Norway's premier on the outs, despite healthy economy

Norway’s prime minister, Jens Stoltenberg, is worried, and not just about the European economic crisis. After ten years of leadership, the Labor premier is tipped to lose reelection this September – despite the healthy Norwegian economy.

The latest polls show the non-socialist block could win a majority of parliamentary seats, with Conservative leader Erna Solberg pegged to most likely lead a coalition government. The Conservative Party is predicted to win 36.2 percent of the votes, with Labor trailing by nearly 10 percentage points at 26.4 percent, according to a poll for Norwegian daily Aftenposten this month.

So what has happened to make Norwegians so disenchanted with the slightly greyer, but still charismatic, socialist premier?

“My challenge is that people are satisfied,” said Mr. Stoltenberg, during his final summer press conference last week at the prime minister’s residence in Oslo. “It’s amazing how little Norway has been affected by the financial crisis up until now.”

The oil-rich country has fared relatively well during the global downturn. Unemployment in Norway is currently only 3.5 percent and the country has maintained high housing prices. But there are “warning lamps” showing that the European crisis will start to be felt in Norway, he said, pointing to waning industrial investments, rising unemployment, falling exports.

He warned that the Conservatives and the Progress Party, the two right-wing parties, would squander the budget and put the country’s economy in jeopardy. The country needed responsible fiscal strategy, not tax cuts. “Now is not the time to experiment,” he said, given the future uncertainty.

But Ms. Solberg countered Stoltenberg’s criticism in a press conference yesterday, highlighting it’s not how much the government spends, but how. She claimed the current Labor-led governing coalition has been fiscally irresponsible the past eight years by letting the country's economy become too oil-dependent and uncompetitive.

“It’s not the euro or EU situation or the economic crisis outside that is a challenge for the Norwegian economy,” said Solberg. “It’s also that we have not used the good times to lift our growth potential.”

The Nordic nation has seen a rise in conservative “blue” voters since the early 1990s, while voter support for the centrist “green” parties has dipped, according to electoral statistics by Bernt Aardal, professor at the Institute for Social Research in Oslo. If the trend prevails, this could be the first time since 1927 that the Conservatives topple Labor’s historical dominance as the largest party in a parliamentary election.

Johannes Berg, a senior research fellow at the Institute for Social Research, thinks this is a real possibility. He believes the prime minister is trying to use the same card that won him a second term in 2009, namely the financial crisis. The problem is that there is not the same sense of urgency as there was back then and that “voter fatigue” has set in.

“If you look at the politics in Norway over the last 20 to 30 years, sitting governments tend to fall after four years, even in good times,” says Bergh. “The last election in 2009 was sort of a deviation for that pattern. The general attitude is that Norway is doing really well.”

“If the Labor Party or the sitting government is going to win, something really major needs to happen.”