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Tuesday, May 28, 2024

State rides to the Corona rescue

The usually quarreling parties in Parliament set aside political differences on Monday and got the government to further sweeten its economic crisis package for Norwegian businesses and workers. After working through the night, they announced unprecedented measures to help get Norway through its biggest national emergency since World War II.

Leading members of the opposition parties in Parliament hammered out a compromise with the government during the night that will provide more relief to both employers and employees during the Corona crisis. From left: Kari Elisabeth Kaski of the Socialist Left party (SV), Hadia Tajik of Labour, Sylvi Listhaug of the Progress Party and Trygve Slagsvold Vedum of the Center Party. The Greens and Reds also supported the emergency relief measures that will take effect immediately. PHOTO: NRK screen grab

As the Oslo Stock Exchange opened for trading with more heavy losses Monday morning, and the price of Norway’s most important export product, oil, slid by as much as 10 percent, the urgency of offering state support for employers and employees suddenly suffering from the Corona virus crisis was clear. Big, solid companies like Equinor and Norway’s biggest bank, DNB, were being hammered once again, with the stock exchange’s main index down nearly 9 percent at midday.

It’s all Norway’s small- to mid-sized companies that are perhaps most worried, with exercise studio SATS laying off more than 4,000 workers on Monday because of the state shutdown measures announced last week. Airlines SAS, Norwegian and Widerøe are also laying off thousands, while hundreds of restaurants, bars, theaters, hair salons, optometrists, cinemas and other businesses have had to close as well to prevent Corona infection.

Flexing Norway’s economic muscle
Members of Parliament must have listened to King Harald V’s address to the nation Sunday night, during which he called for “unity and confidence” among Norwegians and their leaders. “The state is stretching out its hand here,” said an unusually cooperative Sylvi Listhaug of the Progress Party at the Parliament’s press conference Monday morning to announce more relief measures.

They come as Norway braces for hundreds of thousands of more layoffs caused by businesses shut down as part of Corona containment measures. Listhaug, a member of the Parliament’s finance committee that presented enhanced measures at the Parliament’s press conference, added that more are likely if those rolling out now aren’t sufficient.

Backed by decades of a strong economy that was fueled by high prices for Norway’s North Sea oil, the state treasury has the financial muscle to dole out emergency funding when needed. Prime Minister Erna Solberg and Finance Minister Jan Tore Sanner had already announced the first two phases of their crisis package that included tax relief and deferrals, along with new funding and loan programs aimed at bolstering Norwegian business’ liquidity.

Full pay for laid-off workers for 20 days
Now workers as well can be at least “less worried” by looming layoffs, MPs noted, after confirmation that they’ll now receive full pay for the first 20 days of what the Norwegians call permittering. Their employers will only have to pay the first two days of their salaries, while the state will pick up the rest of the bill for the next 18 days.

It will leave the state ensuring full pay for nearly the first three weeks of a layoff for all Norwegian employees with salaries up to around NOK 600,000 (USD 60,000) a year. After that, if the Corona virus still isn’t contained and closures continue, laid-off workers will receive 80 percent of their pay up to around NOK 300,000 a year and 62.4 percent of the remaining amount up to NOK 600,000.

That satisfied the left-center opposition parties’ demands for a better “social profile” behind the compensation. It will ensure that lower-paid workers won’t get hit the hardest. Those earning more than NOK 600,000 a year won’t be compensated for their lost wages, but the state will cover a larger percentage of sick pay. Employers will only have to cover the first three days, with the state taking over the rest.

Sole proprietors and freelance workers, many of whom have seen their income vanish overnight, will now also qualify for state-financed sick pay after the fourth day, instead of after the 16th, and they can apply for the equivalent of unemployment benefits amounting to 80 percent of their average earnings over the past three years, up to NOK 600,000. They’ll have to wait, however, until the 17th day after income stopped flowing in.

‘Norwegian politics at their best’
Opposition parties in Parliament had already supported the government’s proposals to waive various taxes and defer payments on others, along with the liquidity-boosting measures announced Sunday afternoon. They wanted the state, however, to pick up a bigger share of losses suffered by workers and prevailed.

“This is expensive,” Center Party leader Trygve Slagsvold Vedum conceded, “but the alternative (massive bankruptcies and job losses) is even more expensive.” All the extra relief measures are expected to cost a “two-digit billion amount,” he said.

Most all the party leaders, including those in government, agree that they need to be willing to spend the money it takes “to help businesses survive” the Corona shutdown. They all thanked one another for “good and constructive cooperation,” while finance committee leader Mudassar Kapur of the Conservatives who lead the government thanked the opposition and claimed the emergency plan was a result of “Norwegian politics at their best.”

Hadia Tajik of the Labour Party was also relieved and grateful for winning more support for workers. “No one shall stand alone in this,” Tajik said at the Parliament’s press conference Monday morning.

The government, meanwhile, headed into a long-scheduled but shortened state budget conference Monday afternoon that will continue through Tuesday. With the Norwegian krone falling further to record-weak levels, and uncertainty high, several ministers admitted it will be difficult to foresee future needs, with “job number one” still being the battle against the virus itself. Berglund



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