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Wednesday, May 29, 2024

Stronger krone can prod wage talks

Norway’s currency, the krone, has been building up strength again in recent weeks, just as the country’s trade union and employer organizations sat down for annual wage negotiations. Talks broke down this week between two of the largest groups, but the strength of the kroner may aid mediation.

The trade union federation Fellesforbundet broke off talks on Tuesday with Norsk Industri, representing employers. Union boss Arve Bakke had claimed heading into the talks that he would make only moderate wage demands, but negotiations stalled with no concrete demand on the table.

Meanwhile, the krone has steadily been getting stronger, with one US dollar now costing around NOK 5.96 kroner instead of the NOK 6.2 just  few weeks ago. Kyrre Amdal, senior economist at DNB Markets, told newspaper Dagens Næringsliv (DN) that may dampen pay demands because a strong krone hurts exports and employers’ potential profitability. A strong krone also can mean lower price growth, giving consumers stronger purchasing power and not just when they travel abroad.

Fellesforbundet and Norsk Industri stated talking on March 10 and constitute what’s called “frontfaget,” made up of leading labour groups whose labour deals set the tone for other labour negotiations. There’s an April 1st deadline for mediation, with a possible strike from April 2 if there’s no settlement. Other labour negotiations hinge on the results.

“We haven’t agreed on anything,” Stein Lier-Hansen of Norsk Industri told newspaper Dagsavisen on his way into state mediator Nils Dalseide’s office on Tuesday. “We can’t tolerate any new costs that will make us even less competitive than we already are. We haven’t received any pay demands yet but they probably won’t make things easier.”

Pensions are among the biggest problems, with the unions struggling to restore pension value for their members after major state reforms of the system, and employers objecting to higher pension costs. Bakke remained confident “we will find a solution” on the pension issue.

“When we make a demand, we of course think the employers will be able to meet it,” Bakke said. “But we face many more discussions on that now.” Berglund



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