Norway adds party to weak coalition
Norway’s right-of-centre coalition government yesterday (Sunday) added a small centrist party, but remains a minority administration and will continue trying to build the majority needed to pass legislation.
Prime Minister Erna Solberg, who has been in power since 2013, enjoyed only a narrow victory with her coalition partner, the anti-immigration Progress Party, in the September election. The new deal with the Liberal Party was unveiled by the three party leaders after 10 days of negotiations.
As part of the deal to expand the cabinet, the Norwegian Arctic regions of Lofoten (pictured), Vesteraalen and Senja will remain off-limits to oil exploration until at least 2021, a key Liberal demand to protect Arctic fisheries.
The decision, although expected, disappointed energy firms which hoped to raise output from Norway, western Europe’s largest producer of oil and gas.
“The potential for future value creation and jobs in these regions is large,” said lobby group Norwegian Oil and Gas.
The distribution of ministerial jobs among the three parties will take a little longer to settle with an announcement expected by Friday.
Even with the addition of the eight Liberal parliamentarians, the coalition remains short of a parliamentary majority, with 80 of the 169 lower-house seats, and the search for partners continues.
Traditional ally the Christian Democrats, who also have eight seats, have resisted offers to enter the administration.
The Christian Democrats back the prime minister on fiscal matters but have rejected a formal deal.
The three parties said they would continue to reform Norway’s US$1-trillion sovereign wealth fund, but did not promise any specific change.
Among the proposals considered for the Government Pension Fund of Norway, the world’s largest sovereign wealth fund, is a suggestion to allow it to invest in unlisted firms and infrastructure projects, as well as a potential split from its current manager, the central Norges Bank.
The government could also further restrict banks’ lending to consumers and impose limits on interest rates in a bid to curb rapid increases in unsecured debt, it said yesterday.
Non-mortgage borrowing has risen sharply in recent years, resulting in a boom for specialist lenders such as Bank Norwegian and Komplett Bank, while troubling regulators.
Solberg has presented a wide-ranging policy platform for her government.
“The government will consider additional tightening of consumer lending,” the Conservative, Liberal and Progress parties said in a joint announcement.
“It will also consider whether to impose an upper limit on interest rates for unsecured consumer loans,” the new partners added.
Lofoten. Picture credit: Pixabay