The Norwegian krone has weakened significantly recently. Now 1 dollar costs almost 11 kroner, 1 euro closer to 12 and the pound close to 14 kroner. So far, the politicians have not intervened with measures to strengthen the krone in the short term, but in this interview with news, Conservative leader Erna Solberg states that it is a problem that the krone exchange rate is as low as it is now. – Yes, it is a problem because we are all getting poorer, says Solberg. – It gives a certain stimulus to the export industry and to the tourism industry because there will be more tourists coming into Norway. But it is a problem because it creates a lot of instability and uncertainty. And it is a sign of less confidence in the Norwegian krone. – So what is Høyre’s answer? – There are no short-term, simple solutions. The long-term strategy is to build up productivity and competitiveness, says Solberg, who will launch his own restructuring plan on Wednesday. It contains measures that the Conservative Party believes will increase productivity and growth in the Norwegian economy. – If foreigners believe in Norway as a business location, then the money will also move in more easily. But it doesn’t happen overnight, and there is no quick fix, she warns. Points to Støre Among economists, there has been an ongoing seminar on why the krone is as weak as it is now. The devaluation of the krone started around ten years ago, while Solberg was prime minister. But development has accelerated recently, she points out. – Has the Støre government’s policy contributed to the krona being so weak? – Yes, but the government does not have the main responsibility. It is about the Norwegian krone being a small currency in a troubled sea. But the government has pursued a policy that has not been a counter force to what is happening either, Solberg replies and continues: – The government has not created credible framework conditions for value creation in Norway, but has contributed to unpredictability and a massive increase in public budgets. All of this helps to reduce confidence that Norway will manage the transition. – So the krone would not have weakened so much if the Conservatives had governed? – At least we would have had more counter-force. And then there are troubled times. The main reason is that the Norwegian krone is vulnerable in a troubled world. But we would have had a little more ballast if we hadn’t been through all these unpredictable experiments that the government has had, says Solberg. Crown committee So far, the large majority in the Storting have called for the mandate of Norges Bank and pointed out that it is the central bank and not the government that should have the main control over what is called monetary policy. But recently there have been new signals. Liberal deputy leader Sveinung Rotevatn has opened up about linking the krona to the euro, as Denmark has done. He also wants a separate krone commission, which will assess why the krone is so weak and discuss measures that can be taken. COMMITTEE: Erna Solberg says there is no quick fix for the krone, but suggests that a separate krone committee be set up. Photo: Frode Fjerdingstad / news Now Rotevatn and Venstre are getting support from their preferred government partner, the Conservative Party. Erna Solberg supports the idea of setting up a crown committee with experts. – The most important thing is to get an analysis tool, a basis for why the Norwegian krone is weak and input on what can be done to strengthen it, says Solberg. – But do you really need more knowledge, or politicians who dare to take a stand on what should be done? – If we are going to move away from what most other countries have, namely an inflation target, then we should at least be very sure of how this is going to be read. We can quickly send the krone exchange rate into a gallop if we don’t do that, she says. Vedum: Not applicable The claim that the Norwegian krone would not have been so weak if Solberg and the Conservative Party had governed the country causes Finance Minister and SP leader Trygve Slagsvold Vedum to react. – Speculative from Erna Solberg, he says. – You only have to look at the Swedish krona or the New Zealand dollar to take two currencies of similar size. It has been a very similar development. There has been so much unrest around us, continues Vedum. DUO: Finance Minister Trygve Slagsvold Vedum will not change the mandate of Norges Bank and central bank governor Ida Wolden Bache. Photo: Gunnar Bratthammer He flatly says no to the proposal from the Conservative Party and Liberal Party for a crown commission or expert committee. – There is no reason for that. There are various experts who speak out in the media every single day. We have a clear monetary policy and a clear task for Norges Bank. There is no reason to put a separate expert group on it now. It is not an answer to what Norway needs, says Vedum. – Is the krone exchange rate too low now, do you think? – We do not have a fixed exchange rate policy in Norway. Monetary policy lies with Norges Bank, and it is good for Norway over time to have its own currency. Will not change A plan for restructuring Norway, better conditions for business and increased productivity. That is Erna Solberg’s solution to the problem. But neither will these measures have any immediate effect on the krona, she acknowledges. – Not in the short term. In the slightly longer term, it is my ambition that we will pursue an industrial policy and a restructuring policy for Norway that will make Norway an attractive country to invest in. – The left has advocated linking the Norwegian krone to the euro. Is that a good idea? – We investigated this 20 years ago from the Conservative Party’s side and have chosen to stand by the fact that we in Norway should have our own currency that is not tied to the euro or anything else. It may be that other solutions are a possibility in the future, but that It is far too early to conclude that now. – How weak can the krona become then, before the politicians say that “now we have to do something”? – There are no quick measures as long as we have the framework we have. This concerns markets that are both speculative and troubled, but which also concern what faith you have that you are actually able to manage. So it’s hard to put a limit on where we have to step in and do something else. Published 10.08.2024, at 15.07 Updated 10.08.2024, at 15.46
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