Norway’s Economy: The Spirit is Willing

ERNA SOLBERG, Norway’s conservative prime minister, is nothing if not ambitious. After defeating her popular Social Democratic rival, Jens Stoltenberg, in a general election in September, she beat the odds to cobble together a minority coalition at the end of that month. On November 15th she successfully negotiated an agreement on the budget for 2014.Now she says she wants to wean Norway off its dependence on oil revenue and ease it towards a more balanced economy in which budget shortfalls are not plugged by the wealth flowing from the North Sea. It will be no easy task. The gap between Ms Solberg’s ambitions and actions was highlighted in the budget deal, which saw her depend a bit more on the country’s oil coffers than originally proposed—an extra 3.9 billion kroner ($ 640m).Feisty rhetoric aside, “Iron Erna” is in a rather fragile position. Her intention to form a four-party majority coalition was foiled when the Christian Democrats and the Liberals balked at a formal alliance with her far-right partner, the Progress Party. The two small centrist parties did support her bid for prime minister in September, to keep the Social Democrats from power. But their informal alliance came under strain in recent weeks as the two bigger and the two smaller parties tried to hammer out a budget.Negotiations stuttered along for days and almost collapsed before the government eventually…

The Economist: Europe