harald Pettersen / Statoil

Thursday’s announcement of a rate hike was surrounded by the extraordinary fate and darkness of the current Norwegian economic outlook. However, Norway is still very wealthy and is now annoying several other countries in Europe. They believe it is unfair that wealthy Norwegians simply continue to be wealthy, or that Russia’s President Vladimir Putin actually benefits from the war that began against Ukraine four months ago. increase.

For example, Poland’s Prime Minister Mateushmoraviecki recently described Norway as a small country with a population of only 5 million and a huge oil and gas surplus.newspaper Aftenposten I received a report from a Polish TV station TVN24 In late May, Moraviecki also suggested that Norway was unjust enriched from the war in Ukraine.

“Something is wrong,” Claimed the Prime Minister of Poland during a television session of the Youth Dialogue Conference. He believes Norway should share more of its “huge” surplus.

Mateusz Morawiecki believes Norway should share much of its wealth with Ukraine. Meanwhile, Poland has received millions of dollars over the years as part of Norway’s trade agreement with the EU.Photo: Wikipedia

“Norwegian friends, this isn’t normal. It’s not fair,” Marawiecki complained to the camera. “Of course, by chance, the war in Ukraine is not Norwegian’s fault, so you are indirectly benefiting from the war caused by (Russian President Vladimir) Putin, but you are indirectly from the war. We are profiting. We need to share quickly because we need it not for Norway, but for Ukraine and those most affected by the war, “he said.

Many Germans and other Europeans also suffer from high gas prices. At some point shortly after the war began, Norway was collecting 2.4 billion Norwegian krone worth of gas daily, often at European expense. Gas sales to Europe are reported to account for 259 billion Norwegian krone between January and March, about five times the pre-Corona and pre-war years. DN.. last week, DN You can also report that gas prices rose to their highest levels in three months in May. When the gas terminal of the state-owned oil company Equinor in Melkoya, on the outskirts of Hammerfest, was finally able to reopen last month after the fire in September 2020, it soon began to generate huge sums.

Dealing with discomfort
As Norway continues to report record trade surpluses, more people like Poland’s Mateus also believe that Norway should share more of its wealth and quickly. Economist and professor emeritus Knut Anton Moke admitted that Norway had become a war profiter as early as March.Question, he wrote in the newspaper Dagens Næringsliv (DN), This is how Norway deals with discomfort. Immediately after Putin invaded Ukraine, there were calls for wealth sharing within Norway.

Harald Magnus Andreassen, Chief Economist at Sparebank1 Markets, said: DN As early as mid-March. At that time, the value of Norwegian oil company Equinor crossed the iconic border of more than SEK 1 trillion, and its shares were skyrocketing on the Oslo Stock Exchange. In Norway, high oil and gas prices have always been driving prosperity and are still prospering after stock prices have fallen.

As Norwegian oil wealth pervades society over the last few decades, Norwegians have become associated with relatively large homes, villas, boats, and especially expensive cars. This license plate in the Oslo parking lot also has a personalized license plate that roughly means “happiness”. Photo: NewsInEnglish.no/MortenMøst

Espen Henriksen, a professor of finance at the Norwegian business school BI, argued that there was a “moral imperative” for Norway to send more assistance to Ukraine and elsewhere. Economics professor Halber Melam said the restrictions placed on spending and donating oil income do not apply to “abnormal situations” such as pandemics and the widely criticized war against Ukraine in Russia.

Some are simply unscrupulous about how Norway has benefited from the war. “We’re not talking about cynical weapon smugglers here, we’re talking about our country,” wrote investor Carsten Hjelde and sustainability expert Petter Fulli. .. DN The beginning of this spring. They propose to obtain average oil and gas prices over the last five years and invest all of them in a “dedicated solidarity fund” to help rebuild Ukraine and invest in “green energy projects”. did.flat DN In itself, it edited the “we should give” benefits that were clearly produced by the war. “In a sense, this money belongs to those who are already fighting in the trenches of Ukraine. They are fighting not only for their own country, but also for democracy in the West. They are very dangerous for Norway. Having died in the war, we had to think twice before sending weapons to help them protect themselves. “

Norwegian politicians point out To accept Ukrainian refugees, support other countries that accept refugees, and donate weapons and medical assistance to Ukraine. Aftenposten Nonetheless, Norway reported that it lags behind much smaller European countries such as Estonia and Latvia in terms of direct support to Ukraine as a percentage of GDP. At least the other nine countries provide relatively more funding than Norway. Parliament wants the government to better explain the amount sent to Ukraine and how it is used.

