With a mandate from voters to reduce taxes and the reach of government, Norway's new Conservative prime minister Kaare Willoch takes office Tuesday at a time of uncertainty and change throughout Scandinavia.
After decades of postwar political consensus, steady economic growth and expanding government social programs, Scandinavia's wealthy welfare state societies are under strain. Willoch's performance will be watched closely as a test of whether his supply-side economics can help solve their problems of high taxes, increasing inflation, declining growth, rising unemployment, big bureaucracies and big budget deficits.
Willoch's minority Conservative government will replace the left-of-center Labor government of Prime Minister Gro Harlem Brundtland, which lost last month's national election. Pundits described the result as a "conservative wave" of mostly younger voters moving to the right in protest of high taxes and big government bureaucracy.
Willoch's Conservatives, who dramatically increased their representation in the 155-seat Norwegian parliament from 41 to 54, will have the silent backing of the religious Christian People's Party, with 15 seats, and the farmer-based Center Party, with 11. They did not join in what could have been an 80-seat coalition government because the Conservatives would not agree to a demand by the Christian People's Party that Norway's liberal abortion law be repealed.
This could make it more difficult for Willoch to achieve his goals of holding down government spending while reducing taxes and stimulating parts of the Norwegian economy that do not benefit from the country's considerable North Sea oil revenues. Willoch already has said that change would be gradual.
He also has emphasized that he aims only to bring under control rather than dismantle the generous welfare-state social programs built up by the Labor Party in Norway.
"Norwegians are not tired of the welfare state," Willoch told the record number of foreign reporters who went to Oslo for last month's election. "But they know you cannot pay for a welfare state without economic growth, and you cannot have economic growth with taxes as high as ours."
The increasingly painful pinch of high taxes has helped increase voter support significantly for conservative parties in Norway, Sweden, Denmark and Finland in elections and opinion polls in recent years. But much of the conservatives' new support has come from fading centrist parties, leaving the social democratic parties still the largest in all four countries.
This means the conservatives must produce results or they soon will be replaced, according to Scandinavian politicians and analysts. "Those young voters who switched to the Conservatives will be frustrated and turned off if taxes, for example, are not cut as they expect," Henry Valen, a leading Norwegian political and public opinion analyst, warned in Oslo.
In neighboring Sweden, a shifting government coalition of right-of-center parties so far has failed during the last five years to reduce government spending or taxes. It has now fallen far behind the opposition Social Democrats in opinion polls with a national election due next year. Prime Minister Thorbjorn Falldin of Sweden's agrarian Center Party recently announced a package of more drastic steps to improve the nation's economy before the election.
His government devalued the Swedish krona by 10 percent and proposed reductions in sales taxes and government spending. But critics have questioned whether the reductions in government spending are large enough to stop the runaway growth of the Swedish bureaucracy.
Swedish Social Democrats, led by former prime minister Olof Palme, contend that only they have the political base to administer sufficiently strong medicine to treat Sweden's economic ills, which have included declining growth, rising inflation and increasing deficits.
The minority Social Democratic government already has been doing this in nearby Denmark. It has curbed the growth of government spending by cutting some benefits, reduced its foreign borrowing, and forced Danes to accept a substantial reduction in their still comfortable standard of living.
But budget-trimming and setting high interest rates also have increased unemployment and depressed industries such as homebuilding. This has made Danish Prime Minister Anker Jorgensen unpopular with the Social Democrats' left wing and other left-of-center parties he relies on in the 11-party Danish parliament.
In Finland, similar political problems have confronted the efforts of Social Democratic Prime Minister Mauno Koivisto.