Norway is considering tapping its sovereign wealth fund to dramatically increase its support for Ukraine amid signs that US military backing is waning. Europe is in crisis mode after a bitter clash between Trump and Zelenskyy at the White House, and the Trump administration is reportedly considering cutting off all military supplies to Ukraine. Norway is sitting on €1.7 trillion in the world’s largest sovereign wealth fund, including an estimated €109 billion in war-related profits from increased gas prices in 2022 and 2023. The Nordic country has so far spent €3.35 billion on support to Ukraine - an amount described on Thursday as “pathetic” and “reprehensible” by the editors of major Swedish and Danish newspapers, whose countries, according to the same data, have contributed €5.41 billion and €8.05 billion respectively. “Norway is one of the few countries that has large amounts of money readily available, and we must therefore multiply our support for Ukraine immediately,” Liberal Party leader Guri Melby said on Saturday.
It sounds to me like 4% is what they’ve guesstimated as being the maximum safe amount that can still fulfill that sustainable spending goal. I might call that “arguable,” but I wouldn’t call it “arbitrary.”
It’s arbitrary. The reasoning is based around avoiding inflationary effects, but that’s based on a stupidly simplistic and wrong-headed idea of how inflation works.