Tesla Loving Norway Picks Pro Oil Labor

Tesla Loving Norway Picks Pro Oil Labor
Norway's opposition Labor Party will begin talks on forming a new ruling coalition after winning an election dominated by disputes over the Nordic economy's dependence on fossil fuel.

(Bloomberg) -- Norway’s opposition Labor Party will begin talks on forming a new ruling coalition after winning an election dominated by disputes over the Nordic economy’s dependence on fossil fuel.

A likely coalition led by Labor, headed by millionaire Jonas Gahr Store, is poised to secure a five-seat majority in the 169-member parliament, according to preliminary data on the election authority’s website on Tuesday. That would allow it to oust the Conservative-led alliance that’s been in power for two terms.

While Norwegians love their Teslas and have the most electric vehicles per capita, the country’s wealth is based on the oil and gas that built a $1.4-trillion sovereign wealth fund. Both the Conservatives and Labor support the industry, and Store has acknowledged the oil era will soon be over, but he’s against ending exploration.

A ruling bloc with the agrarian and euro-skeptic Center and the Socialist Left would mirror a set-up that ruled for two terms starting 2005. While the latter wants to put an end to new exploration licenses, Store has signaled a compromise that will see drilling focused around already developed areas in a bid to ease forming a coalition.

Having studied at the Institute d’Etudes Politiques de Paris and taught at Harvard, Store campaigned to finance more welfare for “ordinary” people by reversing tax cuts, and a “fair” climate policy.

“Most likely, income taxes for the highest income deciles will increase, and the wealth tax will probably be raised,” Swedbank analysts wrote in a note. While Labor, the Socialist Left and Center are in favor of somewhat more state ownership, it will be as close to business as usual for the economic outlook it could get with a change in government, they said.

The outcome means Store would most likely avoid having to seek support from fringe parties, including the communist Red Party, to put together a functioning coalition even as Labor’s showing was the weakest in two decades. The Greens, who demanded phasing out the fossil fuel industry by 2035, trailed polls for a second election in a row.

Premier Erna Solberg’s Conservatives stand to lose the most seats in parliament, even after she was helped by record spending from the sovereign wealth fund, the world’s largest. The richest Nordic economy on a per capita basis, which has topped Bloomberg’s Covid Resilience Ranking for the last two months, has weathered the pandemic better than most wealthy peers.

“In the course of the coming days, I will invite the leaders of all parties that want a change in government to political discussions,” Store, 61, a former minister of foreign affairs and health care, said at a party event in Oslo. “It’s natural to start with the Center Party and the Socialist Left, our preferred partners.” 

© 2021 Bloomberg L.P.


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