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UPDATE 1-Norway minority govt, opposition party agree more COVID-19 spending

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OSLO, Nov 16 (Reuters) - Norway’s minority government and the opposition Progress Party have agreed on another package of extraordinary measures to help the economy weather the coronavirus pandemic, the parties said on Monday.

The overall package amounted to 22.1 billion Norwegian crowns ($2.43 billion), an increase from the 17.7 billion crowns proposed by the centre-right cabinet of Prime Minister Erna Solberg on Nov. 10.

However, the package did not include significant help for Norwegian Air, which had been seeking extra state aid to ease its debt burden of more than $5 billion at a time of unprecedented pain for the global aviation industry.

The coalition said earlier this month that the carrier’s high debts and its “confusing” ownership structure were obstacles to any additional state help.

The extra 4.4 billion crowns in the package of measures agreed on Monday will further deepen Norway’s structural non-oil deficit for 2021, which before Monday’s deal had been expected to reach 331.1 billion crowns.

“We want to give as much certainty we can in an uncertain time,” the Conservatives’ finance spokesman in parliament, Mudassar Kapur, said in a statement.

As part of the package, an air passenger tax introduced in 2016 as an environmental measure will remain suspended for the whole of next year. The government had suspended the tax for all 2020 because of the coronavirus pandemic.

Solberg’s three-party, minority coalition needs the support of the right-wing Progress Party to push legislation through parliament.

The parties will now continue negotiations on the government’s proposed fiscal budget for 2021, which could affect again the level of the structural non-oil deficit.

$1 = 9.0822 Norwegian crowns Reporting by Terje Solsvik and Gwladys Fouche Editing by Gareth Jones

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