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MONEY

Norway’s largest bank calls for total end to cash

Citing the “dangers and disadvantages” of cash, DNB Bank has called for it to be completely phased out.

Norway’s largest bank calls for total end to cash
Eventural relics of the past? Photo: Berit Roald / NTB scanpix
Norway’s largest bank, DNB, has said that cash has fallen out of favour with everyday Norwegians and is instead primarily used on the black market and in laundering schemes. 
 
“Today, there is approximately 50 billion kroner in circulation and [central bank] Norges Bank can only account for 40 percent of its use. That means that 60 percent of money usage is outside of any control. We believe that is due to under-the-table money and laundering,” bank executive Trond Bentestuen told VG
 
“There are so many dangers and disadvantages associated with cash, we have concluded that it should be phased out,” he added. 
 
Bentestuen said that only around six percent of the Norwegian population uses cash daily, with the numbers higher amongst the elderly. 
 
The Ministry of Finance is opposed to DNB’s proposal and the bank official acknowledged that going completely cashless “will likely take some time” but suggested that the process should be started now, for example by discontinuing 1,000 kroner notes.. 
 
Bentestuen said that the entire banking system is now outdated. 
 
“Eighty-five percent of our customers say that they never or only very rarely go to the bank. Therefore we think it is a mistake to maintain a very old structure with local branch offices. It is better to follow the customers and improve the offers where the customers are: digital,” he told VG. 
 
Finance Ministry spokesman Tore Vamraak said that although the government sees where DNB is coming from, “we have no plans to change the law in this area now”. 
 
“There are many, including the elderly, who still want to use cash and that must be allowed. Moreover, it isn’t unproblematic for privacy to make every transaction traceable,” Vamraak told VG. 
 
DNB and Norway’s second-largest bank, Nordea, have already largely stopped carrying cash in their branch offices and the Norwegian Hospitality Association has lobbied to abolish consumers' right to pay in cash at all shops and restaurants since as far back as 2013. 
 
VG readers seemed split on the proposal to completely remove cash from Norway. In nearly 200 comments posted on the article, many said that they would welcome the move since they never use cash while others alleged that scrapping cash would hurt tourists, create privacy issues, deprive children of learning opportunities and not least of all clear the way for banks to profit handsomely off of transaction fees. 

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MONEY

How do food prices in Norway compare to the rest of Europe? 

Known just as much for its high prices as its stunning scenery, Norway doesn't have a reputation as a cheap place to live. But how much does food cost, and how does it compare to the rest of Europe? 

How do food prices in Norway compare to the rest of Europe? 

Famously known for being on the pricey side, Norway has many factors that draw foreign residents, such as the scenery, wages and work-life balance. 

However, one common complaint is the high prices. Is the cost of food and groceries as bad as everyone says? 

Unfortunately, according to the statistics, Norway lives up to its reputation for expensive food and groceries. 

Eurostat, which monitors price levels across the EU, EEA and EU candidate countries, has ranked Norway as the country with the second highest price level index for food and non-alcoholic beverages.

Out of the countries monitored by the stats agency, only Switzerland had a higher price level index. A price level index measures the price levels of a given nation relative to other countries. This means that compared to the rest of the other countries measured, food and non-alcoholic beverages in Norway are the second most expensive overall. 

According to Eurostat’s data and price level index, prices in Norway were 49 percent higher than the EU average in 2021. Norway also had the highest price for fruits, vegetables, potatoes, and ‘other food’ products. ‘Other foods’ consist of chocolates, sugars, jams etc. 

READ ALSO: Why food in Norway is so expensive

In addition, non-alcoholic beverages in Norway were also the most expensive found among 36 European countries. The price of alcoholic drinks in Norway lived up to their reputation for priciness, with the cost of alcoholic beverages being 160 percent higher than the average and the second most expensive after Iceland

Scandinavia as a whole has a reputation for high prices, so how did Norway compare in this regard? 

Finland had the lowest overall food prices out of Scandinavian countries when measured by the price level index for food and non-alcoholic beverages. This was followed by Sweden, which had a score of 117, Denmark with 120 and Iceland with 139. 

This highlights that even among the Nordics, Norway is an expensive country for food. 

One noticeable trend is that the food prices in Norway are becoming less expensive compared to the European average. In 2018, food prices in Norway were 63 percent higher than the European average. Three years on, this had fallen to 49 percent. 

Even though the prices are high, is it really that expensive when considering wages? 

While food is certainly more expensive in Norway than in most countries, wages are also considerably higher. 

For example, the average monthly salary in Norway was 50,790 kroner per month in 2021. This equates to just over 5,000 euros. In 2022, the estimated monthly average wage in the EU was around 2,570 euros. However, it’s worth pointing out that large differences exist between EU countries. For example, the average monthly wage in Bulgaria was estimated to be around 852 euros, while in Denmark, it’s estimated to be about 5,979 euros (44,514 Danish kroner). 

Therefore, a more accurate way of measuring the true cost of food would be to measure how much of a household’s monthly income is spent on food. 

In Romania, food made up more than a quarter of household expenditure, making food more expensive there for households as it eats up a larger chunk of consumers’ budgets, despite lower prices than the EU average. Across 36 countries measured by Eurostat, food and non-alcoholic beverages made up around 13 percent of total consumption expenditure by households. 

In this regard, Norwegians actually spend less money on food than other European households. Food and non-alcoholic beverages accounted for 11.3 percent of households’ total spending in 2022, according to Statistics Norway

Typically, someone aged 31-50 years will spend between 3,100 – 3,660 kroner per month on food, according to the Consumption Research Norway’s (SIFO) Reference Budget for Consumer Expenditures

So even while Norway spends more money on food, it’s less expensive overall as it takes up a lower portion of household expenditure. fra

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