Brief | Norway’s Centre-Left Holds Power as Populist Right Surges
- Leonardo Fresa
- 41 minutes ago
- 6 min read
Jonas Gahr Støre secures another term with a slim majority, while the Progress Party posts its best result on record.
Norwegians went to the polls on Monday, 8th of September after what has been a fairly crazy couple of months in Norwegian politics. Norway is one of those countries international politics tends to overlook, aside from a feel-good story on European energy security or its well-functioning sovereign wealth fund. Yet precisely for these reasons, it is a country worth closer study.
Norway is a constitutional monarchy, where the Royal Family is symbolic and the real power lies in the Storting, the Norwegian parliament. The Storting is a unicameral parliament, meaning it has one chamber; as opposed to the US system with the House of Representatives and the Senate, for example. Aside from the national parliament, Norway is divided up into two levels of local government: the counties and the municipalities.Elections are held every two years, alternating between the local and national governments. The latest National Elections were held on the 8th of September to fill the 169 parliamentary seats of the Storting. National elections in Norway use a proportional representative system; with the country being split into counties, each with a certain number of representatives. A party is eligible to send representatives to the Storting only if it surpasses a national vote threshold of 4%, barring notable exceptions.
These rules set the stage for one of the most dramatic elections Norway has seen in decades. The campaign was dominated by heated debates over wealth taxes, the future of the sovereign wealth fund, and Norway’s role as Europe’s energy supplier. Against this backdrop, voters went to the polls and delivered a result that both reaffirmed Labour’s grip on power and reshaped the balance on the political right.
Norway’s Prime Minister Jonas Gahr Støre declared victory in a close election where his Labour Party appealed to voters’ concerns about taxation and welfare policy. Labour and its center-left allies secured 87 seats in the 169-member Storting — just over the majority threshold — in an election that drew the highest turnout since 1989 at 78.9%.
“In uncertain times, we’ve shown that we can deal with the challenges,” the prime minister told his cheering supporters in Oslo, pledging to start negotiations with all parties in the center-left bloc. “What our friends out in the world can look at and say is that it’s possible for the Social Democrats to win elections, even in a time where the right-wing powers are strong.”
On the opposite side, the Progress Party — a populist, anti-immigration force led by Sylvi Listhaug — achieved its best performance ever, winning roughly 24% of the vote. This surge came largely at the expense of the Conservatives (Høyre), who fell below 15% in their worst showing in two decades. The shift solidified a realignment on the Norwegian right, with Progress overtaking the traditional conservatives as the main opposition force.
The campaign was dominated by debates over the wealth tax and other levies, with Labour defending them as vital for equity and public services, while business groups and the right-wing opposition claimed that they were stifling entrepreneurship and economic growth.
Listhaug built her campaign on promises to cut taxes, scale back public spending, and end subsidies for green initiatives. In contrast, Støre presented himself as a steady hand in turbulent times, stressing the need for social protection as Norway faces both economic uncertainty and geopolitical pressures abroad.
The backdrop of international instability was never far away. Norway, a NATO member bordering Russia, is under pressure to boost defence spending. Tensions with the United States under President Donald Trump also played a subtle role in the campaign, reinforcing Labour’s message as a “safe pair of hands”.
About a year ago, Støre, 65, looked to be heading for opposition. Then, a sudden turnaround early this year reversed his prospects as his junior coalition partner, the Center Party, left his governing coalition. The return to government of former NATO head Jens Stoltenberg, a close friend of Støre, was a second stroke of fortune. In what became known as “Stoltenback” in local media, the twice-premier was appointed as the finance minister, with Labor’s backing jumping by a record margin in the span of a month.
Prime Minister Støre now faces the challenge of turning a narrow electoral victory into a workable governing arrangement. Despite winning back momentum for Labour, Støre has ruled out a formal coalition and instead plans to govern as a single-party minority government, dependent on issue-by-issue agreements with four smaller peers: the Socialist Left, the Red Party, the Greens, and the agrarian Centre Party. These groups, weakened after the election but still essential in parliament, now play the role of kingmakers.
Støre has signalled that Labour is open to concessions on taxation, with Finance Minister Jens Stoltenberg suggesting the government may amend the wealth tax, which has already prompted some wealthy Norwegians to move abroad. In addition, the prime minister has invited all parties — not just those on the left — to join in negotiating a new tax agreement and to cooperate on defence and support for Ukraine.
The most contentious issue, however, remains the sovereign wealth fund: established to invest Norway’s public money, it now manages about $2 trillion, equivalent to roughly $340,000 for every Norwegian citizen. After weeks of public uproar over its investments in Israel, the fund sold several stocks on the basis of “unacceptable risk” of violating the fund’s ethics code “in situations of war and conflict,” triggering accusations by the opposition of its politicization during an election campaign. The sell-off included companies such as the US based Caterpillar Inc.; sparking tensions with Washington, who threatened repercussions. Yet the Socialist Left, Greens, and Red Party are demanding further withdrawals, making this a likely condition for their parliamentary support.
Another looming battle concerns oil and gas policy. Norway provides about a third of Europe’s natural gas, becoming the region’s biggest supplier after Russian deliveries sank following the invasion of Ukraine. Most of Norway’s oil and gas still comes from mature areas in the North Sea, but most of the country’s untapped reserves are in the Barents Sea, above the Arctic Circle.
Norway is a “leading energy nation, important for Europe”, Støre said. “We will continue to be a reliable partner, but also to take forward technological shifts, cut emissions and live up to our climate obligations.” While total production from the Norwegian shelf peaked in the early 2000s, monthly oil output recently jumped to the highest in more than a decade following the ramp-up of the Johan Castberg field in the Barents Sea. Companies including Equinor ASA and Aker BP ASA are pouring billions into infrastructure aimed at squeezing out more barrels.
The Green Party, which has traditionally demanded an end to oil exploration in the North Sea, pulled off its best result, more than doubling its seats to seven. However, its leader Arild Hermstad said he plans to cooperate with Støre in negotiations to get policies through parliament; which could mean a compromise in the party’s traditional stance.
Beyond domestic quarrels, Støre stressed continuity in Norway’s role abroad. He reaffirmed commitments to prudent fiscal policy, maintaining ties to NATO, and preserving Norway’s status in the European Economic Area (EEA). However, his left-leaning allies strongly oppose any move toward EU membership, leaving foreign policy another potential flashpoint.
For investors and voters alike, the coming term promises four years of political haggling. Analysts at DNB Carnegie noted that greater use of sovereign wealth fund returns “will probably be part of the solution to achieve compromises” in parliament, signalling that fiscal flexibility may smooth over ideological divides.
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