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Friday, June 14, 2024

Battle begins over finance ministry

NEWS ANALYSIS: Norway’s small, conservative Christian Democrats party (Kristelig Folkeparti, KrF) may end up with control over the country’s powerful finance ministry in a conservative coalition government, even though KrF only has around 5 percent of the vote in public opinion polls. Voters hoping to get lower taxes, lower food prices and an easing of Norwegian protectionism with a new conservative coalition government are thus likely to be disappointed.

Knut Arild Hareide, leader of the Christian Democrats, may wind up as Norway's next finance minister if the Conservatives need to ask his small party to form a government. PHOTO: Kristelig Folkeparti
Knut Arild Hareide, leader of the Christian Democrats, may wind up as Norway’s next finance minister if the Conservatives need to ask his small party to form a government. PHOTO: Kristelig Folkeparti

That’s because the dominant Conservative Party (Høyre) may need KrF to form a coalition government, at the risk of having to compromise on many of their own campaign platforms. Høyre and KrF have some very different ideas on market liberalism, and it’s less likely, for example, that last year’s controversial new tariffs on cheese and meat (to keep cheaper imports out of the Norwegian market) would be repealed with KrF in control of the finance ministry.

Many find it shocking that Norway’s small parties like KrF can exert so much power and influence, when they lack support from as much as 96 percent of the voting population. But they do, as evidenced by the Center Party (Sp) and the Socialist Left (SV)’s participation in the current left-center government over the past eight years. That’s how the protectionist cheese and meat tariffs that caused such conflict with the EU got approved in the first place: Labour had to give in to the farmer-friendly wishes of Sp. Labour has also had to hold off on oil drilling off Lofoten because of the objections of its two small government partners.

‘Terror’ of the small parties looms
Now what some call the “terror” of the small parties is rearing up again, since new polls show that Høyre and Frp may not win a majority on their own after Monday’s parliamentary election. Then Høyre will have to court both KrF and Venstre, the fourth non-socialist party, in order to form a government and secure a majority in parliament.

Uncertainty over exactly what sorts of policies will result from a non-socialist coalition government thus deepened this week, when KrF made it clear that they’ll fight hard to win the finance minister’s post if the party is asked to join a Høyre-led coalition. “It’s absolutely an attractive post for us,” Knut Arild Hareide, leader of KrF, told newspaper Aftenposten. “But our focus is on winning the election, and we know that the election results will decide this.”

Hareide, who served as an environment minister in an earlier non-socialist coalition, may wind up as a prime candidate for finance minister himself. The other candidate from KrF is its current parliamentary leader Hans Olav Syversen. Syversen, an MP for KrF from Oslo, has been a member of the parliament’s finance committee but Aftenposten noted that KrF’s poor showing in the polls means he may not be re-elected to parliament. Then it would be more important than ever for KrF to find a powerful spot for him somewhere else, for example as a government minister.

Field wide open
If, after election results are tallied, Høyre and Frp do hold a majority on their own, they presumably won’t need to negotiate with KrF or Venstre. If they don’t, the make-up of a new non-socialist government will be wide open, depending on the standing of each individual party. Høyre leader Erna Solberg may invite Frp and Venstre to hammer out a joint platform, or she may invite Venstre and KrF to negotiate formation of a government, if they together have enough votes to put the non-socialists over the top. It’s unlikely Solberg can get both KrF and Frp to the table together, since KrF has indicated its differences with Frp are too strong.

Frp, meanwhile, has had its eye on the finance ministry for months, with Frp leader Siv Jensen often mentioned as a likely new finance minister. That may delight free-market thinkers but scare economists who worry Jensen will then want to spend too much of Norway’s oil revenues. They fear that will overheat the economy and boost inflation.

Høyre, meanwhile, may also battle to keep the finance ministry post for itself and thus control three of Norway’s most prestigious ministries: The Office of the Prime Minister, the finance ministry and the foreign ministry, like Labour does now. If Høyre wins enough votes to be dominant enough, that’s entirely possible, leaving some of the other ministries to the smaller parties. Berglund



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