Posted on September 14, 2009

Norway’s ‘Thatcher’ Eyes Poll Chance

Andrew Ward, Financial Times (London), September 13, 2009

She casts herself as the Margaret Thatcher of Norwegian politics, intent on overhauling the country’s big-government welfare system and tightening its borders against immigration.

If opposition parties win a majority in Monday’s parliamentary election, Siv Jensen could get the chance to put some of those ideas into practice.

Her populist Progress party is the dominant force among several opposition groups aiming to oust Jens Stoltenberg, prime minister, and his centre-left government after four years in control of the world’s fifth-largest oil exporting nation.

Opinion polls show the race on a knife-edge, as the ruling Labour party and its coalition partners fight to defend the Nordic welfare model against opposition calls for lower taxes and more free enterprise.

“We already have conservative governments in Sweden and Denmark,” Ms Jensen pointed out in an interview with the Financial Times on Sunday. “So the Nordic model is over-rated.”

With Finland also controlled by the centre-right, Norway is the last bastion of social democratic rule in the Nordic region, with the exception of Iceland, which shifted to the left after last year’s banking crisis.

Mr Stoltenberg is hoping his government’s response to the global downturn will help him become the first Norwegian prime minister to be re-elected in 16 years, as the country’s oil wealth helps insulate the country from the sharp recessions suffered by its Nordic neighbours.

Rules limiting how much of the country’s $400bn oil fund can be spent each year were temporarily cast aside to stimulate the economy, keeping unemployment at about 3 per cent, compared with nearly 8 per cent in Sweden and Finland.

Gross domestic product, excluding oil, returned to growth in the second quarter after a mild recession–the country’s first in two decades.

“This is a stable government that stood up to the financial crisis–that is our central message,” says Jonas Gahr Store, Norway’s foreign minister and a senior Labour official, in an interview.

Ms Jensen’s Progress party wants to permanently relax limits on oil spending to lower taxes and invest in infrastructure–tapping into voter misgivings about the country’s strategy of hoarding oil revenues while keeping tax rates among the highest in Europe.

“We are one of the richest countries in the world, yet our health and education systems have all sorts of problems,” says Lotti Lovold, a retired medic, strolling along a parade of party campaign stands in a central Oslo park.

“We should use the oil money to bring them up to standard.”

Ms Lovold’s husband, Per, is drawn to Progress by its tough stance on immigration in a traditionally homogeneous country where immigrants now make up more than 10 per cent of the population.

“We have been paying for this welfare system for years and these people are coming in and robbing us,” he says.

Ms Jensen has played down the immigration issue during this campaign as she seeks to push her party from the margins to the mainstream. For the first time, the Conservative party, the second-largest opposition faction, has said it is willing to work with Progress in a coalition government, but potential centrist allies remain wary.

If opposition parties cannot reach agreement, the left may be able to remain in power even without a majority.

Ms Jensen says she is willing to make concessions in order to unify the right–perhaps even forfeiting the prime minister’s job, provided her party has a strong hand in government. “My priority is the policymaking, not the position,” she says.

People on the left are horrified by the thought of Ms Jensen in power. Greta Johnson, a retired teacher, says the Labour party represents “the Norway I know”.

“This party has been good to me,” she says. “If we switched to a more capitalist system I would lose the benefits I have been paying for all my life.”