It has enjoyed unprecedented wealth for decades due to its massive oil profits and is the only big European nation not to be in the European Union. This week Norway faced a stark choice: continue ploughing oil revenues into its generous welfare system or introduce tax cuts, privatization and crack down on immigration. On Monday voters opted to defend the current system and returned the governing coalition, making Oslo the last bastion of the center-left in Scandinavia.
The coalition of Prime Minister Jens Stoltenberg's Labour Party, the Socialist Left and the Center had campaigned on defending the welfare state and protecting jobs and it just about held onto its slim majority, picking up 86 out of 169 seats. It was the first time a sitting government has won re-election in 16 years in Norway.
However, the populist Progress Party which campaigned on a platform of tax cuts, privatization and restricting immigration, fared well, securing 22.9 percent of the vote and 41 seats, making it the second biggest party in the parliament. The party, led by the outspoken Siv Jensen, has seen its support grow largely at the expense of the center-right Conservative Party. Her hardline campaign, which accused immigrants of sponging off the welfare state and committing crimes, divided the traditional right. Even if the opposition parties had secured a majority, it could have proved impossible to reach a coalition agreement because of some parties' reluctance to be associaited with the Progress Party.
In the end it seems to have been the government's handling of the economy that tipped the scales. Norway is the world's fifth largest oil exporter and has enjoyed immense wealth since striking oil almost four decades ago. The country emerged from the global financial crisis relatively untouched. After a brief recession, the economy is growing again and it boasts the lowest unemployment in Europe at just 3 percent. The government spent 30 billion kroner (€3.5 billion or $5.07 billion) of extra oil revenues on a stimulus package.
Successive governments have placed Norway's oil revenues in a massive state fund to help finance the country's generous social welfare system. However, many Norwegians are unhappy with what they consider deteriorating services despite paying some of the highest taxes in the world.
Foreign policy was largely absent from the campaign, particularly the issue of Norway's continued refusal to join the European Union. The country has held two referenda on possible membership, the most recent in 1994. Although Stoltenberg voted yes back then, he says he has no intention to seek membership again. "I don't seek new defeats," he told reporters on Tuesday. "I'm concerned with winning."
However, there is speculation that Norway could reassess the situation if Iceland opts to join the 27-member bloc. Norway and Iceland are currently members of the European Economic Area, giving them access to EU markets.
German newspapers on Wednesday largely credit Stoltenberg's victory with his handling of the crisis, made possible through Norway's vast oil wealth but some question why the European Union played no role in the campaign.
The conservative Die Welt writes:
"Since the 1970s (Norway) rapidly turned from quite a poor country to a very rich one thanks to its oil supplies. And because there is so much oil the country has survived the financial crisis almost completely unscathed."
"It is therefore not surprising that the coalition led by the Social Democrats was re-elected, even if it was close. The big bourgeois parties had campaigned for the rather unpopular policy of budget restrictions -- something that didn't exactly make them attractive. And the only prospect for getting into government was by going into coalition with the right-wing populist Progress Party, who are now the second biggest party and campaigned above all for a tougher asylum policy and dealing more harshly with criminals. But that in itself is a signal. Almost one quarter of Norwegian voters opted for the troublemakers on the far-right populist fringes. This could be a trend -- when one looks at Denmark. It is in the Scandinavian countries that are so proud of their welfare system and that are so marked by a great trust in the state that the cracks and the unease is all the greater. Everything is not half as peaceful as it seems on the surface."
The center-left Süddeutsche Zeitung writes:
"Norway's Prime Minister Jens Stoltenberg scored a huge success on Monday. He was the first Norwegian prime minister to be given a second term in office by the voters in 16 years. And what is most remarkable is that his three-party coalition will continue to form the government."
"Stoltenberg's victory shows that the political landscape in Norway has changed. Instead of basing government on a broad consensus in parliament, the parties are now opting much more for confrontation and the formation of blocks."
"Stoltenberg's success was based above all on the fact that he could point to a clear alternative for government -- with himself as the focus. The voters knew that a vote for the Social Democrats, the Left Party or the Center Party was a vote for Jens Stoltenberg. On the bourgeois side of the spectrum, things were more difficult. Two candidates were vying for the position of prime minister, Siv Jensen and Erna Solberg. There was no clear coalition agreement because two smaller parties wanted nothing to do with Jensen's populist Progress Party."
"Another step has been taken toward the polarization of the political landscape. The bourgeois parties will spend the years in opposition putting aside their differences and making compromises so that they can at some point come back to power. This is good for the voters. It is easier to make a decision when there are clear alternatives."
"However there the disadvantages of the formation of blocks was also laid bare in Norway. The parties avoided some important issues in order not to jeopardize their own camp's unity. Norway's relationship to the European Union, for example, played no role -- this is an issue where disagreement cuts right across party lines. The question of whether to drill for oil off the Lofoten Islands hardly got a mention. The Social Democrats ended any debate by saying they would only decide after the elections. That was probably to avoid a dispute with the Left Party which rejects drilling for oil there. The future of the Norwegian troops in Afghanistan was also hardly discussed -- there are also differing opinions on this issue in Stoltenberg's alliance."
"In the end there was just one big question: 'Should the next prime minister be called Stoltenberg?' The voters have now given their answer. The exact consequences of that decision remain unclear."
The center-right Frankfurter Allgemeine Zeitung writes:
"Ever since the discovery of off-shore oil elections in Norway have been about the oil billions. Social Democrats have always dealt responsibly with this -- they put the money away for a rainy day, while making sure of course that their clientele were well taken care of. Who would hold it against them if this means that even in these times full employment is a matter of course? Norway is the original of a system that has since been copied by the bourgeois parties in other Scandinavian countries: the state is the focus of a consensus-orientated welfare policy. Sweden is the only country where this has not seen entire groups of voters turning to protest parties. The People's Party in Denmark and the Progress Party in Norway have benefited from the contradiction that the state spends a lot of money, provided by taxpayers, and yet the social infrastructure is getting worse. However, in Norway, the left has an invaluable method of bribing voters: oil."