Today, the Norwegian government announced an economic stimulus package totaling NOK 20 billion (approximately $2.89 billion), intended to stimulate job creation and alleviate the impact of the global financial crisis. Of the NOK 20 billion, NOK 16.75 billion will be allocated for new government spending, while the remaining NOK 3.25 billion will be utilized to provide tax relief to the business sector.

The increased government spending will include increasing municipal budgets and investing in infrastructure, expanded communications networks and new construction. Additional government spending has been allocated to environmental initiatives, including reducing greenhouse gas emissions, transferring to renewable energy, and preserving national monuments. Finally, in an effort to stem the adverse impact of rising unemployment, the government is allocating additional money to the Norwegian Labour and Welfare Administration, and increasing borrowing limits and tax reductions for companies.

Under the stimulus package, the Norwegian government has also introduced cyclical tax relief for 2008 and 2009 for companies, allowing them to temporarily re-allocate up to NOK 5 million losses, in an effort to lower taxes and enhance liquidity for these companies.

Norwegian Prime Minister Jens Stoltenberg stated that the government’s actions are “the strongest Norwegian measures [taken] against unemployment for more than 30 years, and among the most far-reaching measures taken internationally.” Additionally, on February 9, the Norwegian government intends to announce new measures aimed at increasing the lending capacity of domestic banks.