Norway PM sees billions in extra costs to cope with asylum seekers

by Reuters
Tuesday, 13 October 2015 09:32 GMT

* Sees NOK 40-50 bln in extra costs over next 5 years

* To present amendment to 2016 budget due extra costs (Recasts with quotes by PM to parliament)

OSLO, Oct 13 (Reuters) - Norway may have to spend an extra 40 to 50 billion crowns ($4.9 billion-$6.2 billion) over the next five years to cope with a rising number of people seeking asylum, Prime Minister Erna Solberg told parliament on Tuesday.

Norway has seen a rising number of people seeking asylum in recent months, albeit fewer than neighbours Sweden or Finland. Some 20,000-25,000 people are expected to arrive in 2015, rising to over 30,000 next year. Norway has 5.2 million inhabitants.

"If 40,000 to 50,000 asylum seekers were to receive residency, the costs the next five years would lie between 40 and 50 billion crowns," Solberg said. "With many minors coming alone, those numbers could be even higher."

Without measures to cut expenses, she said, the extra costs of accommodating refugees would number several billions of crowns in 2016.

The government would "shortly" present an amendment to the 2016 budget it presented last week, based on those new forecasts, she said.

Earlier on Tuesday, Solberg was reported as saying that Norway may have to tap its $856 billion sovereign wealth fund more than planned next year to cope with a rising number of people seeking asylum.

Her right-wing government said last week it would make the first net withdrawal from the fund to finance tax cuts and boost a slowing economy hit by weak oil prices.

Its 2016 budget planned to spend 2.8 percent of the fund's value in 2016, up from 2.6 percent this year, equivalent to an extra 23 billion crowns.

"We must use more money because we can't stop everything that is happening in Norway just to pay for the flow of refugees," Solberg was quoted as saying in the business newspaper Dagens Naeringsliv on Tuesday.

Asked whether this will mean an even greater use of money from the oil fund, she said: "Yes, I don't think we can manage this just by reallocating."

When speaking in Parliament, Solberg did not say how the extra 40-50 billion crowns she saw in extra costs could be funded. ($1 = 8.0978 Norwegian crowns) (Reporting by Gwladys Fouche; Editing by Tom Heneghan)

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