- Calls increase so that Norway operates its sovereign fund in order to stimulate the financing of Ukraine.
- Calls are involved in bitter relations between the United States and Ukraine, which increases the pressure on Europe to intensify.
- Norway spent less in Ukraine Aid than its neighbors. His SWF is worth 1.8 Billion of dollars.
Norway is faced with increasing pressure to exploit its huge sovereign fund to stimulate Ukraine aid as concerns increased on the United States continuous support to Ukraine war efforts.
Norway, founding member of NATO, has a sovereign wealth fund of $ 1.8 billion, the most important in the world, fueled by oil and gas income, as well as investments in stocks, bonds, real estate and renewable energies.
The country caps its annual use at 3% to finance the state and the budget of Norway. However, in the midst of growing tensions between Washington and kyiv, Norwegian politicians and economists push to exploit the fund to increase the support of Ukraine.
“Norway is one of the few countries to have great money easily accessible, and we must therefore double our support for Ukraine immediately,” Guri Melby, leader of the Norwegian Liberal Party said on Saturday.
ARILD Hermstad, the country’s green party leader, said “Norway has a record oil fund that we must now use actively to ensure peace and democracy in Europe and Ukraine”.
Norway is late from its Nordic neighbors
Norway spent less in the aid of Ukraine than its Scandinavian neighbors, allocating only 0.75% of its GDP, against 0.91% of Sweden, Finland by 0.98% and the Denmark support tracker, according to the Kiel Institute for World Economy Ukraine Support Tracker.
Norwegian Prime Minister Jonas Gahr Støre declared Thursday in an X post that Parliament had agreed to double the country’s financial commitment to Ukraine this year, at around 8.1 billion dollars.
The Prime Minister’s office did not respond to a comment request to Business Insider.
But with regard to the Fund for Sovereign Wealth, the Norway Minister of Finance, Jens Stoltenberg, a former NATO secretary general, warned last month that the ceiling rupture of 3% would be risky and should only be used in the event of a crisis.
Meanwhile, in an editorial published last weekend, 47 Norwegian economists, analysts and teachers urged the country to use the fund to help Ukraine.
“The attack on Russia, if it is not arrested, constitutes an existential threat to freedom and democracy, not only in Ukraine but in all of Europe, including Norway,” they wrote.
Break the ceiling by 3%
Knut Anton Mork, professor emeritus of economics at the Norwegian University of Science and Technology, told BI that it would not be the first time that Norway had broken the ceiling by 3%.
He exceeded it by 1.2 percentage points in 2020, during the COVVI-19 pandemic, and 0.1 percentage point during the 2008 financial crisis, while it was already set at 4%.
Even so, Mork said that “ignoring the 3% rule would be somewhat unusual, and even more the gift”.
He predicted that the government would probably remain “in the 3%rule, or perhaps slightly above”.
Einar Lie, professor of economic history at the University of Oslo, who, with Mork, signed OP-ED, said that the ceiling break of 3% to help a foreign country had never been considered before, but he argued that help from Ukraine to “survive and dissuade additional assault is vital” for long-term security.
“It is certainly more likely to occur within the framework of a large concerted action among European countries and, hopefully, the United States,” he added.
European concern about American support
Calls to Norway to intensify its expenses for Ukraine are involved in uncertainty about Washington’s commitment to the war torn by the war.
Last Friday, during the visit of the Ukrainian president Volodymyr Zelenskyy at the White House, President Donald Trump accused Zelenskyy of “disrespecting” the United States.
A few days later, Trump said that he stopped all military aid in Ukraine. A military expert told BI that if help in the United States does not restart, Ukrainians may perhaps hold two to four months.
The situation has raised concerns about how Europe could intervene to help Ukraine’s defense more.
During emergency talks in London on Saturday, the president of the European Commission, Ursula von der Leyen, said that a “massive increase” of defense spending among the European allies was in preparation.
And on Tuesday, the European Union unveiled a plan to stimulate the defense expenses of the Member States in the middle of what Von Der Leyen called a “rearmament era”.
The Rearm Europe plan could unlock around $ 840 billion in funds.
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