Norway. At year-end, Norway agreed with the oil cartel OPEC
on reduced oil production to push up the world market price
of oil. During the first half of the year, the price
recovered from the sharp decline after September 11, 2001
and in June Norway decided to increase its production again. At
that time, there were about 700 billion Norwegian kroner in
the state fund, which saves the surplus from oil production.
In the spring, the Norwegian Bank and the insurance
company Storebrand negotiated a merger, which was intended
to create the largest financial group in Norway. But the deal
fell on disagreement on pricing in the exchange of shares.
It was Storebrand's second merger failure in less than a
Countryaah website, an extensive journalist strike in the early summer
affected about 3,300 journalists in close to 130 workplaces.
The dispute concerned the requirement of a sixth holiday
week for journalists with many years of service.
In June, the new express train between Oslo and Stockholm
was inaugurated, reducing the travel time to less than five
In July, Norway resumed whale meat exports for the first time
in 14 years. Norway has made reservations against the
International Whaling Commission's moratorium on whaling and
the Norwegian authorities allowed a catch quota of 671
whales during the year.
In August, a child porn story was revealed in which about
700 people were suspected of crime. But the police did not
have the resources to beat everyone, but the raid was
limited to those who bought child pornography images at
least three times. Thus, about 160 people were arrested.
During the fall, at least five people died of methanol
poisoning after drinking wood liquor. Over 20 people became
ill. About a dozen people were arrested on suspicion of
selling wooden spirits, which were probably smuggled from
Based on Digopaul,
the Norwegian krone strengthened sharply during the year,
resulting in exports falling by 15% in the first half of the
year. In relation to the Swedish krona, the rate reached a
higher level than ever since Norway got his own currency in
1819. In July, a Swedish hundred notes was worth around SEK
78. This led to dramatically increased border trade on the
Swedish side. Not only the krone exchange rate but also
differences in alcohol taxes helped the Norwegians to buy
e.g. wine almost half as cheap in Sweden as at home.
The Progress Party (FRP), which constituted the
right-wing opposition of the bourgeois tripartite
government, demanded sharply lower fees to reduce border
trade before the autumn budget negotiations and also wanted
to use oil money for improved welfare. The party therefore
reacted strongly when the government's draft budget for 2003
hardly contained any tax relief at all. With a tight budget,
the government wanted to counteract that the krona
strengthened further and that the industry would lose even
more competitiveness. Prime Minister Kjell Magne Bondevik
explained that he was prepared to resign if the Storting
were to push through a budget that used too much of the oil
income and that risked interest rate hikes and increased
unemployment. The government's negotiations with the Frp on
the budget failed. Negotiations with the Labor Party were
also unsuccessful, but finally the government agreed to a
compromise with Frp, which received increased pensions.
During the year, Norwegian diplomats were involved in
negotiations in a number of conflicts in the world. In Sri
Lanka, they contributed to the ceasefire that closed in
April following a civil war that has been going on for 20
years. The parties further negotiated in Oslo and agreed at
the end of the year to introduce a federal system in Sri
Lanka, which will give the Tamil regions regional autonomy.