The speech was held at the 1st working session at the informal Employment and Social affairs Council meeting, Villach 19-21 January 2006.

Dear colleagues, ladies and gentlemen.

I would like to thank the Presidency of the European Union for inviting me to take part in this discussion on flexibility and security in the labour market. It’s very nice to be here in Villach and to have this opportunity to share experiences on the European level.

“Flexicurity” has of course many different aspects. But we have two main challenges in the Norwegian labour market. They are firstly to create a more inclusive labour market and secondly to reduce the high number of people on sickness and disability benefits.

The Norwegian model of “flexicurity” is based on much the same elements as in our neighbouring countries. We are focussing on adaptability to change, an active labour market policy and a high degree of income security.

My government is a coalition government based on the Labour Party, - which I represent -, the Socialist Left Party and the Centre Party. One of the first decisions we took after coming into office last autumn, was to re-establish a better balance between flexibility and security in the labour regulations. For us, it was an urgent issue to restrict the use of overtime work and short- term contracts, which I feared could undermine an inclusive labour market.

I realise that companies need flexibility. Today, about 10 per cent of Norwegian workers are on short term contracts. Different contractual relationships are needed, - for instance to replace workers on leave for family reasons or for taking further education.

However, liberal rules on temporary work can contribute to a dual labour market. Permanent contracts should therefore remain the general rule.

Some of the best combinations of flexibility and security should of course be made at the work place. I therefore believe that the best results are achieved in co-operation with the social partners and through social dialogue.

A good example of this is the recent agreement between the government and the social partners to prolong the tri-partite work for a more inclusive working life. The aim is to reduce the number of people on sick-leave, to integrate more disabled people in employment and to achieve a higher actual retirement age. So far we have had good results in reducing sick leave. We will now intensify our efforts in the other areas.

The Norwegian welfare model rests on a high participation rate and strong incentives to work. A total reorganisation of the Norwegian labour market and welfare services will take place in the summer of 2006. The Public Employment Services, the National Insurance Services and the municipal social welfare service will be merged. Our hope - our vision - is that this new organisation will give us more people in employment and less on benefits. And that we will achieve a really well balanced form of flexicurity.

Thank you for your attention.