Exit polls give Norway's PM tight victory

Norway's left-of-centre government was on course for re-election on Monday night in a victory that would reaffirm the country's commitment to its cradle-to-grave welfare system in defiance of opposition calls for lower taxes.

With more than 98 per cent of the vote counted, the ruling coalition was projected to clinch a narrow majority after a campaign dominated by debate over how to use Norway's oil riches and improve public services.

It would mark the first time in 16 years that a Norwegian government had won re-election and bring a halt to a series of victories by centre-right parties in Scandinavia and the rest of Europe in recent years.

"It is the first time in a long time that a social democratic government has won an election in Europe," said Jonas Gahr Store, Norway's foreign minister.

He said the projected result would cement Norway's commitment to international engagement, including efforts to forge a climate change agreement at the Copenhagen summit in December, and strengthen "very close ties" with the European Union.

But the government was unlikely to make a "big push" to revive debate over joining the EU "in the short term", he added. Norway has twice voted No in referendums on accession.

Victory would hand a second term to Jens Stoltenberg, prime minister, who claimed credit during the campaign for leading Norway towards a swift recovery from its first recession in two decades. His government insulated the economy from the worst of the global downturn by tapping deeper into the country's oil wealth, keeping unemployment among the lowest in Europe at 3 per cent.

Marit Nybakk, member of parliament for the Labour party, the dominant force within the governing coalition, said Norway had delivered a vote of confidence in Nordic-style social welfare and rewarded its economic competence. "They have seen that a social democratic government can get the country through a financial crisis," he added.

Norway is the only country in Scandinavia currently ruled by a left-of-centre government, and opposition parties had been hopeful of emulating the centre-right victories in Denmark, Sweden and Finland of recent years.

Right-of-centre parties promised tax cuts and greater private enterprise in a country with one of the highest tax burdens and most expansive public sectors in Europe. Both main opposition groups made gains but fell narrowly short of a majority.

Official projections showed the ruling coalition on course for an 86 to 83 margin of victory.

Liv Westerby, a retired ship steward from Oslo, was among those who had hoped for a change of government. "I'm tired of all the taxes and feel that we send too much money outside the country rather than spending it on schools and hospitals and old people here," she said.

Tonje Skjeie, a law student, voted for Mr Stoltenberg's Labour party. "There's quite a few things the opposition parties say that I agree with but it's a lot about instinct and I consider myself a social democrat," she said.

Much of the campaign revolved around how much oil money should be pumped into the economy and how much saved. While the government has raised spending, it is committed to strict limits on use of a $400bn oil fund. The opposition Progress party wanted to use it to lower taxes and pay for a massive public works programme.

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