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Norway

Norway’s new center-right minority government is official

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Having narrowed coalition talks from four to two parties last week, it didn’t take long for Norway’s new government to emerge formally on Monday.norway

As I wrote late last week, Norway is set to have a minority government that will likely be its most right-wing government in postwar history:

As widely anticipated, the leader of the center-right Høyre (literally the ‘Right,’ or more commonly, the Conservative Party), Erna Solberg, will become Norway’s next prime minister, but she’ll lead a minority government in coalition with just one of Norway’s three other political parties, the controversial anti-immigrant Framskrittspartiet (Progress Party) after two smaller center-right parties pulled out of coalition talks earlier this week.

I wrote before the election that pulling together all four parties on the Norwegian right might prove problematic.  Sure enough, both the Kristelig Folkeparti (Christian Democratic Party) and Venstre (literally, ‘the Left,’ but commonly known as the Liberal Party), which will hold 10 and nine seats, respectively, in the next parliament, will not join the government.  Though both parties have agreed to provide support to Solberg from outside the government, it’s not an auspicious start for the broad four-party coalition that Solberg hoped to build after last month’s victory.

It was no surprise on Monday to see Erna Solberg, the leader of the Conservatives and Norway’s likely next prime minister (pictured above, right) and Siv Jensen, the leader of the Progress Party (pictured above, left) announce their governing agenda.

That agenda came with few surprises from the general framework largely set forth last week — a push to tightening Norway’s immigration laws (for non-Europeans), lowering Norway’s tax burden and, importantly, an agreement not to deviate from the ‘4% rule’ that prohibits more than 4% of the country’s massive $790 billion oil fund to be used in the annual Norwegian budget, and a commitment to avoid exploration for resources in protected Arctic areas.

Both parties generally hope to unlock economic growth and modernization through tax cuts and decentralization of power from Norway’s central government.

But perhaps the most ambitious item is a plan to develop a new infrastructure fund of up to 100 billion kroner ($16.75 billion) for what Solberg and Jensen hope will a five-year mission to improve Norway’s roads and railroads — as well as its educational system:

Kristin Skogen Lund, director-general of the Confederation of Norwegian Enterprise, welcomed the “shift in direction for Norwegian politics”….

Ms Skogen Lund also welcomed the shift in focus of the oil fund from consumption to investment. The outgoing government had spent only about 14 per cent of annual proceeds from the fund, she said, when all of it was supposed to be directed into infrastructure, education and tax reduction.

That’s important in light of Solberg’s goal to reduce the value of the krone, Norway’s currency — inflation, along with high labor costs that have made Norway’s exports relatively uncompetitive, are the largest challenges to an economy that’s at risk of overheating (to the contrary of much of the rest of Europe).  Though the ‘investment’ will surely stimulate Norway’s economy, it will do so for long-term benefits.  That makes the Solberg ‘investment fund’ plan unlike, say, the 2009 US stimulus package enacted into law by US president Barack Obama designed to do the opposite — boost short-term aggregate demand.

Solberg’s government will also explore the possibility of splitting the country’s oil fund, the world’s largest sovereign wealth fund, into two smaller entities to encourage competition and maximize Norway’s investment returns.

The two parties remain at odds over cabinet posts, though it’s widely expected than Jensen will hold the finance portfolio.

By way of background, the Conservative/Progress coalition will hold 77 seats — and all four center-right parties will hold 96 seats — in the 169-member Storting, Norway’s parliament.  Though the center-left Arbeiderpartiet (Labour Party) of outgoing prime minister Jens Stoltenberg won more seats than any other party in the September 9 election, its coalition allies suffered huge losses — the Conservatives placed a close second and the Progress Party finished third, and a broad center-right government had been widely expected even before the election.

storting

Top photo credit to Vegard Grøtt / NTB scanpix.

Norway

Solberg favored to become prime minister as Norway votes today

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In Norway, voters will decide today whether to deliver prime minister Jens Stoltenberg a third term in government.norway

Stoltenberg, in his eighth year of office, leads the center-left Arbeiderpartiet (Labour Party) that dominates Norway’s governing ‘red-green’ coalition.  But while the center-right Høyre (literally the ‘Right,’ or more commonly, the Conservative Party) consistently led polls as the most popular party throughout the summer, Labour has caught back up in the polls, and the two are neck-in-neck to determine which will win the most votes today.