Treasury Minister Trygve Slagsvold Vedum (right) and Prime Minister Jonas Gahr Støre argue that Norway needs to be aware of current spending, despite billions of dollars flowing into the national treasury every day. They are shown here in an early session of state budget negotiations. Photo: Statsministerens kontor

Treasury Minister Trygve Slagsvold Vedum of the Center Party has denied that Norway is enriching itself at the expense of gas customers in Ukraine and Europe. The Putin war brought much higher oil and gas revenues, but Vedham gained the value of Norway’s huge oil fund (oil revenues are hidden for future generations) with new revenues. He emphasized that he lost more in the global stock market than he did. Vedum emphasized the need to save money and pay attention to rising public spending in Norway in collaboration with this year’s recently revised state budget in Norway.

Defense spending is rising, especially as Norway borders Russia, but Prime Minister Jonas Gahr Støle agrees with Vedham. Krone.. He argued that it was “lucky” that Norway was still experiencing economic growth, “but that also means that we need to keep our national budget down.” He wants to avoid overheating his budget. Defense has taken on new implications, but promises from other campaigns last year may need to be postponed in support of defense. We need to accept more refugees and strengthen our overall readiness.

Meanwhile, Norwegian investors are pouring money It re-entered the oil industry and contributed significantly to the sadness of climate change activists. Among the investors is John Fredriksen, who is knowledgeable and experienced. John Fredriksen has recently become the largest owner of yet another oil tanker company.

The Polish Prime Minister wants Norway to send more money to support Ukraine, but climate activists and some politicians in the country say that Equinor will invest its profits in renewable energy projects. I want Equinor claims to have ambitious plans for alternative energy, but seems more interested in continuing to look for more oil and gas. Other Norwegians are constantly calling on the government to use oil revenues to improve infrastructure and further enhance social welfare. As always, the government responded by focusing on how the use of petrocurrency is restricted domestically so as not to overheat the economy, just as the central bank raised interest rates in the same way. increase.

Tens of thousands of boats are moored along the Oslofjord, as in one of the major marina of the Norwegian capital. Photo: NewsinEnglish.no

Norwegians have generally benefited from all the wealth of oil, and there is no doubt that they will continue to benefit. Despite all recently expressed concerns and new economic pessimism, Norwegians still spend record amounts on homes, villas, cars and boats. After the Corona crisis, consumer demand surged as restaurants reopened and airlines began flying again. There is a reason for fashion company Dior to open a new store in the so-called high-end “fashion district” of Oslo, and for Porsche to recently distribute a 36-page catalog in the local media. Someone recently paid NOK 6.12 million (US $ 612,000) to a 27 square meter cottage on the island of Oslofjord without a toilet.

Obviously there is still money to burn in Norway, so some of the complaints about soaring electricity bills and oil prices for pumps seem out of place. Linda Tofteng Eliassen, consumer economist at Sparebank1NordNorge, told the Norwegian Broadcasting Corporation (NRK) this week: “We Norwegians have a lot of money. I think people thought they were living in a normal economy, but they weren’t.” Eliasen said rising interest rates. I believe that Norwegians will be able to get more in touch with reality.

“The interest rates were so low that it was unnatural to afford to buy things,” she said. She admitted that some Norwegians would feel a pinch of higher interest rates in addition to higher electricity, fuel and food prices. “But in most cases this is not a crisis, it is something that needs to be addressed.” And their government will continue to be pressured to share that wealth, or maliciously dangerous abroad. Affect.

newsinenglish.no/Nina Berglund

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