restructuring, Korona | Political storm for Erna

It is impossible to recognize our community as we remembered it before the close of March 13. Entire industries have been closed, schools and kindergartens have been closed, and home offices have been established for most people. This brings a dramatic slowdown in value creation of 14 percent during the month of March alone, according to Statistics Norway.

With an unemployment rate of 408,400 people, including layoffs, the unemployment rate has never been as high as 15 percent! Of these, 258,400, or 9.2 percent, were completely unemployed. Now hairdressers are running, the donation in Oslo has been opened and unemployment is falling, thankfully.

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At the same time, the Norges Bank predicts that the Norwegian economy will decline 5.2 percent in 2020. This is a much larger drop than during the 2008-2009 financial crisis.

Therefore, Norges Bank lowered its key rate to zero last week. It is the maximum stimulus of the economy at a time when pessimism prevails.

Among other things, they write: “Low interest rates cannot prevent the corona eruption from having major consequences for the Norwegian economy, but they do help to slow down the recession.” As the situation returns to normal, low interest rates will help activity recover faster. It can reduce the risk of unemployment to a high level. “

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We have to ask our politicians:

Will there be a lost generation of youth without jobs?

Will Norway experience a long recession as falling oil prices peak at the crown and shut down industries?

Will thousands of creative and talented startups go bankrupt due to chaos and weak markets?

Extraordinary packages before the revised budget

In a time of frustration, it is important to find different tools that contribute positively. In addition to zero interest rates, the authorities have spent extraordinary money on crisis packages. The subsequent summary may show NOK 300-400 billion in the use of extra oil money.

Crisis packages are being discussed for almost every industry or industry to save jobs in Norway. And more general schemes like cash support to cover up to 90 percent of inevitable fixed costs. Additional improvements in layoff schemes so employees have a possible job when the worst is over.

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Given that so many crisis measures have already been put in place, GNI will be one of the most normal we are presenting this spring, Finance Minister Jan Tore Sanner said a few weeks ago. At that time, a new crisis package (proposed to the Storting) was announced in late May / June.

Then there is phase 3 of the crisis work that begins with classical counter-economic policy à la Keynes. It will be a combination of investment in transportation and infrastructure, renovation of schools, as well as competition and higher education. Will tax cuts benefit the underpaid for years to come?

How many good young adults will need a place to study in the wake of the first phase of the crown crisis?

We may be talking about 50,000 to 100,000 new students lining up at different educational institutions if the job market is down for 1-2 years.

A strengthening of Erna

Based on Stoltenberg’s experience of the financial crisis and electoral victory in 2009, and in several recent polls, Prime Minister Erna Solberg has strengthened her position in the crown crisis. At the same time, Frp loses, and the left and KrF are below the barrier.

However, this means that parliamentary elections in 2021 have become more open than many predicted before the crisis hit communities, industries and the entire Norwegian economy.

Any major regional initiatives in the future, such as counties, municipalities, or transportation, can be used strategically in the period against next year’s elections.

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No one knows how long this will last, but Tuesday’s revised budget will reveal several billion new ones. And important forecasts for the labor market. We live by each other’s work and these wave effects.

A perhaps unexpected effect of the crisis is that Erna will have a greater opportunity to serve for 12 years as Prime Minister.

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See the latest forecast from Statistics Norway here.

Today’s song: «Riders in the storm »- The doors.