Norway workers agree on last-minute wage rise to avert strike

Protest would have affected 17,000 people
By Terje Solsvik
||Last Updated: 04/08/2013

OSLO (Reuters) — Norway's unions accepted a last-minute wage deal on Monday and called off a nationwide strike, sparing the country's vital offshore oil and gas industry from disruption, both sides involved in the negotiations said.

Unions accepted a 3.4-per-cent pay rise, below the central bank's projection for a four per cent increase, averting a strike that would have cut off supplies to key offshore oil and gas platforms, disrupted traffic at Oslo's international airport and shut key industries.

"This is a responsible and fair settlement, which takes into account jobs and businesses, and ensures that the purchasing power of the lowest paid gets an extra boost," Roar Flaathen, the head of the LO union said after talks ran more than three hours past the midnight deadline.

Strikes have become common in Norway over the past year as workers are demanding a greater share of the country's rare economic success. Offshore workers last summer shut down large parts of the oil sector in demand for higher wages, forcing the government to intervene.

NHO, the umbrella organization representing employers, said the moderation in wage growth after last year's four per cent rise was a welcome and necessary change of pace for the country.

Norway is the world's seventh largest oil exporter and second biggest piped gas supplier, and last year's strike pushed global oil prices up by around US$2 per barrel.

Norway's $500-billion economy grew by 3.5 per cent last year, even as the euro zone struggled with another recession.

But wages are already more than 60 per cent of the European average and stagnating competitiveness is a growing headache, even for the oil sector.

The central bank had expected wages to rise by four per cent or more in each of the next four years, despite stagnating productivity, as workers take advantage of a general shortage of labour and Norway's relative success.

Monday's strike would have initially affected 17,000 people and would have shut two key bases from which many of Statoil's biggest offshore platforms are supplied with everything from food to fuel and drilling fluid.

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