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Yearbook 1998

1998 NorwayNorway. The surplus of oil on the world market led to record low oil prices during the year, which hit the Norwegian economy hard. An estimated plus in the current account balance of SEK 94 billion. for 1998 was about to be wiped out. According to Countryaah, the Norwegian krone fell sharply in value and the Riksbank raised the interest rate seven times before the attempts to defend the krone exchange rate were abandoned. The Oslo Stock Exchange fell more than other leading exchanges in the world. At the same time, the low unemployment rate of 3.3% created wage increases of 6%, almost twice as high as that of the country's trading partners.

1998 Norway

The currency crisis during the summer put the minority government under severe pressure and at the end of August, Prime Minister Kjell Magne Bondevik was laid off for a depressed response due to overwork. Despite speculation that he would be forced to resign, Bondevik returned to the budget debate in the Storting just a few weeks ago. His absence had then seemed to be welding on the government parties, which under the pressure of declining opinion figures previously marked against each other in their respective heart issues.

The center government with the Christian People's Party, the Center Party and the Venstre proposed strong austerity measures in the autumn budget. But a new budget deal with H°yre and the Progress Party appeared to be impossible, as the government's proposal included tax and fee increases of SEK 4 billion. The Labor Party, for its part, refused to attend the government because of the proposal for custody grants, which in the new budget were extended from one-year olds to two-year-olds. Negotiations in the parliament broke down. The Labor Party was weathered by power and at the party congress at the end of November, party leader Thorbj°rn Jagland presented a program adapted for budget compromise with H°yre. Norway looked to be heading for a historic crisis settlement between the two traditional political opponents.

But Jagland's play caused the government to back down. Most of the tax and fee increases were abolished and a number of cuts were made to meet the H°yre and the Progress Party. The government crisis was averted and the two right-wing parties voted in the parliament for the center's budget proposals. The government's internal difficulties became apparent again in November, when several of the Center Party's government ministers opposed the veterinary agreement that the government itself negotiated with the EU. The plans for Norwegian accession to the EU's border cooperation, the Schengen Agreement, were also criticized by leading center teams.

Norway expelled two Russian diplomats at the beginning of the year and declared three others undesirable. The Russians were accused of trying to recruit Norwegians to Russian intelligence service. Russia responded by expelling two Norwegian diplomats.

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