Norway is considering tapping its sovereign wealth fund to dramatically increase its support for Ukraine amid signs that US military backing is waning. Europe is in crisis mode after a bitter clash between Trump and Zelenskyy at the White House, and the Trump administration is reportedly considering cutting off all military supplies to Ukraine. Norway is sitting on €1.7 trillion in the world’s largest sovereign wealth fund, including an estimated €109 billion in war-related profits from increased gas prices in 2022 and 2023. The Nordic country has so far spent €3.35 billion on support to Ukraine - an amount described on Thursday as “pathetic” and “reprehensible” by the editors of major Swedish and Danish newspapers, whose countries, according to the same data, have contributed €5.41 billion and €8.05 billion respectively. “Norway is one of the few countries that has large amounts of money readily available, and we must therefore multiply our support for Ukraine immediately,” Liberal Party leader Guri Melby said on Saturday.
can they legaly extract money from that fund?
You wouldn’t have to extract anything if you use the funds as collateral for a loan. Not that I understand anything about how they run their country and this financial institution.
Kind of. The amount that can be spent annually is regulated by law. I don’t remember the exact figure, but the budget can not rely on more that N% of these funds. I don’t remember how much N is, but it’s reasonably low. The reason is twofold:
It is entirely possible to change this number of percent by a majority at the parlament.
Source: Am noggie
EDIT: The percentage that can be used follows the profit, which is estimated at 3-4%
Are you really asking if they legally can spend their own money?
Of course they can, there’s an agreed upon principle to only spend 3-4% of it per year, but if they want to, obviously they can change that.
Yes, the rule is up to 4% of annual proceeds can go into the national budget for covering spending. That rule, however, is arbitrary nonsense and only serves to limit the size and scale of investments on the budget.
The actual limiting factor is that the law states that the purpose of the fund is to save for the benefit of future generations. That’s something they will have to navigate. Personally I would like for there to be a mechanism that basically requires a ‘business case’ outlining how any proposed investment/spending will align with that stated aim of the fund. Making such a case here should be pretty straightforward, as allowing one of our neighbouring countries to militarily invade and conquer their neighbours wouldn’t be good for said ‘future generations’.
It sounds to me like 4% is what they’ve guesstimated as being the maximum safe amount that can still fulfill that sustainable spending goal. I might call that “arguable,” but I wouldn’t call it “arbitrary.”
It’s arbitrary. The reasoning is based around avoiding inflationary effects, but that’s based on a stupidly simplistic and wrong-headed idea of how inflation works.