Outgoing Central Bank Governor Øystein Olsen believes Jens Stoltenberg will expertly handle his new job. Olsen did not criticize his heir’s Labor Party membership.
“Stoltenberg is a very good fit for the job. He has a very special and unique experience. He is an excellent economist,” Olsen told NTB.
Recently, Olsen gave his last annual speech as central bank governor after 11 years in the role of chief executive. Eventually, the current NATO chief Jens Stoltenberg will take over the baton.
Stoltenberg has made it clear that he wants to keep his membership in the Labor Party – despite Norges Bank’s independent role.
“I have no thoughts about voting or party membership. It should be allowed, I think, in our type of society,” Olsen said.
Confident in Stoltenberg’s integrity
He added that most people in Norway know Stoltenberg from the time he was a politician and prime minister. Olsen himself has also worked under him as a bureaucrat in the Ministry of Finance.
“I am completely confident that with his professionalism, his integrity, and his insight, he will handle it in an excellent way – also in relation to the central bank’s role and independence,” Olsen said.
Tones down the action rule
In his last annual speech, the central bank governor talked down the action rule, an innovation that both he and Jens Stoltenberg were central to developing in 2001. At the time, Stoltenberg was prime minister, while Olsen was chief of staff in the Ministry of Finance’s Finance Department.
“The action rule can no longer be used as a strict guideline for budget policy from one year to the next,” Olsen said in his speech.
He emphasized that this is something he has said several times before about the rule that determines how much oil money the government should spend in the state budget.
“The politicians have understood this. And they’ve been practicing it for a while. It must be understood that I am gathering some threads in my last speech, reminding politicians how important it is not to follow this budget guideline year after year,” he said.
Theme in the first and last speech
The action rule limits the use of oil money from the state budget to 3% of the oil fund. In his first speech in 2012, Olsen spoke in favor of cutting the then level from 4 to 3%. Prime Minister Stoltenberg flatly rejected it. In 2017, however, Erna Solberg’s (H) government lowered the action rule by 1%.
Although Olsen downplays the usefulness of such a rule, he does not believe that it has gone completely wrong.
“This system has served us well for more than 20 years, in a period where the economy has also been exposed to severe disruptions. But there has been learning along the way. One lesson is that a strictly regulated economic policy is not expedient,” Olsen said.
Independence
In his concluding speech, Olsen also drew some historical lines, all the way back to when the first annual speech was held 100 years ago by Nicolai Rygg.
Since then, the central bank has also been in a 40-year period when the government-controlled monetary policy, before the bank became independent again, something Olsen also mentioned in his speech.
“The central bank must have independence,” he stated.
At the same time, it is now the government that appoints the successor, a former prime minister. Olsen does not think that is strange.
“No. We do not live in a vacuum. We do not live independently of a political system. But there should be an arm’s length distance in monetary policy,” he said.
Not an independent fund
But one point seems to have disappeared a bit in the debate about the appointment of a new central bank governor and the question of independence.
“When it comes to the central bank’s role, independence is paramount. But when we manage the Oil Fund, which is a very important task, we are not independent at all. There, we are an agent.”
He points out that it is the government that decides the mandate for the fund.
“All important decisions that affect how the fund is doing are actually taken by the government and anchored in the Storting,” Olsen stated.
Not alone
“In any case, Stoltenberg will not be responsible for the decisions as central bank governor alone,” his predecessor emphasized.
“As central bank governor, you are at the forefront and mediate decisions, but based on collective decisions in committees or the board, with very many competent people.”
Olsen has already communicated this to Stoltenberg – that is, how many good colleagues he will have.
“He has applied for a job where the tasks are very familiar to him. But then he is not so well acquainted with the organization because he has not worked within Norges Bank,” Olsen said.
Source : © NTB Scanpix / #Norway Today / #NorwayTodayFinance
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