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EU puts more pressure on Norway

The European Union is threatening a heap of trouble for Norway unless the country gets rid of several special provisions that allegedly violate European trade rules. Norway isn't a member of the EU, but it is part of EFTA and must adhere to many European regulations. The European regulators don't like lots of the local laws and provisions that are in line with Norwegian domestic politics but which they contend violate free trade. Under fire, for example, are the tax advantages offered to employers who set up shop in outlying districts. Norwegian politicians want to encourage settlement in rural Norway by providing employment incentives. But the EU believes the provision offers unfair advantages by differentiating between employers. EFTA regulators are asking Norway to "adjust" its rules to keep competition fair. It notes, for example, that not all employers have higher costs because they operate in the districts, and therefore they shouldn't get tax breaks. Another major area of conflict involves the Norwegian laws that regulate ownership of bank shares. EFTA's regulators contend the law violates European demands to ensure free flow of capital. But perhaps the biggest area of conflict between Norway and the EU is over agreements Norway has made to boost gas sales. The EU is threatening to sue Norway for billions of crowns on the grounds Norway's gas sales to the Continent have been illegal for years. Norway has sold its gas through a committee called GFU that European regulators charge amounts to an illegal cartel of the companies that produce the gas. Norway argues that the committee is a necessary means of managing the country's natural gas resources and that the companies are obligated to use it. Hearings on the gas sale conflict began in Brussels this week.