But even if Labour wins the largest share of the vote (as it’s done in every election since 1927), the Conservatives remain heavily favored to form Norway’s next government because the center-right parties, taken together, far outpoll the center-left parties.  Labour’s two smaller allies, in particular, are faring poorly in polls.

That means that Conservative leader Erna Solberg (pictured above, left, with Stoltenberg, right) is predicted to become Norway’s next prime minister with the support of the Folkeparti (Christian Democratic Party) and the Venstre (the Liberal Party), but also the Framskrittspartiet (Progress Party), a far-right, populist anti-immigration, anti-tax, anti-social welfare party formed in the 1970s.  Solberg leads a party that’s undergone a major rebranding in recent years — Solberg, from western Norway, leads a relatively moderate center-right party that hopes to lower taxes but otherwise promises quite a bit of continuity with Stoltenberg’s policies.  With a base in Oslo, the Conservatives are very business-friendly, and are likely to continue both the fiscal prudence of the Stoltenberg government (which diverts much of Norway’s annual budget surplus into its oil fund) as well as the social welfare state that’s come to define Norwegian government.

Although the Progress Party is currently the second-largest party in Norway’s Storting (Parliament), it’s never been part of a government in Norwegian history.  So even though it’s likely to lose seats today, its leader Siv Jensen will have the votes to bring Solberg a broader right-wing majority — and to demand the finance portfolio, despite the fact that Progress has radically different views about Norway’s finances than Labour and the Conservatives.

If Labour holds on, it will be due to Labour’s historically strong political base in the Norwegian heartland and its get-out-the-vote efforts, but also due to hesitation over putting the Progress Party in power, not any hesitation about Solberg.

Norway, a country of just five million in Scandinavia, is one of the wealthiest countries in the world, with a GDP per capita of about $50,000 to $60,000, due in large part to Norway’s oil wealth.  Voters will elect all 169 members of the unicameral Storting on the basis of proportional representation by choosing candidates from among 19 multi-member districts.  The electoral threshold for entering parliament is 4% of the vote.  Although Norway has twice rejected joining the European Union (most recently in a 1994 referendum), it is a member of the European Economic Area, so like Iceland and Liechtenstein, it is a member of the European single market, even though it doesn’t have any input on policymaking as a European Union non-member.

For more of Suffragio‘s coverage on Norway’s parliamentary elections:

  • here’s a look at how Solberg and the Conservatives ended up such strong frontrunners in 2013;
  • here’s a look at why no one should count out Stoltenberg and Labour today; and
  • here’s a look at tensions among Norway’s center-right parties and why a broad center-right government is still more likely than a ‘grand coalition.’

United Kingdom

Cameron reshuffle nudges UK government rightward

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UK prime minister David Cameron announced his first major cabinet reshuffle Tuesday since taking office in May 2010.

As predicted, justice minister Kenneth Clarke was demoted to ‘minister without portfolio,’ marking what will likely be the end of front-bench politics for the ‘big beast’ of Tory — and British — politics, and for his thoughtful take on prison reform.  He’ll be replaced by the far more right-wing (and non-lawyer) Chris Grayling, an up and coming figure on the Tory right, who had previously served as employment minister.  From The Guardian:

Grayling’s appointment also signals a determination by Cameron to take a tougher line on sentencing, the Human Rights Act, legal aid and community punishment, a nexus of policy issues that has left Conservative backbenchers frustrated by what they regarded as Clarke’s willingness to pander to Lib Dem opinion.

Lady Sayeeda Warsi, the only Muslim in the cabinet and a one-time rising Tory moderate star, was also demoted, from co-chair of the party to senior minister of state at the Foreign Office.

Cameron’s reshuffle among junior ministerial offices was much more thoroughgoing, and also marks a significant swing to the right — and a swing to a cabinet that is ‘more male, white, southern and Oxbrigdge’.  The net effect will be to isolate further deputy prime minister Nick Clegg, the leader of the Liberal Democrats.  Chancellor George Osborne will keep his job, meaning that there’s no shift from the budget austerity upon which Cameron has staked his government’s legacy.