Government talks start Monday
September 24, 2009
Norway’s re-elected left-center government coalition faces a much tougher four years ahead than the four years they just wrapped up. The party’s over, economically speaking, and leaders of the three parties involved will have to set tougher priorities. Hardly anyone thinks they’ll be able to fulfill all their campaign promises.
The leaders of the Labour Party, the Center Party (Sp) and the Socialist Left (SV) will start hammering out a new platform on Monday and the going won’t be easy. They still disagree on many key issues and the conditions under which they’ll be working will be much less favourable than they were during their last term.
The government they held together from 2005 to 2009 enjoyed strong economic growth and high oil prices that allowed historically high usage of oil and gas revenues.
At the same time, their government faced relatively low growth in social welfare expenditures. The global financial crisis that hit during the last year of their term, meanwhile, resulted in record low interest rates and offered new possibilities to use unusually high amounts of state funds for government stimulus packages.Now incumbent Prime Minister Jens Stoltenberg and his coalition colleagues, Kristin Halvorsen of SV and Liv Signe Navarsete of Sp, face an entirely different scenario. Economic growth is expected to be low. Oil prices are also expected to remain relatively low, at least lower than the peaks they hit during the past four years.
That means a lack of the windfall profits and waves of new petrokroner that Norway’s offshore oil and gas industries provided during the past four years. At the same, demands for social welfare funding are expected to grow, with much higher payouts likely, while interest rates will likely rise and budgets will be tight.
This doesn’t bode well for the ambitious campaign promises made by each party leader during the past several months. Their ability to actually fund the reforms and improvements they want will be reduced.”Kristin Halvorsen has been the luckiest finance minister for very many years,” Per-Kristian Foss of the Conservatives, a former finance minister himself, told newspaper Aftenposten . “Strong growth and high oil prices gave her enormous opportunities. Those years won’t come back again.”
The research director for state statistics bureau SSB said last week that he doesn’t think, for example, that the government will be able to help townships fund full nursing home coverage by 2015.
“I won’t say that fulfilling such promises is impossible,” said Halvorsen’s state secretary in the finance ministry Roger Schjerva. “But there’s no doubt it will be demanding.”