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Norway's PM warns against tapping oil fund

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Norway's PM warns against tapping oil fund
Prime Minister Erna Solberg and Finance Minister Siv Jensen at the budget conference that began on Monday at Hurdalsjøen in Akershus. Photo: Terje Bendiksby/NTB Scanpix
18:08 CET+01:00
Norway's Prime Minister has warned against tapping further into the country's $850-billion oil fund in the coming budget -- warning that this would overheat the economy and harm the competitiveness of Norwegian industry.
"Something that has pulled in the right direction is that the Norwegian crown has not been as high during the past six months and has therefore contributed somewhat positively to the competitiveness of Norwegian companies," Erna Solberg told Reuters in an interview on Monday.  "Using a lot of oil money could push it the other way." 
 
Solberg's statement seemed directed at cooling the expectations of her coalition partners, the Progress Party, which argued for greater use of the oil fund in the run-up to last year's election. 
 
The two parties on Monday started negotiations over next year's budget, which will be their first since winning elections in September.
 
Siv Jensen, the country's finance minister and leader of the Progress Party, made a call for tax cuts on Monday, arguing that more efficiency in government could reduce costs without scaling back the welfare state. 
 
"There is a difference between taking away welfare benefits everyone thinks are appropriate and necessary, and making cuts through doing tasks better," she told the country's Dagens Næringsliv newspaper. 
 
Solberg said she expected economic growth to slow in the coming years.
 
"Norway's economic growth will be somewhat lower this year and next than in previous years," she said. 
 
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