Georgia’s president in Oslo

Mikhail Saakasjvili, embattled president of Georgia, paid a visit to Norway’s top officials on Wednesday, and firmly blamed Russia for an armed military conflict in August.

Norwegian Foreign Minister Jonas Gahr Støre (left) joined Prime Minister Jens Stoltenberg (center) in welcoming Georgian President Mikhail Saakasjvili to Oslo on Wednesday. PHOTO: ERIK JOHANSEN/SCANPIX

The tensions between Georgia and Russia no longer top the news scene like they did last summer, having given way to the drama surrounding the international financial crisis. But for the Georgians, the conflict remains very much at the top of their agenda.

Saakasjvili brought his message to Norwegian Prime Minister Jens Stoltenberg, who wasn’t willing to place blame himself.

“There is disagreement about what happened in August, and there have been serious accusations made from both sides,” Stoltenberg said. “Therefore we need an independent, international investigation.”

Stoltenberg said he was glad Saakasjvili was positive about such an investigation. “If it results in findings that there has been a serious violation, this will of course be a case for an international court,” he said.

Georgia launched a major attack on South Ossetia, which has tried to break out of the republic with assistance from Russia. Saakasjvili claims an international investigation will reveal that the war was “a clear case of aggression by a large country.”

Stoltenberg welcomed the Georgian leader to Oslo. Saakasjvili was also meeting King Harald at the palace.

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API/Source.aftenposteneng

Norway: Central bank cuts rates again

Norway’s central bank lowered its key lending rate on Wednesday, just two weeks after a similar cut. The goal is to ease a credit crunch, and stimulate lending activity that has all but dried up.

Svein Gjedrem, chief of Norges Bank, has had an even more challenging job than usual lately. PHOTO: SVEIN ERIK FURULUND

Norges Bank announced it was cutting another half-point off its key rate. That brings it down to 4.75 percent, and means that rates have dropped by a full point since earlier this month.

Nordic banking group Nordea responded immediately by cutting its lending rate to customers by a half-point as well. Norwegian banks, however, didn’t seem inclined to do the same. Even though the banks were quick to raise rates (not least on home loans) when the central bank imposed a long series of incremental hikes over the last two years, now they’re holding back.

“Many people think that as soon as Norges Bank lowers rates, so will the rates on their mortgages,” Aud-Helen Rasmussen of Norway’s largest bank, DnB NOR, told newspaper VG on Wednesday. “But it doesn’t work like that.”

Norway’s banks, like those all over the world, have been reluctant to lend to each other in the midst of the international financial crisis. That has sent rates up, while governments (including Norway’s) have scrambled to offer bank crisis packages aimed at boosting liquidity.

Rasmussen said it now “will take some time” before the central bank’s rate cut is reflected in mortgage rates. Other banks have said the same.

Norges Bank, meanwhile, lowered rates even though inflation in Norway is rising. A majority of analysts had predicted an interest rate cut. Interbank rates remain at levels above 6 percent.

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API/Source.aftenposteneng

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