Tag Archives: Nordic countries

Norway Consider Veto EU’s Bank Deposit Guarantee Directive

The Norwegian government is considering to use its veto against a new EU directive, setting a limit to the European banks deposit insurance guarantee. The proposed limit is EUR 100.000. The Norwegians banks, however, guarantees for up to EUR 250.000 of private citizens bank deposits. Norwegian minister of finance, Sigbjørn Johnsen, refuse to accept the upcoming regulations from Brussels, and says that he is considering using Norway’s right to veto any new EU directives for a period of 12 months if an agreement is not possible. If that turns out to be the case, it will be the first time Norway use its veto rights in the EU parliament.

“Yes, the veto is even considered. But the main track is to get through with our views.”

Sigbjørn Johnsen

Norwegian minister of Finance, Sigbjørn Johnsen, met on Thursday afternoon with the German MEP, Peter Simon, who is preparing the new EU directive on bank insurance guarantees for the EU parliament. Mr. Johnsen also met with MEP Burkhard Balz. “They were both nice guys,” Johsens says. “They fully understand the arguments we have, but time will tell if we get through with our case.” the experienced minister adds.

Mr. Sigbjørn Johnsen was also minister of finance in the early 90’s, and was the one who had to deal with the Scandinavian bank crisis in Norway.

In an interview with the Norwegian newspaper “Nationen,” Friday, he says the Norwegian government will consider using its veto rights to block the upcoming new EU directive on European banks deposit insurance guarantee.

The new directive, which Norway is obligated to adapt according to The EEA Agreement of 1992, sets a limit to the banks deposit guarantee of 100.000 euro.

That’s about the above the average guarantee in most European Area countries, but Norway has the highest deposit guarantee of all, equal to about 250.000 euro.

The directive is being processed by the European Parliament at the moment, and EU’s Finance Committee is scheduled to submit its recommendations March 17.

According to Johnson that means that all political groups will conclude on the case by the end of February.

The newspaper Nationen also writes that Norway plans to contact several other groups, not just the Social Democrats and Christian Democrats – who are the two largest political parties in the EU parliament.

“What we’re doing now is using all the relations we have inside the EU system. When the EU finance commissioner, Michel Barnier, comes to visit Norway later on this winter, it will also be on the agenda. We have to see what the final result is. Then we’ll decide what to do – or not to do,” Johnsen says.

“Is it a veto relevant?”

“Yes, the veto is even considered. But our main track is to get through with our views.”

Fear of Flying Money

EU finance commissioner Michel Barnier has on several occasions said that he EU worries about the Norwegian deposit guarantee, that it will result in a flight of capital.

The possibility that such movements of small deposits, followed by large deposits, might lead to a domino effect of falling banks, according to the EU.

However, Mr. Johnsen argues that an investigation of capital movements between the Nordic countries show that the Norwegian insurance scheme, (which is substantially better than in the other Nordic countries), do not have anti-competitive effects.

A Bank Champions League

The Spanish professor of economics, Rosa Maria Lastra, who is an expert on international monetary law, points out three main reasons for the new directive: 

To will protect bank customers.

To prevent banking crises, and so-called “bank runs”, where a large number of customers pulling out money from a bank at risk simultaneously. 

To make it easier for the regulators to shut down a bank, who actually should have been closed, as customers know that their deposits are protected when the bank declare bankruptcy.

Lastra believes it is important to figure out how large national banks, with branches in several countries, both in and outside the EU,  should be handled.

She proposes a “Champions League” solution, in which large international banks have an EU deposit guarantee, while the national banks have a national deposit guarantee.

No Comments

No other members of the Norwegian government are willing to comment on the finance ministers statements.


Prime minister Jens Stoltenberg refuses to say whether it will be necessary to veto the EU proposal that will reduce the Norwegian guarantees on bank deposits by more than 50%.

“I will never answer that,” he says when asked about the possibility of a veto against the deposit insurance directive.
“We are in close dialogue with the EU on this matter. It is not right to speculate on whether we want to use the reservation clause or not. We have succeeded before in getting through our opinions through,” Mr. Stoltenberg says.
And it’s not the first time the Norwegian government consider veto new EU regulations. But somehow amazingly a solution has always been found in the last minutes.
In any way – it  will probably not matter much if the Norwegians refuse the directive or not.
The nation is not a full member of the European Union, and the right to veto a directive from Brussels is limited to 12 months.
And it is also an open question if the EU even will accept a Norwegian veto in this case.

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Related by the Econotwist’s:


Filed under International Econnomic Politics, Laws and Regulations, National Economic Politics

The EU Files: USA See Norways Military Proposal As Ridiculous

First we find that the US Embassy in Oslo for years have been requiting retired police officers to spy on Norwegian citizens, without anyone knowing anything about it, and now we find that the former ambassador to Norway, Benson Whitney, more or less have buried the Norwegian proposals for a future military strategy in the Nordic region. Mr. Whitney right out ridiculed the plans for a renewed Nordic military strategy put forward by former Norwegian foreign minister, Thorvald Stoltenberg, newly leaked documents by WikiLeaks show. The Norwegians are generally very tolerant people, there is a limit.

