Norway offers huge loan to IMF

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The Norwegian government extended a helping holiday hand to the world’s troubled economies on Wednesday, offering to lend NOK 55 billion (around USD 10 billion) to the International Monetary Fund (IMF). Prime Minister Jens Stoltenberg said the loan was meant “to help stabilize the European and international economy,” but claimed it would be good for Norway, too.

Prime Minister Jens Stoltenberg announcing the loan offer to the IMF on Wednesday morning. PHOTO: Statsministerenskontor (SMK)

It will, said Stoltenberg of the Labour Party, “contribute towards securing the Norwegian economy and Norwegian jobs.” He stressed that the loan will also be repaid, generating an estimated return of around NOK 1 billion.

“This isn’t a gift, but a loan with interest and good security,” he said at a pre-Christmas press meeting on Wednesday morning.

Stoltenberg noted that many of Norway’s major trading partners and political allies are now in “a difficult economic situation.” Norway’s petroleum-based economy and the state’s management of the country’s oil wealth, meanwhile, has kept the Norwegian economy vigorous despite a few signs of slowdown on the horizon.

Last week, Norway’s central bank (Norges Bank) cut interest rates in a move aimed at stimulating the Norwegian economy and boosting exports. Stoltenberg’s loan initiative can be viewed as another attempt to help secure export markets for Norwegian goods.

“We have a strong interest in economic and financial stability internationally,” said Stoltenberg, who’s been warning for months that the debt and euro crises will eventually affect Norway’s otherwise strong economy.

The prime minister’s office noted that countries in the euro zone promised earlier this week to make EUR 150 billion available to the IMF, while other countries both in and outside the EU have also declared willingness to lend to the IMF.

Assuming approval for the loan from the Norwegian Parliament, where Stoltenberg’s government parties have a majority, the Norwegian funding will be made available for the IMF’s general lending operations. The money won’t be earmarked for a certain region or group of countries, but available for all IMF member countries, according to Stoltenberg’s staff.

Views and News from Norway/Nina Berglund

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