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Country Commercial Guides FY 2000: Norway Report prepared by U.S. Embassy Oslo, released July 1999 Note*

CHAPTER III. POLITICAL ENVIRONMENT

Norway is a constitutional hereditary monarchy. The parliament (Storting) is the main political body and holds legislative power. The prime minister is selected on the basis of the political make-up of parliament, but is formally appointed by the king. The PM chooses his own cabinet, currently there are 18 ministers. All 165 members of parliament are selected by proportional representation during elections held every four years in mid September. Interim elections cannot be called. The last election was held in September 1997.

Currently a three party centrist coalition government is in office in Norway. This government took office in October 1997 when the ruling Labor Party government decided to step down as a consequence of the election result. Mr. Kjell Magne Bondevik from the Christian Democratic Party holds the Prime Minister position. The coalition government consists of the Christian Democrats, the Liberal Party and the Center Party and is a minority government which only controls 42 seats in the 165 seat parliament. The centrist government aims to seek support from the left and the right hand side of the political spectrum. However, the government has relied on the parliamentary backing of the right-of-center political parties in the budget negotiations because the largest opposition party, the Labor Party, has maintained a uncompromising opposition policy. The fact that the government does not have a parliamentary majority has ensured a middle-of-the road political course much along the lines of previous Norwegian governments.

In a November 1994 referendum, Norwegians rejected European Union (EU) membership because the net benefit of joining appeared dubious considering Norway's petroleum wealth and strong ties with the EU through the European Economic Area (EEA) accord. Norway's economic policy continues to be shaped by EU directives adopted by the EEA. Under the provisions of the EEA accord, Norway is obliged to offer national treatment to EEA members in many areas including finance and public procurement, but not agricultural trade and fishing.