Background information

Due to the COVID-19 pandemic, the Norwegian authorities has imposed a series of national and local restrictions, which has significantly impeding economic activity. The impact of the crisis has been different for different local communities and sectors across Norway. The Norwegian authorities therefore proposed a municipal compensation scheme in order to improve the liquidity of undertakings in municipalities hit by the COVID-19 pandemic. The measure shall, in particular, remedy the situation of local undertakings that are affected by local or national infection control measures or the economic recession following from the pandemic.

The outbreak of the COVID-19 pandemic, combined with subsequent stringent restrictive measures, has resulted in increased costs, loss of customers and large revenue losses, which in turn has led to an extraordinary liquidity situation for undertakings in many sectors. The crisis has dramatic consequences for many sectors, but the impact varies between municipalities and sectors.

Content of measure

The municipal compensation scheme aims at ensuring access to liquidity, by means of direct grants, for undertakings facing a sudden shortage or unavailability of liquidity due to the impact on the economy of the COVID-19 pandemic. The measure shall remedy the situation of local undertakings that are particularly affected by local or national infection control measures or the economic recession following from the COVID-19 pandemic.

The measure is funded through a budget allocation from the Government to the municipalities, which enables them to aid local undertakings. The municipalities may choose different ways, under the compensation scheme, to aid undertakings. These funds will remedy the situation for undertakings according to local needs not covered by national schemes. These needs vary from municipality to municipality.

The Ministry of Local Government and Modernisation is the authority responsible for the measure and for defining the framework within which the municipalities may adapt and prioritise local schemes. Aid under the measure may be granted to undertakings, or an entity within an undertaking, with their registered address within the municipality border, or to regional tourist boards and destination management organisations. Undertakings of all sizes can be eligible.

The municipal compensation scheme has by June 2021 been allocated NOK 2,500 million (€245 million).

Use of measure

No information.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Local / regional government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

Social partners involvement is unknown. Social partners may have had informal dialogue with government or/and members of parliament.

Views and reactions

The social partners are supportive of the measure.

Sources

• 25 June 2021: Steps up crisis management for the business community (www.regjeringen.no)
• 30 June 2021: Municipal compensation scheme for local businesses (www.regjeringen.no)