OSLO (World News) - State workers in Norway, whose rapid economic growth stands out in a troubled continent, went on strike for the first time in 28 years on Thursday after pay talks broke down overnight, shutting schools, child care centers and other public institutions.
The indefinite strike initially affects 25,000-30,000 of the 600,000 people employed by central and local government but is expected to expand unless the two sides reach a settlement.
Union leaders say public sector pay growth has consistently lagged that in the private sector, and government workers are entitled to a bigger share of the benefits of Norway's strong economy.
"That the public sector should be the first in line on the way to moderation? That is very odd," said Arne Johannesen, one of the union negotiators. The union demands are "not outrageous", he said.
Details of the negotiations are confidential, but private sector pay talks are pointing to a rise of just below 4 percent this year, and public sector unions have been aiming for just over 4 percent on average, more for lower-paid workers.
The government expects wages to grow by 3.75 percent this year and by 4.0 percent in 2013, in line with forecasts by the central bank.
Oil-rich Norway's economy is a star performer in a continent wrestling with a debt crisis and facing the threat of a new recession. Disciplined public finances and its own currency have helped it use high oil prices to fuel growth, while keeping unemployment and inflation low and consumption growing fast.
Its economy grew by 1.4 percent in the first quarter, faster than already optimistic forecasts, and its strong fundamentals have kept it isolated from the region's economic troubles.
Some economists worry the economy could overheat, and a persistent property market boom poses a risk to financial stability as consumers become increasingly indebted.
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