Photographer: Wolfgang Kaehler/LightRocket via Getty Images

Norway Government Crisis Averted as Budget Deal Is Secured

Norway’s minority government reached a budget deal with its two support parties, bringing an end to a political crisis that risked culminating in a confidence vote at a debate in parliament on Monday.

After increasing turmoil during the week, a last-minute accord was struck with the government agreeing to further measures to cut greenhouse gas emissions among other initiatives, the four parties announced at press conference late Saturday in Oslo. About 7 billion kroner ($830 million) were shifted to clinch the deal, Finance Minister Siv Jensen said at the briefing. No additional oil money was used, she said.

“The deal secures the overall budget proposal from the government,” Jensen said. “It’s budget for more jobs, better welfare and more security.”

Heading into an election year in 2017, the two support parties, the Christian Democrats and the Liberals, this week walked away from talks amid discord over climate policy, throwing Prime Minister Erna Solberg into her most serious political crisis. The government had refused to budge on a plan to lower fees and taxes for motorists to compensate for increased gasoline and diesel taxes. 

Speculation had grown that without a budget deal Solberg would have to call for a confidence vote in her government at the scheduled budget debate Monday.

To read more on Norway’s oil-fueled spending, click here

The impasse comes at a critical time for Norway. The economy of western Europe’s biggest oil exporter is showing signs of reviving after struggling through the worst crude market downturn in a generation. The recovery is due to massive fiscal stimulus from the government and record low interest rates.  

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