November 29, 2016 / 2:41 PM / 3 years ago

Norway's Liberals abandon budget talks, jeopardising government

Liberal Party leader Trine Skei Grande uses her mobile phone during a parliamentary hearing about the country's defence policy in Oslo, Norway August 24, 2016. NTB Scanpix/Vidar Ruud/via REUTERS

OSLO (Reuters) - Norway’s centrist Liberal Party broke off negotiations with the country’s ruling right-wing minority government over a 2017 fiscal budget, the party said on Tuesday, raising the risk that Prime Minister Erna Solberg could be forced to step down.

The governing coalition of the Conservatives and the Progress Party must now rely on another small party, the Christian Democrats, to back its plan, though they will wait until Wednesday to decide whether or not to continue negotiations, a party spokesman said.

In power since 2013, Solberg and Finance Minister Siv Jensen have relied on support from the centrist Liberals and Christian Democrats to cut taxes and raise spending to counter an economic downturn triggered by falling oil prices.

A key conflict in negotiations for the 2017 spending plan has been over petrol and diesel taxes, which the centrists want to raise sharply to help cut greenhouse gas emissions, while the government has only agreed to a small increase.

Without a budget deal, Solberg may ask parliament for a vote of confidence, a rarely used last-ditch measure to prevent a government collapse.

Early elections are not permitted under Norway’s constitution and the next vote is not due until September 2017. A government collapse could trigger a complex round of talks to determine whether or not the top opposition Labour Party should replace the current coalition.

Reporting by Terje Solsvik Editing by Stine Jacobsen; editing by Ralph Boulton

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