“The proposals are dreams in polar fog, but may be useful for keeping an eye on polar bears and Russians-”

Benson Whitney

The US ambassadors irrelevant remarks came after the 74-year-old Thorvald Stoltenberg in 2009 put forward 13 ideas for military co-operation. including a NATO-style mutual defense pact among the Nordic countries. Mr. Stoltenberg, highly respected among international politicians, spent several years working on the proposals. But as a result of Mr. Whitney’s mockery, the leaders of  the Nordic and Baltic countries has very little to debate when the meet with the UK prime minister next week to discuss the topic.

Of the 13 proposals, the US ambassador predicted the Nordic mutual defense plan as the most unlikely.

Thorvald Stoltenberg

“Officials including the PM’s foreign policy adviser and the foreign ministry’s political director have privately indicated to us that there is little or no interest in a Nordic solidarity declaration within the Government of Norway,” he reportedly said.

(Despite the fact the Norwegian prime minister, Jens Stoltenberg, is Thorvald Stoltenberg’s son.)

On joint surveillance flights in Icelandic airspace, he added: “Surprisingly, Norwegian officials have been very critical of this proposal … expressing strong dislike for this item.”

The former US ambassador seem to know a helluva lot more about what’s going on inside the Norwegian government than most Norwegians do!

On diplomatic and consular co-operation, Mr Whitney said: “Co-operation between foreign services is much more difficult and will likely be limited to countries where none of the Nordics have representation now.”

Benson Whitney

However, in his concluding remarks, Whitney said: “Joint Nordic transport capabilities, medical teams, amphibious units, a stabilization task force and maritime awareness could be important contributions to UN, NATO or US missions.”

(Well, I assume it was the Norwegian military who provided him with transport back to the USA…)

LINK_1_ Oslo

The Swedish Connection

A separate cable, also release Thursday, illustrate the close connection between the US and Sweden at the time WikiLeaks-founder Julian Assange was arrested in Stockholm on rape charges.

In the cable, dated July 2009, Swedish diplomat Jonas Wendel told the US charge d’affaires in Stockholm, Robert J. Silverman, about sensitive issues in an upcoming EU foreign ministers meeting.

Mr Wendel spoke in detail about the position of fellow US ally Britain on Iran sanctions, but maintained some discretion.

Speaking of whether or not the EU will use tough language against Russia, he said the move is being opposed by the “usual members,” but did not name them.

LINK 2_Stockholm

The Wendel dispatch comes after Swedish diplomat Johan Frisell in 2008, in a previously leaked US cable, dished up painful details on internal EU divisions on the Georgia-Russia war.

This revelation raised some eyebrows among some senior EU officials because internal EU debates are supposed to be kept secret.

Mr. Wendel indicated that EU countries are capable of sticking together in times of crisis.

Today we may see the ironic in these statements.

LINK 3_Russia

No Knowledge

Commenting on whether EU states might withdraw their ambassadors from Iran after it detained a British embassy worker, the cable said: “Solidarity among EU members is strong, and if the discussion is emotionally charged, then the ministers might agree to a withdrawal.”

And Swedish foreign minister Carl Bildt, in a dispatch dated December 2009 and published in December 2010, gave a partly upbeat opinion on the newly-minted EU foreign affairs chief Catherine Ashton.

Mr Bildt said that he “knew and liked” Ms Ashton. He describe her as a “street fighter” with a disciplined mind for bureaucratic battles, competent and intelligent, but says she has “no foreign affairs knowledge.”

Julian Assange

LINK 4. Brussels

This is even more entertaining than the British tabloids. Thank you, Mr. Assange!

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h/t: EUobserver.com

About the links:

Since I’m not sure how long the cables will be online, I’ve made transcripts of the text files and uploaded them a few other places.

At the moment, you’ll find them here:

Link 1. Oslo Cable

Link 2. Stockholm Cable

Link 3. Russian Cable

Link 5. Brussels Cable

Read other EU files here.



Filed under International Econnomic Politics, Technology

Norway May Cut Its EU Association

Norway’s prime minister is concerned that some of the economic co-ordination measures that are to be discussed by EU leaders at a summit on Thursday may have an impact on the Norwegian economy, as all policies related to the internal market are automatically transposed into national legislation. Mr. Stoltenberg does not rule out a scenario where Norway reject its EU accession.

“This is a vicious circle.”

Jens Stoltenberg

Norway intends to stay outside the EU and the euro zone but fears that the bloc’s soaring unemployment rates and austerity measures will impact its economy, which is fully integrated in the union’s internal market, Norwegian Prime Minister Jens Stoltenberg says in an interview Thursday.

