Having lived and worked in Norway for 15 years, I’ve witnessed firsthand the steady decline of the Norwegian Krone (NOK) against the Euro (EUR). It’s a trend that raises questions, especially for expats considering a move to Norway for work and those already living here managing their finances between Norway and the Eurozone. When I first arrived, the exchange rate was around 6.5 NOK to 1 EUR. Today, it hovers around 11.78 NOK per EUR, even briefly touching below 12 NOK this past summer. This significant weakening of the Krone begs the question: does a Norwegian salary still hold the same value when converted to Euros?
Back when the Krone was stronger, Norway was a magnet for foreign workers attracted by the promise of high salaries. But have Norwegian salaries kept pace with this dramatic currency devaluation? The simple answer is no. While the cost of living in Norway has undoubtedly increased, salaries haven’t doubled to compensate for the Krone’s weakness. This shift has significant implications for anyone considering moving to Norway primarily for financial reasons.
Chart showing Norwegian salary growth versus inflation, highlighting periods of negative real wage growth.
The Double-Edged Sword of a Weak Krone
A weak Norwegian Krone isn’t entirely negative. For Norwegian companies focused on exports, it creates a competitive edge. Norwegian goods become more affordable in international markets, boosting exports. Furthermore, individuals earning in Euros, US Dollars, or Swiss Francs and living in Norway currently find their income goes further in NOK terms. Tourists also benefit, as Norway, while still perceived as expensive, has become more budget-friendly for visitors than in previous years.
However, for foreigners living in Norway and earning in NOK, the downsides are more pronounced.
The Shrinking Value of Norwegian Salaries in Euros
Let’s consider a practical example. When I began working in Norway, my annual salary was approximately 400,000 NOK before taxes. At the exchange rates of 2009-2010, this equated to roughly 61,500 EUR per year, or about 3,000 EUR per month after taxes. This salary allowed for a comfortable lifestyle in Oslo: covering rent (around 10,000 NOK in the city center or 7,000 NOK outside for an apartment), travel, leisure activities, and even savings. Traveling back to France or other countries felt financially advantageous due to the Krone’s stronger value against the Euro and USD.
During that period, Norway attracted numerous workers from European countries, including Sweden and Poland. Even entry-level jobs provided sufficient income to live comfortably and send money home. To achieve the same Euro equivalent of that initial salary today, one would need to earn approximately 730,000 NOK annually. This isn’t due to salary increases, but simply to maintain the same Euro purchasing power due to the weakened Krone.
The crucial point is that salary growth in Norway has not kept pace with the Krone’s depreciation. While a 400,000 NOK salary in 2009 might have been attainable with limited experience and no Norwegian language skills, earning an equivalent Euro value today (730,000 NOK) typically requires significant experience and Norwegian proficiency.
Impact on Foreigners and Norway’s Attractiveness
The current exchange rate reality presents challenges for foreigners considering working in Norway. When viewed in Euro or USD terms, Norwegian salaries may appear less competitive than before, regardless of the sector, be it construction or technology. To remain internationally competitive and offset the rising cost of living, Norwegian salaries would need to be significantly higher.
Consequences of the weak Krone:
- Reduced spending power abroad: Foreigners in Norway have less Euro or USD to spend in their home countries, impacting loan repayments or travel budgets.
- Diminished remittances: Sending money home to family becomes less impactful when converted to other currencies.
- Decreased international competitiveness of Norwegian salaries: Norway risks becoming less attractive compared to countries with stronger currencies or lower living costs.
Of course, high earners in Norway, those making over 1 million NOK annually (approximately 85,000 EUR before tax), are less affected. However, such salaries are not typical for the average worker.
Furthermore, the increased cost of real estate in major Norwegian cities complicates the situation. Saving for a down payment on a home while paying rent becomes increasingly difficult, further impacting the long-term financial prospects for newcomers.
Research from the EXITNORWAY project at Oslomet indicates that economic reasons, specifically living standards and prices, are primary drivers for people leaving Norway.
Promotional image for a book about Norwegian culture, suggesting an alternative perspective beyond financial considerations.
Beyond the Money: Why Norway Still Attracts
Despite the economic considerations, foreigners continue to move to Norway. Factors beyond pure monetary value still draw people in. Norway offers undeniable attractions such as clean water, vast forests, and a healthy work-life balance.
Ultimately, the question remains: Is the weak Krone a major deterrent for those considering a move to Norway? Or are the other qualities of life in Norway outweighing the currency concerns? Perhaps my perspective is skewed by having experienced Norway’s economy when the Krone held a stronger position. What are your thoughts on the “Norway Money To Euro” situation and its impact on living and working in Norway?
