INSIGHT
SEPTEMBER 2013
Norway's opposition Conservatives have led a group of centre-right parties to victory in the parliamentary elections held on Monday 9 September. Promising tax cuts and better healthcare, the Conservatives - along with the Progress Party, the Christian Democrats and the Liberal Party won a majority in the Norwegian parliament. The new government, which is expected to be formed during October, will be led by Erna Solberg (pictured), who will become Norway’s second female prime minister and the first Conservative PM since 1990.
Photo: CC/Flickr Nordiske Mediedager
The centre-right electoral pact won 96 seats in parliament, 11 more than needed for the majority. This election has seen the political balance shift further than ever to the right. The Conservatives, led by Erna Solberg, won 48 of those seats, up from the 30 seats it won in the last parliamentary elections in 2009). The Progress Party won 29 seats, losing 12 seats compared to the previous election, yet will enter government thanks to the gains of the Conservatives and the other coalition partners. The Christian Democratic Party won ten seats (no change on its 2009 score), while the Liberal Party saw a surge in its support and a leap in its representation in parliament from two to nine seats. Together, the centre-right coalition gained 13 seats, while the Red-Green coalition - led by the outgoing prime minister, Jens Stoltenberg, and his Labour Party - lost 14 seats, falling to a total of 72 MPs.
Labour won 55 of those 72 seats (losing nine MPs), with the Centre Party taking ten seats (down one) and the Socialist Left Party seven seats (losing four MPs). The win for the centre-right means that Mrs Solberg becomes the first Conservative prime minister since 1990 and only the second woman to hold the post, following Labour’s Gro Harlem Brundtland, who was prime minister three times between 1981 and 1996. Despite the fall in its representation, much international attention has focused on the Progress Party, which favours greater immigration controls and is poised to enter government for the first time. The Party has been referred to as a right-wing nationalist party in line with Sweden Democrats and the Danish People’s Party - although it sees itself as being closer to Denmark’s Liberal Venstre Party. One MP was elected outside of the two main blocs, with the Green Party winning its first ever MP with a single seat from the capital, Oslo.
Burson-Marsteller EMEA Square de Meeûs 37, 1000 Brussels, Belgium +32 (0)2 743 6611 robert.mack@bm.com
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of Norwegians turned out to vote in the elections
The four centre-right parties have started negotiations on the formation of a new government. The hardest task for the new Prime Minister, Erna Solberg, will be to ‘tame’ the Progress Party and to ensure an inclusive government. Support from either the Christian Democrats or the Liberals will be needed to construct a majority, but these two parties are somewhat reluctant to team up with Progress Party, objecting to its policies on immigration and spending. There is a possibility that Mrs Solberg will lead a minority government. The new government will be appointed by the end of October (most probably on Friday 18 October or Friday 25 October) following the presentation of the state budget on Monday 14 October.
Norway has enjoyed rare economic success during the past decade. The country has escaped Europe's
economic crisis with only minor scratches. The offshore oil sector lifted per capita GDP to US$100,000 and a huge public sector insulated the economy. However, growth is now slowing, competitiveness stagnating, and the outgoing government's record on critical social services has been mixed. The Conservatives promise to diversify the economy away from oil, privatise state firms, and reduce some of the world's highest taxes rates to give the private sector more breathing room. Bringing the Progress Party into government could force Solberg to make concessions on spending, taxes and immigration - although the Conservative and Progress parties agree about lowering income tax and wealth tax. In any case, the next government will a large amount of leeway in terms of its budget. It currently levies a 78% tax on the oil sector, has a huge budget surplus and a US$750bn oil fund worth more than 150% of GDP a financial situation to be envied by many other European countries. One of the main topics for negotiation between the parties will be changes to the oil fund. Both parties want big changes but do not agree on the specifics, with the Conservatives keen to get a broad consensus on any reform to the fund. The Progress Party wants to break off smaller funds from the main fund and spend more of the oil money domestically, while the Conservatives have proposed breaking the fund into competing funds and do not want to spend as much oil money domestically as the Progress Party proposes. The centre-right parties are likely to find common ground on privatisation as they share an analysis that the state has grown too big and that it should sell some of its holdings in companies such as Statoil and Telenor.
Labour Party Centre Party Socialist Left Party
Green Party
55 (-9)
32.5%
Conservative Party
48 (+18)
28.4%
10 (-1)
5.9%
Progress Party
29 (-12)
17.2%
7 (-4)
4.1%
Christian Democrats
10 (-)
5.9%
Liberal Party
9 (+7)
5.3%
1 (+1)
Generally the new government will seek to reduce tariff barriers and more international trade. The new government is also in favour of a strong national defence, and wants to start prioritising investments in Norwegian defence capacities. Membership of Nato will remain the cornerstone of Norway’s security and the basis of Norway’s defence policy. The new government will not seek to make any progress on European Union membership: a recent poll showed that fewer than one in five Norwegians support EU membership. Membership of Economic Area
the (EEA)
of Norwegians want to join the EU, according to a poll published in August; 70% are opposed
European will be
The Conservatives, the Progress Party and the Liberal Party are advocates of free-market economics, stating that economic growth is brought about through a solid financial framework and free competition. These parties want to give developing countries the opportunity to undergo economic growth and development through foreign and by being allowed to sell their goods to Norway unimpeded by special duties and restrictions.
For more information please contact: Robert Mack Chair, EMEA Public Affairs Practice robert.mack@bm.com
0.6%
David O’Leary Director, Government Relations, Brussels david.oleary@bm.com
The outgoing PM, Labour’s Jens Stoltenberg Photo: CC/Flickr Arbeiderpartiet
maintained, and the new government is likely to be more EU-friendly than the one it replaced.
As a small but highly-developed nation, Norway is among the biggest players in the world in several economic sectors. If the Norwegian economy continues to grow as forecasters predict, opportunities for businesses to increase exports to the country will increase. While Norway’s oil and gas industry is likely to be the sector of greatest interest to many, Norway also has other markets that lend themselves to international trading opportunities. It is, for example, the world’s second biggest exporter of fish and seafood products. The new government is seeking to speed up spending on infrastructure projects (road, rail and ports) by using public-private partnerships. The same mechanism will be used in public housing and property development such as building new hospitals. There is also a stated willingness to balance the public and private sectors, particularly in the healthcare field. Original text by Cecilie BreinKarlsen and Julie M Remen, Burson-Marsteller Norway. burson-marsteller.no
Ingrid Langerud Director, Public Affairs, Norway ingrid.langerud@bm.com