New king of Europe's richest oil country. But the Norwegian monarch has no access to the oil billions
Norway found itself at the beginning of a new chapter in their history after the death of King Harald V. The seventy-eight-year-old heir to the throne became the new Norwegian king following his father's death and took the name Haakon VIII. This closes the more than 35-year-long era of Harald V, who was consistently very popular among Norwegians.
With the arrival of the new king, however, a question that has been surrounding the Norwegian monarchy for many years arises again. How is the royal family doing financially? And when Norway earned fabulous money from oil, did any of this wealth also reach the king? The answer will surprise you, because practically none at all.
King of an Oil Power Without an Oil Fund
We give Norway as an example of a country that managed to use its oil wealth wisely. In the second half of the 20th century, large oil deposits were discovered in the North Sea, and the country didn't spend all the earned money immediately. Instead, it began to set aside part of the income into a state fund, which was meant to ensure that future generations could also benefit from Norway's natural wealth. This is how the Government Pension Fund Global was created, which most of us know simply as the Norwegian oil fund.
Today we are talking about one of the largest sovereign wealth funds in the world. The assets it manages exceed up to two trillion dollars and it owns stakes in thousands of companies around the world. According to estimates, the value of the fund would correspond to approximately several hundred thousand dollars per Norwegian citizen.
Many people therefore imagine that the Norwegian king sits on a huge treasure. In reality, however, the fund does not belong to the monarchy. It is the property of the Norwegian state and its operation is controlled by the government, parliament and central bank. The purpose of the fund is to protect the economy from fluctuations in oil prices.
The new King Haakon VIII. thus does not decide where hundreds of billions of dollars are invested or how the returns will be used.
A more modest monarchy than many might expect
The Norwegian royal family differs from other oil monarchies, such as those in the Middle East. In a number of countries in the Persian Gulf, ruling dynasties are directly connected to revenues from oil extraction and have extensive private assets, whereas in Norway the role of the king is representative. Real political power remains in the hands of democracy.
Although the royal family uses royal residences and draws funds from the state budget, its position is more modest than is customary elsewhere. Moderation and emphasis on closeness to ordinary citizens were among the reasons why Harald V maintained high popularity during his reign.
Norway is, after all, a country that prides itself on an egalitarian society. Ostentatious displays of wealth are not received positively here. Therefore, the monarchy has long tried to act more as a symbol of national unity rather than as a privileged elite.
Harald V. Helped the Monarchy Survive
The late Harald V. went down in history for helping to modernize the image of the Norwegian monarchy. In 1968, after a long struggle with conservative circles, he secured marriage to Sonja Haraldsen, a woman of non-noble origin. At the time, this was a significant breakthrough in the traditional rules of European royal families.
Similarly, the relationship of Crown Prince Haakon with Mette-Marit, who was a single mother before the wedding, also sparked discussions later. The Norwegian monarchy has maintained public support even in the 21st century mainly thanks to a more open approach to modern society.
Harald was perceived by people as a monarch who understood the changes in society and was able to unite people regardless of origin, religion or lifestyle. His speeches after the terrorist attacks of 2011 remain to this day among the most quoted moments of modern Norwegian history.
Haakon VIII Enters a Different Era
Now the new king assumes the throne at a time when European monarchies must defend themselves before the public. Support for the Norwegian monarchy remains quite high, but in recent years it has been weakened by controversies connected with the wider royal family.
Haakon VIII faces the task of building on his father's legacy while convincing the younger generation of Norwegians that the monarchy has its place even in a modern state. An advantage for him is that he will not be associated with questions of power or great wealth. He has no say in how the country manages its oil wealth.
And perhaps this is one of the secrets of Norwegian success. Oil revenues belong to the state and citizens, while the monarchy remains primarily a symbol of the nation and tradition. The new King Haakon VIII thus ascends to the throne of one of the richest countries on the planet, without having access to the treasury that many associate with the Norwegian crown.
Sources: author's text, norskpetroleum.cz, chathamhouse.org, nbiam.no, Reuters.com
