UPDATE 2-Norway should raise Ukraine aid, defence spending, says PM

Norway, home to the world's largest sovereign wealth fund with assets of $1.8 trillion, has seen soaring income from gas sales to Europe as a result of Russia's 2022 Ukraine invasion, and faces pressure at home and abroad to boost its aid. Parliament last year agreed to spend 35 billion crowns ($3.22 billion) on military and civilian support for Ukraine in 2025, increasing the total framework, dubbed the Nansen programme, to 155 billion crowns from 2023 to 2030.

Norway should boost financial aid to Ukraine significantly and also raise its own defence spending at a time of heightened global uncertainty, Prime Minister Jonas Gahr Stoere of the ruling Labour Party told parliament on Thursday. Norway, home to the world's largest sovereign wealth fund with assets of $1.8 trillion, has seen soaring income from gas sales to Europe as a result of Russia's 2022 Ukraine invasion, and faces pressure at home and abroad to boost its aid.

Parliament last year agreed to spend 35 billion crowns ($3.22 billion) on military and civilian support for Ukraine in 2025, increasing the total framework, dubbed the Nansen programme, to 155 billion crowns from 2023 to 2030. In recent days Norwegian politicians have been debating how much more Oslo should support Ukraine, given the drop in U.S. support for Kyiv and the fact that Norway's neighbours such as Sweden and Denmark have so far made bigger donations.

Stoere did not mention any numbers in his remarks, but added that a meeting of political parties later on Thursday should agree a significant rise in the Nansen programme this year to provide Ukraine with "the greatest possible fighting power". He added the government also plans to further boost Norway's own military.

It marks the latest example of a European country scrambling to boost defence spending and maintain support for Ukraine after President Donald Trump froze U.S. military aid to Kyiv and fuelled doubts about its commitment to European NATO allies. In 2023 alone, inflows to its wealth fund from oil and gas revenues swelled to 1.1 trillion crowns - or around $100 billion – nearly three times the previous record set in 2008.

Nansen is Norway's cross-party, bilateral aid programme for Ukraine, named after Nobel Peace Prize laureate Fridtjof Nansen. The government has a self-imposed rule to not spend more than 3% of the fund's value on its fiscal budgets. It plans to use 2.5% of the fund's value in its 2025 budget, not just on Ukraine but on other spending. Some politicians argue Oslo can and should spend more.

"We still have a lot of room for manoeuvre before the spending rule limit is reached and we may well have to go beyond it because the situation is so extraordinary," Ine Eriksen Soereide, head of the foreign affairs and defence committee in parliament, told Reuters.