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What you need to Know about the upcoming Norwegian elections

The general elections in Norway on September 8 and 9 are expected to be close between the centre-left block led by the Labour Party and the centre-right group dominated by Progress Party populists and centre-right Conservatives.

Inequality and taxation are two of the key issues that may decide the outcome. The result could also have an impact on the energy and power supply to Europe, as well as the management and control of Norway's massive sovereign fund.

What's at Stake?

Labour, led by Prime Minister Jonas Gahr Stoere, is seeking to extend its reign after returning to power 2021. This follows eight years of Conservative governments. Labour is leading a minority coalition, which includes the Socialist Left Party and the rural Centre Party.

According to a survey conducted by Respons Analyse on August 7-13 for the daily Aftenposten (in Norwegian), inequality is now voters' top concern, surpassing national security and defence, which have fallen to sixth place from a similar poll taken in April.

Food prices have risen by 5.9% over the past 12 months, putting pressure on the pocketbook and cost of living.

According to the survey, voters also prioritized jobs, taxes, and the economy.

Some of Labour's allies want to raise taxes on the wealthy in order to fund tax cuts for families with low income and public services.

Both Progress and Conservatives advocate for large tax reductions.

SOVEREIGN LAND FUND

Norway's wealth fund of $2 trillion, built from vast oil and natural gas revenues, allows it to spend more freely than other European countries. However, the need to control interest rates and inflation is a constraining factor. The debate about investments in Israel was at the forefront of the campaign and sparked an unusually open debate on how the world's biggest sovereign fund works.

Last week, the Socialist Left said that it would support a future Labour Government only if they divested themselves from companies involved in "Israel's illegal war in Gaza". Labour rejected this demand but it could be hard to reject such demands after the election.

OIL AND GAS

Norway has replaced Gazprom as Europe's largest gas supplier after the Russian invasion of Ukraine in 2022.

The European Union is planning to phase out the use of Russian gas in 2027. However, it is crucial to exploit new oil and gas resources to reduce production decline.

Depending on the influence of the Greens, Liberals, and other smaller parties, the election may decide whether Norway opens up new areas for oil exploration or if it restricts the companies to the existing ones.

It is unlikely that radical proposals such as stopping exploration altogether will receive enough support.

Norway exports its surplus power to Europe. Some left-wing and rights-wing parties continue to campaign on the issue of limiting exports.

This would cause problems for both the neighbours of Norway and Brussels. Norway may not be a member of the EU, but it is a part of the Single European Market and must follow its rules. Restriction of power exports would be a breach.

The parties are divided on how to meet the growing domestic demand, which is eroding Norway’s surplus. In recent years, little capacity has been added for generation.

Solar, wind on land and new hydropower are quick and cheap to build but they face local protests because of their environmental impact. Due to its high cost, offshore wind is controversial.

How does it work?

Norway uses a proportional system where 169 legislators are elected for four years from 19 geographic districts.

A party that receives more than 4% of the vote nationwide will be guaranteed representation. However, a strong showing within a district can also result in one or two seats.

A coalition or continued minority rule by Labour are likely outcomes.

Nine parties are predicted to gain seats, according to polls. On the left are Labour, the Socialists and the Greens.

Labour's Stoere will remain in power if the centre-left party wins. If it is centre-right, either Progress Party leader Sylvi Listehaug, or Conservative Party chief Erna Solberg, could become Prime Minister.

Results

The voting ends on 8 September at 1900 GMT when the first exit surveys are expected.

The results could be revealed late in the evening, but the final result may not be known till the next day.

Negotiations after the election will determine which parties form the cabinet.

(source: Reuters)