Siv Jensen holds key to future Norway coalition

Siv Jensen may form coalition with Conservatives. Picture: AFP
Siv Jensen may form coalition with Conservatives. Picture: AFP
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AN ANTI-IMMIGRATION politician is set to hold the balance of power after Norway’s elections on 9 September.

Siv Jensen narrowly missed becoming prime minister four years ago but her Progress Party is now on course to finish in third place behind the Conservatives and Jens Stoltenberg’s ­ruling Labour party.

Without Ms Jensen’s co-operation, the centre-right opposition will be unable to form a majority government in the absence of an overall winner.

Talks between Ms Jensen – an admirer of Margaret Thatcher – and Conservative leader Erna Solberg, who is tipped to become the next prime minister, will be fraught, however.

Ms Jensen’s populist party will probably have to drop its most controversial demands on immigration and how to spend Norway’s oil wealth, as the price of a share of power.

But in coalition talks it might get some of its way on its goals of cutting Norway’s corporate tax burden, shrinking government, privatising state firms and reshaping the £485­billion sovereign wealth fund.

“We have been fighting ­socialism for 40 years,” said Ms Jensen, 44, referring to the ­Labour party, which has led most governments since the ­Second World War. “We are fighting for change.”

Ms Jensen is tipped to become finance minister in a centre-right coalition. Progress is polling around 14-15 per cent, putting it on course to collect 26 seats in the 169-seat parliament.

The Conservatives have around 32 per cent and Labour 29 per cent.

Potential allies will be nervous of joining forces with Progress, whose members once briefly included Anders Behring Breivik, who went on to become Norway’s worst ever mass murderer, and its anti-immigration policies are considered extreme in Norway.

Progress has little chance of achieving the crackdown it wants on immigration, running at about 40,000 incomers a year in a country of five million, especially as unemployment remains below 3 per cent.

As well as radical tax cuts, it calls for the easing of protectionist trade policies that insulate the economy. It also wants to axe a rule that limits how much oil money government can spend and allow the oil fund to invest at home, a move which critics say would distort the economy.

“It’s good to have money saved up but it’s also good to have a well-functioning infrastructure and a society that works,” said Ms Jensen. “We need to reduce some of the surplus every year so we can invest more in infrastructure and in repairing buildings and all that, because we really need that.”

The Conservatives, however, firmly support the fiscal rule that limits spending to 4 per cent of the oil fund and guarantees massive budget surpluses.

They also oppose bringing oil fund investments home and reducing immigration, as it risks choking the private sector.

Progress would use the oil fund for infrastructure spending, and break off funds to invest in renewable energy and for foreign aid. “For a rough estimate, if the fund is worth 4,500 billion crowns [£485bn], the main fund would be worth 4,000bn crowns and the remaining 500bn crowns would be ­divided between three smaller funds,” said Ketil Solvik-Olsen, the Progress Party’s finance ­spokesman.

Analysts have also claimed a new government might sell down in industry majors such as Telenor, Statoil and Norsk Hydro. Progress, like the Conservatives, wants to reduce the stakes the state holds in several other firms too.

“The companies at the forefront of this debate are of course SAS and Cermaq,” said Mr ­Solvik-Olsen, referring to the troubled Nordic airline and the Norwegian fish farmers.

Norway has a budget surplus of 12 per cent of GDP and has no net debt, but the figures are skewed by the massive oil sector.

Excluding petroleum revenues, the structural deficit is rising and government spending is crowding out the private sector.

Progress is expected to compromise to secure a place in government but the Conservatives will have to be flexible to make the coalition work. Ms Jensen is nothing but pragmatic, saying: “You negotiate inside a room, not in public.”