OSLO, Jan 22 (Reuters) - Norway’s government will meet business leaders on Thursday to discuss its plans for state aid to revive the slowing economy, as pressure grows on the authorities to help recapitalise the country’s banks.
Prime Minister Jens Stoltenberg’s centre-left government is due to present its initial fiscal stimulus package on Monday, expected to focus more on industry than the financial sector.
But the government, facing a general election in September, has also promised further aid packages if the global financial and economic crisis continue to weigh on Norway’s economy. “What we’re now working on are additional measures (beyond Monday’s stimulus package),” Stoltenberg told NRK public television ahead of his meeting with business lobby groups, including banking associations.
“We’ve said long ago that this will be a deep and long lasting crisis ... (and) it’s important to have good dialogue.”
Stoltenberg’s comments come as the head of Norway’s main financial sector lobby group said banks needed fresh capital from the state and that any aid package from the government would probably include such injections.
“Banks need more equity,” Arne Skauge, director of the Finansnaeringens Hovedorganisasjon lobby, told daily Finansavisen.
The call for more capital in Norway follows a sharp fall in the share price of the country's biggest bank DnB NOR DNBNOR.OL, an $18 billion bank aid package in nearby Denmark this week and government bailouts of struggling banks around the world.
DnB NOR’s shares rebound 20 percent late on Wednesday only after the lender said it did not intend to issue new shares.
But DnB NOR’s Chief Financial Officer Bjoern Erik Naess told daily Aftenposten that the bank was unable to lend to all customers in a normal fashion.
“We have to make priorities, focus on the retail markets and on the small and medium sized companies in Norway,” he said.
“All expansion must be put on hold. Neither DnB NOR nor Norwegian banks in general have the capacity today to cover the capital needs of the big companies that need financing in 2009 and 2010,” he said.
Separately, Terje Vareberg who runs Sparebank 1 SR-Bank ROGG.OL, one of Norway's largest savings banks, told Aftenposten that he was open for more state ownership in exchange for an aid package from the government. (Reporting by Wojciech Moskwa, Aasa Christine Stoltz and Terje Solsvik; Editing by Erica Billingham)
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