opinions
Arne O. Holm comment:
Northern Norway: Should More Than Half The Population be Governed by The State?
Comment: Several municipalities in the Norwegian Arctic are crying out for financial emergency aid from the state. They might get their wish sooner than expected, but not necessarily in the way they had imagined. Northern Norway’s largest city is just one of many that could be placed under state control.
Published
Modified
This is a comment written by a member of the editorial staff. All views expressed are the writer's own.
One would think it possible to manage finances responsibly in a city of more than 80,000 inhabitants, but Tromsø in Northern Norway wants it differently. Sky-high debt, far above the national average, makes the municipality one of the Norway’s relatively largest contributors to gigantic profits in Norwegian financial institutions.
The banks’ shareholders
Instead of the money going to the municipality’s residents, for example schools and culture, it fills the already well-lined pockets of the banks’ shareholders.
That is the main reason why the region’s largest city has qualified for the so-called ROBEK list, a state parking lot for municipalities unable to govern themselves. The consequence is that the state takes control of the municipality’s financial decisions.
Tromsø is not there yet. But according to a report from the County Governor of Troms and Finnmark, it is only a matter of time. They have already qualified, as it is called, for the ROBEK list.
But Tromsø is far from alone in this inverted economic championship. When I add up the numbers for municipalities in Troms and Finnmark that are either already ROBEK municipalities, have qualified for the list, or are in the process of qualifying, it shows an alarming development.
Tromsø wants it differently
State control
During 2027, more than half of the population of Troms and Finnmark could be directly subject to state control. Residents spread across 11 municipalities.
Those who believe that state control will strengthen the municipality’s ability to serve its customers, us residents, do not know the state very well. Tax increases and cuts to municipal services are the medicine the state prescribes to put a mismanaged municipal economy back on track.
I study these bleak figures, which are largely due to debt-financed investments, while thinking back to a visit to a small Finnish municipality towards the end of last year.
In Sodankylä, in northern Finland, I met a mayor quite different from what I usually encounter on the Norwegian side. A municipality with a vast geographical area, but a modest population of 8,100. Quite typical also of several municipalities in northern Norway.
Another similarity was low unemployment. On the Norwegian side as well, a shortage of labour is a greater challenge than the opposite.
They are doing well
Mayor Jari Rantapelkonen had an ambition on behalf of his residents: to take care of them, including by supporting the business community already in place.
- And things are going well now, he said.
At the same time, he said no to, or was sceptical of, costly, debt-financed investments triggered by increased tourism or more mining.
And, for the record, as I wrote in my commentary at the time, this was no romantic who had fled deep into the Finnish forests.
Returning to the municipal financial challenges on the Norwegian side, we are facing a huge paradox.
A paradox
If more than half of the inhabitants of Troms and Finnmark end up on the state's “bankruptcy list”, they will be placed under the guardianship of a state where an ever larger share of the budget will go towards rearming the Armed Forces. That means a smaller share for civil society, including the municipalities.
Tax increases and cuts to services are the state's remedy
This is happening at the same time as the municipalities in the north are crucial pieces in Norway's total defence.
A Gordian knot that will require both skill and effort from our politicians to solve.
In that duck pond, however, a couple of kroner in diesel taxes still apparently remain the most important and all-overshadowing challenge we are facing.
