– This is serious – VG

Updated less than 10 minutes ago

–

– This is driven by international conditions, says Støre to VG.

The war in Ukraine, the price of keeping NATO countries out and all the unrest that the war entails, mean that prices are galloping upwards in Norway and in a number of other countries.

It can hit hard in Norway as well, the Prime Minister acknowledges:

– I am worried that there may be groups that are hit particularly hard, those with weak finances, families with children, single people, pensioners and people with high loans, he adds.

– Strong and healthy

But he also has another message:

– Norway has the prerequisites to manage this better than most, because our economy is strong and healthy. And we will be happy that we can get up to 100,000 more people into work during this year. he says.

Støre has been in Finland since Sunday afternoon, visiting Finnish President Sauli Niinistö. At the summer resort Kultaranta (Finnish) or Gullranden (Finnish-Swedish) on the west coast of Finland, they have discussed security policy at a seminar with Jens Stoltenberg, and with the Finnish political elite.

And they’ve been to the sauna together, of course.

Gloomy forecasts

Statistics Norway’s new and gloomy forecasts came before the weekend:

** The rise in prices is increasing, especially for necessary goods such as food.

** Electricity prices are already higher.

** The same applies to other forms of energy.

** Statistics Norway now predicts one double interest rate jump already in June.

Confronted with this picture, the Prime Minister says:

– These are challenges that all countries in Europe now face. This is what my colleagues are most worried about. President Niinistö said that the biggest challenge now is increased living costs for people. I want to emphasize that this also affects Norway, says Støre.

– The increased purchasing power from the wage settlement this spring can now be eaten up, and people can have less purchasing power. What is the government doing about it?

– It is true, as it looks today, that prices will be challenging. But this is the responsibility of the parties, and I notice that the parties say they will follow closely, he says.

– What can the government do to curb the effect of increased inflation?

– There is one thing we should do, and then there is something we should not do, the Prime Minister answers:

– We will pursue a policy of fair distribution. The tax breaks will go to those with lower incomes. Those with deferred finances will get cheaper kindergartens, cheaper SFO and lower ferry fares. Then we have increased the housing benefit and the social benefit. And we will pay special attention to how the situation of vulnerable groups develops in the future.

–

– Tightens

And this is what the government should not do:

– We should at least not get higher interest rates on top of this, as a direct result of the state’s spending. That is why we must hold back, he says.

Støre refers to the extra bill of NOK 60 billion after the pandemic, the power package, and increased spending on defense and refugees.

– In the revised national budget, which I hope is ready this week, we have cut almost 20 billion kroner. It is the strongest tightening in a very long time.

Støre highlights the electricity subsidy as the government’s most important measure. He says that without this measure, electricity prices could have driven up inflation by perhaps another two percentage points.

– It reaches most people and has great social significance. Fuel costs are also challenging for many.

VG’s power calculator: Check how much you get in power support

No fuel relief

– But you do not want to do anything with fuel prices before the summer?

– Yes, the Minister of Finance has said that, and I confirm that. Then you have to spend very many billions with very limited effect, he says.

– Can the government in the short term prevent a double interest rate increase already in June?

– I do not want to comment on what Norges Bank will do and not do. But this is serious. It hits all countries. The time for easy outbursts, overbids and unnecessary commitments is not now. But then we must also have confidence that the Norwegian economy is doing well, and that Statistics Norway, after all, predicts a soft landing.

– Is the price of war now getting closer to Norwegian families?

– Norway is now strongly reminded that we are strongly exposed to the worlds around us. This applies to energy prices, food prices, supply lines from abroad. Members of Bondelaget say they have to wait a year for parts for a broken gearbox on the tractor. Other countries are hit harder, and business is shutting down as a result of partly high energy prices but also the lack of energy. Norway has done well so far. But we have to be honest with each other. This is a new situation that places new demands. Some of what we had planned must now be postponed for the sake of more important issues, says Støre.

Why is electricity so expensive? Here is a quick introduction to why it is so expensive – and what affects the price.

PSST! Even if interest rates go up, you can save several thousand dollars on your mortgage a month. Here is Hallgeir Kvadsheim’s best trick – and three steps everyone should do.

–