Updates
June 6, 2012: a reader sent this to me today. A huge "thanks." Some quotes from WSJ article:
Former Norwegian conglomerate head Fred Olsen talking about Norway's energy market and government overspending, some quotes:
Later, 10:00 a.m.: Norway's banks are becoming safe havens for cash.What worries me is the age of gas, and the fact that gas exists everywhere. For Norway, this should worry us. I don't think very many understand this yet. The gas in the north [of Norway] doesn't necessarily have a market as liquefied natural gas now. So we need a gas pipeline to the continent. The question is how much gas the continent needs
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Norway's booming petroleum sector has increased its demand for goods and services to 17% of mainland gross domestic production in 2011, according to Norges Bank, fueled by high prices. Mr Olsen advised his country to streamline public services and cut public spending, to avoid becoming like Greece. "We should cut back on our current excesses. We are laughing at the Greeks, but we are just as bad [on government spending]. We can't run such an ineffective public apparatus on all fronts. It's insane. It's getting worse every year, it's ridiculous. We should turn this around and try to improve public services year by year. It's incredible how much [of the public sector] is just moving around emails."
Original Post
As European banks struggle with an increasingly unstable situation, the Norwegian government hopes it can encourage pension funds in the country to help fund further offshore oil exploration, according to Reuters.Apparently the banks are unwilling/unable to provide funding. Hmmm. Private equity.
In addition, according to the article:
... a strike by government workers, which could cripple the country's transportation industry and is expected to expand dramatically in coming days.See first comment. See also European Banking Federation at wiki.
Norway is not a member of the EU nor are they on the Euro.
ReplyDeleteNorway has some of the highest taxes and almost always ranks among highest in standard of living in the world.
ReplyDeleteThey are among the most socialist countries in the world and they are among the most successful, partially thanks to oil. Proof that liberal ideals and oil can go hand in hand. They are also extremely responsible in how they handle their offshore drilling.
"Partially" to oil? I'm trying to think of another reason Norway can afford the social policies they have.
DeleteIf only the US could emulate Norway's pro-growth stance toward Big Oil, instead of slow-rolling the industry.
Norway is also blessed with hydropower; almost 100% of their electricity comes from hydropower. One would think the country would mandate EVs.
The good news: gasoline only costs $11/gallon in Norway (fluctuates, of course): http://www.newsinenglish.no/2012/02/27/more-oil-found-as-pump-prices-soar/
http://money.cnn.com/2011/03/10/news/international/gas_prices_worldwide/index.htm
You answered your own question. They can afford social policies because of their high tax rate.
ReplyDeleteAlso, Norway isn't as "Pro growth" as you claim. Our company has offices in Norway and we're always hearing about the nightmare it is to deal with their regulations.
Venezuela has a huge wealth of oil but not the same liberal policies as Norway. Their people could live the same if the government was more socialist.
I'm starting to get mixed messages. Need to move on. We all have our myths.
Delete