According to the EUobserver.com, the Norwegian prime minister have been talking with the “trio” leadership of the EU – EU Council President Herman Van Rompuy, Commission chief Jose Manuel Barroso and the outgoing Belgian premier, Yves Leterme, whose country will be chairing the rotating EU presidency from July 1.

Norway is concerned that some of the economic co-ordination measures that are to be discussed by EU leaders at a summit on Thursday may have an impact on the Norwegian economy, as all policies related to the internal market are automatically transposed into national legislation.

“We are completely integrated in the EU economy, more than 70 percent of our exports go to Europe, therefore we are following the economic developments in Europe very closely. We have seen some positive growth rates, but there are two major challenges: one is unemployment and the other one is debt,” Mr Stoltenberg told the EUobserver and two other foreign newspapers during his visit to Brussels on Wednesday.

In his view, Europe is still far from over its economic slump and without tackling the issue of unemployment, deficit reduction measures will not work.

“With close to 10 percent unemployment in Europe, it is of course a big problem for those without a job – one in 10 – but also for the European economy and the Norwegian one, because it means lower economic growth, increased expenditures for unemployment benefits, decreased tax revenues and overall higher deficits. This is a vicious circle.”

The austerity measures announced by several EU countries, notably Spain, Portugal and Germany, are still at too early a stage to assess.

“We’ve seen some plans and ideas on deficit reduction, but actually most countries will still have a deficit increase in 2010 compared to 2009. The challenge will be 2011,” he notes.

The euro zone‘s recent troubles, starting with the Greek crisis and followed by the €750 billion rescue mechanism for the entire euro area, have decreased even more the single currency’s popularity in the oil-rich Nordic country.

Asked if Norway is considering joining the euro zone, Mr Stoltenberg laugh and says: “No. That’s absolutely not on the agenda.”

While refusing to speculate over what economic situation his country would be in had it joined the euro, the Norwegian politician notes that there are “big differences” between EU states in managing the economic crisis, with Scandinavian countries seeing lower unemployment and deficits than many others.

An EU Associate

Home of the second-highest GDP per capita in the world after Luxembourg, Norway has rejected EU membership in two separate referendums: one in 1972 and the other in 1994. But it joined the “European Economic Area” together with Liechtenstein and Iceland.

It is part of the EU’s passport-free zone and has board members in Europe’s defense co-operation agency (EDA), police and anti-terrorism body (Europol) and border control agency (Frontex).

The economic crisis has prompted Mr Stoltenberg’s center-left government to tap the billion-euro oil revenues set aside in offshore wealth funds in order to keep the economy afloat.

In non-crisis years, the government spending is capped at four percent of oil wealth.

May Cut EU Ties

With EU leaders on Thursday set to formalize Iceland’s EU-candidate status, after the small Nordic island applied for membership last year, Mr Stoltenberg does not rule out a “Norwegian scenario,” with a referendum rejecting the EU accession.

“Whether Iceland will be a member or not depends on the result of the negotiations, especially when it comes to fisheries, and that was one of the biggest challenges we faced during our negotiations,” the Norwegian Prime Minister says.

He also points to the fact that opinion has recently swung against the EU – a development that came about particularly after the bankruptcy of the Icesave bank.

The UK and the Netherlands suggested they would put hurdles in Iceland’s EU path unless the tiny nation compensates the savings lost by British and Dutch citizens.

“Not so long ago there was a majority in favor, now it’s a strong majority against. This can shift back and forth many times before Iceland will have an actual referendum. Again, it will be the Icelandic people who will decide at the end. It’s to early to say now, but I can say they have a lot in common with Norwegians,” he says.

And that’s one of the reasons why prime minister Stoltenberg might face another referendum about Norway’s assosiation with the European Union sooner than he thinks.

With pervasive economic reforms underway, all it takes is another EU directive that requires constitutional adjustments.

Such a referendum can easily turn in to a question about the already existing EMU agreements.

Related by the Econotwist:

Deficit Crisis: Cyprus, Denmark And Finland Join The Watchlist

Norway At The End Of An Era

Norway: Storebrand Subsidiary Sued Over Insurance Contracts

Norwegian Oil Explorer Files For Bankruptcy

Norwegian Labor Costs At Record High

Norway: A Mutated Dutch Disease

Norway Is NOT An Island!

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

Norway’s PM Worried About Greek Debt (Not The Norwegian 40bn Exposure)

Here’s The REAL Norwegian PIIGS Exposure

Norwegian Pensioners Enter Bear Market

Analyst Predicts Acquisition of Norwegian Paper Giant

Hydro Issue Risk Warning In Vale Takeover Deal

Norway’s GDP Fall For First Time In 20 Years

Election Farce Throws Iceland Into Political Chaos

EU Deficit Increased By14 Billion Euro In First Quarter Of 2010

EU Officials Fears Second Depression And War

Norway’s Prime Minister Fears Social Unrest

Update: 1920-similarities


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Filed under International Econnomic Politics, National Economic Politics