Both the UK and Norway found oil in the North Sea. The UK decided to spend the proceeds and tax the extractors and spend that as well on mainly current spending. Norway decided to put that into a fund and only use the profits. So now the Norwegian fund has grown to Eur 430 billion. While the UK has a trillion pound debt. Just saying.
Read this interview from the Norwegian Ambassador to the EU. I quote
A stereotype about Norway is that it is sitting on a lot of money proceeding from its oil and gas sales. What do you do in your country with this money?
You are thinking of what we in popular refer to as the oil fund, formally named the Pension Fund Global. The notion is very simple and we are not the only ones who have done it. The fund now has the size of around €430 billion and still growing.
We are not in position to inject all this money into our economy, it would completely destroy it. Instead we only spend about 4% of the surplus, which is estimated to be the long-term profit of the fund. The rest is set aside in order to pay - not only my pension when I retire - but for the generations to come. It’s a transfer of natural wealth in the ground into money that will balance our wealth over many generations to come. It’s a challenging exercise, but it has a broad political consensus and I think that’s the strength of the entire construction.
Is it possible to use these huge amounts to help boost the EU funds designed to prevent new crises from happening – the EFSF [the European Financial Stability Facility] or its successor ESM [the European Stability Mechanism], or the IMF?
The key point with the Pension Fund is that it’s strictly a financial vehicle, not a strategic vehicle for Norwegian interest in different parts of the world. If we were to make investments of more strategic reasons, we would easily end up in situations of second guesses; why didn’t we do this or that ...
The fund and its management is probably the most open fund in the world, and this is to demonstrate that the fund is managed strictly for financial purposes linked to the basic role of the fund, namely to take care of the values of many generations. The issue whether the fund should be used to invest to solve [the] immediate crisis in Europe or elsewhere is simply a non issue. In cases where we would like to contribute and where we have contributed, it would be a political decision and by using public money available.
Let me make a reference to the most recent example: as you may recall on 9 December the European Council agreed to strengthen IMF resources by €200 billion and they encouraged non-EU countries to do a similar contribution. Ten days later Norway announced that we were providing a €7-billion additional loan to the IMF as a direct response to the encouragement by European leaders and the European Council. This money was taken from regular sources, in this case guarantees from our national bank.
So the key point is that the Pension Fund Global is a 100% financial instrument for the purposes I alluded to. Our contributions to the IMF and the close to €2 billion that we contribute to reduce economic and social disparities in the new members of the European Union through the Norway Grants are political decisions taken and financed by regular sources.
Now who looks after our children and invests their money and who fitters all their money? The UK will say that it invested in its people now, but looking at the productivity, the performance of UK students in PISA tests, etc. etc. doesnt show much return there, does it?
The story of the Ant and Grasshopper comes to mind.