March 15, 2020 / 12:59 PM / 17 days ago

Norway offers firms $10 billion as coronavirus shakes economy

OSLO (Reuters) - Norway will offer companies at least 100 billion Norwegian crowns ($9.7 billion) in funding in the form of guarantees for loans and bond issues to support the economy during the coronavirus outbreak, the government said on Sunday.

FILE PHOTO: Norway's Prime Minister Erna Solberg speaks during a joint news conference with German Chancellor Angela Merkel at the chancellery in Berlin, Germany, October 15, 2019. REUTERS/Michele Tantussi/File Photo

“The government will do what’s needed and spend the necessary funds to secure the Norwegian economy and support Norwegian businesses, big and small,” Prime Minister Erna Solberg told a news conference.

The Nordic country invoked emergency powers on Thursday to close a wide range of public and private institutions, including schools and restaurants, in a bid to combat the spread of coronavirus.

The business support package was divided into loan guarantees of 50 billion crowns to small and medium sized companies seeking bank loans, and the same amount in the form of government guarantees to large firms issuing corporate bonds.

In addition, payments of payroll taxes will be postponed, the government added.

Further measures for industries that have been particularly hard hit will also be presented at a later time, Finance Minister Jan Tore Sanner said.

Norway’s King Harald said in a televised speech on Sunday that the circumstances were “unreal, strange, and scary for everyone.”

“We don’t feel at home in our daily lives, or the world around us. And still we are only at the start of something that we don’t fully know the consequences of,” the 83-year-old monarch said.

The government on Friday announced it would pay a greater part of the bill for companies seeking to make temporary layoffs, while the central bank slashed interest rates and lined up emergency funds for banks.

Budget airline Norwegian Air (NWC.OL) has asked the government for further measures with immediate liquidity effects such as loans or credit facilities.

The government is introducing temporary entry and exit controls from Monday in a bid to curb spread of coronavirus, which had as of Sunday led to three deaths nationwide.

The total number of infected people has risen to 1,077, according to the official count by the Norwegian Institute of Public Health, updated on Sunday.

Editing by Jan Harvey and Alexander Smith

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