On Sunday evening, Prime Minister Jonas Gahr Støre (Labor Party) held a new press conference on the Ukraine situation.
The government has decided to freeze the 27 billion kroner the Petroleum Fund has invested in Russia.
In addition, Støre informed that the Oil Fund will eventually sell out of Russia.
Harald Magnus Andreassen, chief economist at Sparebank Markets, says that the decision will affect the fund as much as a normal day in the market.
– Even at the top, the position accounts for only 0.2 percent of the fund’s value. Most days, the fund experiences more than 0.2 percent in fund value change. But it’s a lot of money, it’s around 27 billion. It is a lot of money for a country, Andreassen emphasizes to Nettavisen.
Also read: Norway freezes investments in the oil fund in Russia
May take years
At the same time, it is not certain that Norway will lose the money. A lot can happen.
– It depends on how we pull out. We will lose everything if Russia confiscates the money. It can take years to withdraw the money. If the sanctions we have now introduced are continued, it will not be easy to get money in and out of Russia, the economist points out.
If the situation improves over time, another solution would be to sell down when it becomes possible to get some of the money back.
– Like others who have invested in Russia, we have made a misjudgment. The money is not necessarily lost, but the values are halved and more than that. Investors have suffered heavy losses during wars, revolutions and hyperinflation. This is why you have to spread your investments in many countries. A mixture in Norway and abroad, he says.
– But the fact that the Oil Fund loses money is what I worry least about today, Andreassen concludes.
Also read: The Ministry of Foreign Affairs advises against all travel to Russia
– It is symbolic politics
Finance professor Espen Henriksen at BI Norwegian Business School is not impressed with the news from the press conference on Sunday night.
– It is a right decision, but we should not have any illusions that it is a contribution that weakens Russia’s economy or the possibility of waging war. This has an element of symbolic politics, says Henriksen to Nettavisen on Sunday night.
Although it is a right decision, it is not obvious that it is right that it is the Government that made it, according to the professor.
– The Petroleum Fund has an ethics council that will normally make this type of assessment. It was established to distinguish between politics and government. It is not clear why the Government had to get ahead of the Council on Ethics.
In addition, Henriksen emphasizes that he does not think this will help de-escalate the situation.
– We should have no illusions that this decision is an important contribution to weakening Russia’s economy or ability or willingness to wage war. The government could therefore perhaps have been a little more humble when they presented this news.
Henriksen believes this is the wrong focus.
“Støre should prioritize measures that would make it more difficult for Russia to wage war or make it easier for Ukraine to defend itself,” he adds.
The government could have given grants that really mattered, Henriksen believes.
– The ban on the export of weapons could be lifted in addition to full support for joint international measures such as exclusion from Swift and freezing central bank reserves, the professor says.
Henriksen points out that we have lost quite a lot of money by having been invested in Russia.
– But it has already happened. This is a consequence of the fact that the fund was invested in Russia.
At the same time, the finance professor believes that we should not let economic assessments decide how and when we should withdraw.
– This is an ethical assessment. We do not want to receive dividends from companies if the companies are closely linked to Vladimir Putin’s regime. It is probably right to withdraw the Oil Fund from Russia even if it does not change their ability or willingness to wage war in Ukraine, he concludes.
Also read: Kyiv rapporteur: We are surrounded
Makes a plan to sell
The online newspaper contacted Norges Bank Investment Management, and asked, among other things, what consequences it will have for Norwegians’ wallets that Norway freezes the oil fund’s investments in Russia and that the oil fund will withdraw completely.
Line Aaltvedt, press officer at Norges Bank Investment Management, has only given a general comment:
– We relate to the government’s decision. We are now freezing the fund’s holdings in Russia, which means that we will neither buy nor sell shares.
In addition, Norges Bank in collaboration with the Ministry of Finance will make a plan to sell us out of the Russian market, she tells Nettavisen.
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