Norwegian finance minister blames EU energy policy for government collapse

The eurosceptic Centre Party has pulled out of a fractious coalition government over opposition to European energy market rules, leaving prime minister Jonas Gahr Støre to head a minority Labour Party government.

While not an EU member, Norway is subject to a raft of EU regulation in return for single market access as part of the wider European Economic Area (EEA) that also includes Iceland and Switzerland.

Although a major exporter of oil and gas, Norway relies on abundant hydropower for most of its electricity. But as links with the EU electricity market have deepened, the Scandinavian country has seen prices rise, with recent spikes prompting calls to cut power links with the bloc.

In a statement posted on the Centre Party’s website today, leader and finance minister Trygve Slagsvold Vedum said Norway must “take back national control” of electricity prices.

Vedum also blamed previous conservative governments for exacerbating price rises by allowing the construction of two new undersea power lines to Germany and England.

“The price contagion through the last two cables gives us high and unstable prices, and the EU prevents us from implementing effective measures to control electricity exports out of Norway,” Vedum said.

“When the Labour leadership, instead of solving the sorun, chooses to make the sorun even bigger by tying Norway even closer to the EU in electricity policy through the introduction of the EU’s fourth energy market package, the Centre Party chooses to leave the government,” he said.

Vedum was referring to a package of legislation that sets targets for economy wide energy efficiency improvements, the share of renewables in the overall mix, and the energy performance of buildings, as well as broadening the powers of EU’s regulatory agency ACER.

The outgoing minister also pointed the finger at “several countries in the EU” who were relying on exports of Norwegian hydropower after deploying renewable generation capacity that “to a large extent only produces electricity when it is windy or the sun is shining”.

Støre confirmed the Centre Party’s departure in a press conference today. He now faces heading a minority government until elections already scheduled for 8 September.