NEWS ANALYSIS: Warnings of an “autumn storm” breaking out in the Norwegian Parliament this week were premature. After a roughly 18-hour workday that began before dawn on Norway’s annual “Budget Day,” Finance Minister Siv Jensen could relish a surprisingly good reception to the state budget proposal for 2018 that she’d presented and defended until late into the night.
It’s the latest example of Jensen and her conservative Progress Party beating the odds once again. Not only did they win re-election last month after managing to hold on to government power with the Conservatives for the last four years: They now are winning respect and more acclaim, for continuing to help guide Norway out of troubled times. Progress has been the party that many Norwegians loved to hate, and branded as right-wing populistic. While it still features some controversial, outspoken politicians like Sylvi Listhaug and Per Sandberg who cater to Norway’s far right, it also has proven that it has many others capable of governing and getting along, not least with their senior government partners among the Conservatives.
Jensen’s job is to lead them all, and even tough critics have conceded she’s done a good job. Arne Strand of left-leaning newspaper Dagsavisen has begrudingly conceded that Jensen and some of her colleagues have shown “competence,” while a professor at NTNU in Trondheim, Anders Todal Jensen, has argued that Progress is no longer a right-wing populist party but rather a “born-again classic conservative party.” Harald Stanghelle of newspaper Aftenposten noted just after the election that he could understand how Jensen had to fight back unusual tears of joy on Election Night, because her party had defied the odds and become a government party.
“Jensen has managed what many thought wasn’t possible,” wrote Kjetil B Alstadheim in newspaper Dagens Næringsliv (DN) on Election Day itself. “She has made the Progress Party (long considered a “protest party” in Parliament) a government party, and not just that: It’s a party that now thrives in the government, without having shriveled up or lost its constituency.” As Stanghelle also noted a few days later, Progress didn’t fall into the trap that the Socialist Left party (SV) did, for example, when it joined a left-center coalition with Labour and has since had to win back its soul.
The policies for which Finance Minister Jensen has been responsible clearly worked when Norway was suddenly faced with an economic crisis just a year after Jensen and the Conservatives’ Prime Minister Erna Solberg took office. Jensen and Solberg have proven to be a good team, with Alstadheim citing the Progress Party’s “underestimated” desire to run things, along with a strong dose of pragmatism. Jensen has caved in on several issues (she still hasn’t managed, for example, to get rid of the so-called “document fee” charged on home sales that amounts to another form of property tax), swept much of the party’s climate skepticism into a corner and even accepted more of the toll plazas they despise, in order to finance highway improvements.
Expansive budgets of the past few “crisis years,” meanwhile, allowed Jensen and her party to tap much more heavily into Norway’s oil wealth, something Jensen advocated also during the country’s boom years. She has always argued that it’s important to invest in infrastructure at home instead of simply in stock markets and real estate overseas. Now she’s “letting up on the gas pedal,” though, acknowledging that it’s wiser to cut back on literally oiling her budgets as the economy recovers.
Economists ended up giving the budget she proposed on Thursday generally high marks, with DN reporting that one economist who’d been highly critical last year even gave her budget a top score. “Thumbs up,” Kyrre Knudsen, chief economist at SR-Bank, wrote in a message to Jensen. “You have been a clever finance minister in a demanding time for Norway that’s now coming to an end.”
That’s high praise from a bank based in one of the areas of Norway, Rogaland County, that was hardest hit by the collapse in oil prices and subsequent economic downturn. Even though several economists and commentators think Jensen is still padding the budget with too much oil money (around NOK 230 billion, but well within current guidelines), most gave her “fours” and “fives” on a scale of one to six. Knudsen gave her a six. Hilde Bjørnland, an economics professor at the Norwegian business school BI, told DN the budget proposal sends “a clear signal” that the period of expansive budgets “is behind us.” She gave Jensen a “five,” as did Øystein Dørum, chief economist at the national employers’ organization NHO, who said the budget “takes a very large step in the right direction.”
There was plenty of political opposition in parliamentary debate after Jensen’s budget presentation, that both Jensen and Solberg had to acknowledge and answer, but they could be relieved by a surprisingly friendly response from the two parties that can determine the fate of their government coalition: their former non-socialist support parties, the Christian Democrats and Liberals. They’ve lost their formal cooperation agreement with both, and now need support from both in order to form a majority in Parliament. That’s why Strand was among those predicting “an autumn storm,” but it may have blown over before it began.
Leading MPs for both the Christian Democrats and Liberals said they think they’ll be able to come to terms with Progress and the Conservatives on the budget. They have some demands of their own, but as Dagsavisen reported on Friday, their initial reaction to the budget was “amazingly mild.” Terje Breivik of the Liberals claimed the budget presented “a very good starting point for agreement, and we will contribute to a negotiated result that will be good for the country.”
Kjell Ingolf Ropstad, finance policy spokesman for the Christian Democrats, was just as positive. Budget agreement “is our goal as we head into negotiations.” They’ve earlier stressed that they want Erna Solberg to continue as prime minister, so aren’t inclined to make budget negotiations too difficult.
Both parties have lists of things they don’t like in the budget, like a proposed new tax on vehicles based on weight that can hit electric cars like Teslas for the first time, They don’t like some changes in income tax rules either. The Christian Democrats want more “family-friendly” measures, the Liberals want more highly educated teachers in the schools and both want more measures to fight climate changes and poverty, but their tone is friendly.
Sharing the credit
Jensen herself is also positive, telling reporters that she doesn’t see any huge obstacles to a budget agreement. She was pleased by the positive feedback she received, but didn’t take all the credit herself. She shared it with both the head of Norway’s central bank, Øystein Olsen, and Norwegian business and industrial executives who have cut costs and managed as best they could during the so-called “oil crisis.”
“I’m very glad the most demanding times are behind us, even though there still are challenges in the shipyard industry and some other areas,” Jensen told DN. “But it is going better all over the place.”
Reversal of the downturn, she said, “is a combination of low interest rates, currency exchange rates, moderate wage negotiations and the government’s policies. But there’s no doubt it all worked.”
On Election Night, as she stood before her party faithful and exhibited some unusually strong emotion, she said she was “so proud,” both of the party’s four years in government and its re-election campaign. “We have been honest,” she said with a huge smile, almost gasping for breath as she wiped away a tear. She thanked the Conservatives and Erna Solberg, saying they had “worked well together, and we steered during the worst crisis.
“All the predictions (that the Progress Party wouldn’t last in government) have been beaten down. We have managed, but we still have lots to do. We have to build the country.”