Norway’s centre-right parties start coalition talks

Norway’s four centre-right parties have started coalition discussions after their strongest ever electoral showing suggested the Nordic country’s oil wealth had shifted its politics to the right.

Erna Solberg, leader of the Conservatives, who is expected to be prime minister, said on Tuesday she anticipated tough talks over the shape of a new government in the five weeks left until Jens Stoltenberg’s centre-left coalition steps down.

“It is challenging to have to negotiate with the other parties. We all must give and take. I think we have a good foundation, but we will all be tough negotiators,” Ms Solberg said.

The four centre-right parties won 96 seats, against 72 for the current centre-left coalition. But it is unclear whether Ms Solberg will govern with the populist Progress party alone or persuade two smaller centrist parties – the Christian Democrats and Liberals – to join.

Both the latter have expressed severe reservations about being in government with Progress, known for its anti-immigration views and for having Anders Behring Breivik, the extremist who killed 77 people in terror attacks in 2011, as a former member.

Political observers say they are unsure whether the shift to the right reflects a long-term trend or mere weariness with Mr Stoltenberg’s eight-year tenure. But they underline how Norway’s growing oil wealth – its sovereign wealth fund is by far the world’s largest with $750bn in assets – is dulling the traditional appeal of the centre-left.

“The importance of politics is not so great any more because of the riches and the welfare explosion. There is a feeling that it is very easy to administer this country and that it should be possible with fewer resources and less state too,” said Aslak Bonde, a political commentator.

Norway has had centre-right governments before but all have been minority coalitions. Observers say it is the last of the Nordic countries to stay wedded to the region’s long-held preference for social democracy, but that this is slowly changing.

The difference between many centre-left and centre-right parties is minimal in Norway and the wider Nordic region. Centre-right governments hold power in Sweden, Finland and Iceland, but elections next year could see a change of coalition in Stockholm, while Denmark has the only centre-left administration in the region.

Even in the Progress party, branded as “far right” by some, in particular for its tough views on immigration, there is broad support for the welfare state and increased public spending. As Ketil Solvik-Olsen, deputy leader, said: “In the US the Republicans would call us damn socialists.”

Nonetheless, the prospect of Progress entering government for the first time in its 40-year history is provoking unease among some centrist parties and voters, as well as foreign investors.

Leaders of the Christian Democrats and Liberals have toned down earlier rhetoric that they could never be in government with Progress – a reflection in part that they each received about 5 per cent of the votes compared with 16 per cent for Progress. “We will fight tooth and nail for the mandate voters have given us. We will have power and influence on the important things in society,” said Trine Skei Grande, head of the Liberals.

The importance of politics is not so great any more because of the riches and the welfare explosion

However, Kjell Magne Bondevik, the last centre-right prime minister and a Christian Democrat, said his party might have reason to shun a coalition: “In a key position [in parliament], one can be freer because you don’t have the hour-by-hour responsibility for policy as in government.”

One potential source of conflict is oil exploration, with the Conservatives and Progress wanting to open up new areas such as the picturesque Lofoten Islands but the centrist parties are vehemently opposed.

Foreign investors are worried that the Progress party, whose leader Siv Jensen is expected to become finance minister, wants to abolish the rule under which the government can spend only a maximum of 4 per cent of the oil fund’s assets annually.

Jan Tore Sanner, deputy leader of the Conservatives, insisted this would not happen, vowing: “We will stick to the spending rule.”

He added that the Conservatives would prioritise extra spending on teachers, healthcare and infrastructure. But he also pledged to cut taxes to help Norway’s non-oil sector, struggling under the weight of the petroleum industry.

“The Norwegian economy is healthy but we are very dependent on a high oil price. So for the Conservative party it is very important to help small and medium enterprises with tax cuts, and spending more on roads and on research,” he told the Financial Times.

Mr Stoltenberg, who will resign as prime minister after presenting next month’s budget, on Tuesday said he would continue as leader of Labour, which maintained its 89-year record of coming first in every parliamentary election, taking 31 per cent of the vote to the Conservatives’ 27 per cent.