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Negotiations and deals: What happens next after Norway's budget announcement?

Robin-Ivan Capar
Robin-Ivan Capar - [email protected] • 7 Oct, 2022 Updated Fri 7 Oct 2022 09:37 CEST
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The Støre government needs to find a so-called "budget partner" to pass its budget through the parliament. Photo by Morten Brakestad / Stortinget / flickr / Press

On Thursday, the Norwegian government presented its state budget proposal for 2023. But that doesn't mean it will automatically by rubber stamped by parliament. Here's a look at what happens now.

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Now that the state budget proposal for next year has been made public, expect multiple weeks of hard negotiation between the government and its most likely (and preferred) budget partner - the Socialist Left Party (SV).

As the Støre government doesn't have a majority in the parliament, it will need to find a so-called "budget partner" to pass its budget through the Storting.

Last year, the budget proposal negotiations were somewhat atypical, as the country held parliamentary elections on September 13. The outgoing Conservative Prime Minister Erna Solberg presented her government's proposal for the 2022 state budget on October 12.

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After that, the new Labour and Centre party government made its own changes to the proposal set forward by the Solberg government, after which that proposal was subjected to further changes in negotiations with the SV.

The run-up to the negotiations

As was the case in 2022, the government will likely look to maintain its budget partnership with the SV.

Audun Lysbakken's party has already voiced precise demands, despite the fact that the official negotiations haven't started yet. They want even higher taxes for the wealthy, more measures that promote social redistribution and equality, and more commitments to fighting climate change.

"There is both the room for – and the need for – more vigorous redistribution. We have only small changes in, for example, wealth tax…

"We must put measures in place that will put Norway on track to reach the climate targets. It is very important to us," Lysbakken said on Thursday.

The official start of the negotiations

The SV's first step will be to prepare an alternative budget, which they expect to have ready by the end of the month. Only then will the negotiations officially start.

The Socialist Left Party's deputy leader Torgeir Knag Fylkesnes will lead the budget negotiations for the SV since fiscal spokesperson Kari Elisabeth Kaski is on maternity leave.

For her part, Kaski has clearly communicated the SV's priorities in September.

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"I am most concerned that we prioritize what we believe are the biggest challenges of our time, namely, fighting inequality, fighting increasing poverty, and fighting climate change," she told the newspaper Dagbladet last month.

She also warned that the SV would make tough demands and insist that no cuts be made to welfare in the 2023 budget.

"It is not welfare that is driving up inflation in Norway. It's investments in oil and gas," she said.

Finding common ground

Finance Minister Trygve Slagsvold Vedum of the Centre Party has already voiced his openness to working with the SV on a solution.

"The SV can come up with its proposals, and then, we can put forward our proposals. After that, there will be discussions in the Storting, but you always land on a solution in the end," he told the news bureau NTB on Thursday.

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However, the SV will likely have to make concessions, as both Vedum and Prime Minister Jonas Gahr Støre have repeatedly warned that this budget will be "tight."

As they pointed out on several occasions, "many (people) will be disappointed," and the government plans to insist on "responsible economic policy" and "reduced use of oil money."

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Robin-Ivan Capar 2022/10/07 09:37

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