Norway's War Profit and Ukraine's Financial Plea
Following Russia's 2022 invasion of Ukraine, Norway's economy experienced an unprecedented boom, overtaking Russia as Europe's primary gas supplier. This shift has generated a colossal windfall, with the nation earning an estimated €109 billion extra from soaring gas prices. This financial gain has sparked a intense debate within Norway, with some critics labelling the country a 'war profiteer'.
The €140 Billion Loan Proposal
The European Commission has devised a bold plan to support Ukraine: an interest-free loan of €140 billion, financed by using frozen Russian assets. These assets, totaling around 210 billion euros ($243 billion) held in Europe, are largely stored in Belgium's Euroclear. However, a major obstacle exists. Belgium demands strict financial guarantees from EU nations to share the risk, a challenge for heavily indebted countries like France.
This is where Norway enters the picture. Economists Havard Halland and Knut Anton Mork argue that Norway, with its AAA credit rating and the world's largest sovereign wealth fund valued at $2.1 trillion, is uniquely positioned to single-handedly guarantee this loan. Guri Melby, leader of Norway's Liberal Party, supports this, stating, "Norway has the financial means to guarantee a loan that would enable Ukraine to better defend itself."
Political Pressure and Moral Obligation
The proposal is gaining political traction. Denmark's Prime Minister Mette Frederiksen endorsed the idea, while in Norway, parties like the Greens are pushing the government to act. Greens leader Arild Hermstad framed it as a "moral obligation," citing Norway's vast profits from the conflict. He emphasized that Norway is the only European nation that can allocate such sums without raising taxes or taking on debt.
Despite this pressure, the Norwegian government is proceeding with caution. While Norway has already committed over 275 billion kroner ($27.4 billion) in aid to Kyiv for 2023-2030, Finance Ministry state secretary Ellen Reitan confirmed they are "closely monitoring the situation" and maintaining dialogue with the EU, with no current plans for a solo safety net. The upcoming 2026 budget negotiations may prove decisive, as the government may need the Greens' support to pass its bill.
