Minister of Foreign Affairs Mr Jonas Gahr Støre

The enlarging EU – challenges and opportunities for Norway

Europe Conference, Oslo 2 February 2006

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Translation from Norwegian

Ladies and gentlemen,

The EU is expanding. In one of his best-known poems, Gobelin Europa, the Norwegian poet Stein Mehren describes Europe as a gobelin tapestry. The poem was originally written in 1965, but new lines have been added – several times. It is quite dark and pessimistic, but a tapestry is made up of many different colours, shades and patterns, and I think his image is a good one.

In its policy platform, Norway’s new coalition government identified European policy as one of its main foreign policy priorities. We will pursue a more proactive European policy.

The main point I want to make today is that the Government wants Norway to play an active part in efforts to develop an inclusive and secure society in Europe. This is in our own interests too.

We are not part of the EU and will not join the Union during our term of office. But we will cooperate, make the most of common opportunities, take our share of our continent’s responsibilities, safeguard our own interests and demonstrate our commitment to the common good, solidarity and joint responsibility.

I am particularly pleased that Commissioner Olli Rehn and Polish Minister for Regional Development Grażyna Gęsicka were able to be here today. They both play key roles in the new Europe: Mr Rehn as Commissioner for Enlargement and Ms Gęsicka as a representative of one of the largest, most influential countries in the new EU – Poland – our ally in NATO and our partner in so many other areas.

The EU is important for Norway and for Norwegians. Here we have close allies, neighbours and long-standing friends. Here we have our most important economic partners. The EU is a meeting place for politicians, researchers, the business community, artists and students. We share a common culture. And history shows that we also have a common destiny. We are all part of a rich and varied tapestry.

The Government has said that it will pursue a proactive European policy. What does this mean?

A proactive European policy involves seizing opportunities in Europe. It involves ensuring that we can exert influence and do so in areas that are important to us. It involves setting priorities and putting forward clear policy aims. By taking action we will win credibility.

A proactive European policy involves awareness-raising and greater efforts here in Norway. It involves greater openness, more dialogue and active debate. We must make use of the experience and knowledge to be found throughout Norway – and that I can see is well-represented here today.

A proactive European policy also involves shifting our perspective and focus. We must not allow ourselves to get stuck in the yes/no rut from 1972 and 1994, when Norway was engaged in a heated debate on whether or not to join the EU. This must not be the only frame for all discussions on Europe. Now we must look ahead to the future with an open mind. The debate must continue – democracy is designed to encourage such debate. But in our day-to-day work we must look together at the choices we have, what is in our best interests, and how we can make the best possible contribution.

We should look for opportunities rather than just focusing on the problems in our relations with the EU. The EU affects every part of our society, and every part of our society should be aware of its importance.

We will cooperate closely with the EU on the basis of existing agreements. We have the EEA Agreement and the Schengen agreement. We cooperate on foreign and security policy. We cooperate in the fields of research, culture and the environment. We play an active part in NATO, the OSCE and the Council of Europe.

We are not interested in pursuing a proactive European policy just for the sake of cooperation, but because we have a vision for the way Norway should develop and for Norway’s role in Europe.

Today I would particularly like to talk about two main political priorities for Norway in the enlarged EU:

The first is how we can help to develop an inclusive society in Europe.

The second relates to the need for responsible management of natural resources, both fish and energy, and our policy on the High North is highly relevant here.

These two priorities are closely linked. I would like to begin by giving you a brief account of developments in the EU as Norway sees them.

The latest EU enlargement has changed the face of Europe. In a short space of time, the Union has grown from 15 to 25 members. And more countries are in the queue to join. Both this and previous enlargement processes have promoted the growth of democracy and human rights and helped to make Europe a more stable place.

Enlargement has widened the social and economic disparities in the EU. Social differences that have arisen over many years will not disappear overnight. Promoting social and economic cohesion within the EU will be a long-term endeavour. At the same time, immigrants to Europe must be dealt with fairly and humanely. It is in our own interests to reduce the disparities within Europe. Norway has already made contributions in this respect, both in the form of welfare models and in the form of financial contributions through the EEA financial mechanisms.

The EU has become a more important player in the international arena and often speaks with a single voice. This can be seen in its dealing with the WTO, NATO, and a number of other international organisations. Norway has similar views to the EU and its member states on many issues, but in other cases our views differ. We will work together with the EU where this is appropriate. But we will also take a clear stand where our interests and views diverge from those of the EU countries.

The pace of change in Europe in recent history has been extremely high. I would like to remind you that when the EFTA countries were negotiating with the EC in the late 1980s, we were told that membership was not an option at the time. This was because the EC was fully engaged in preparing the single market, and therefore did not have the capacity to consider further enlargement. The enlargement that is now taking place is far more extensive and involves far greater economic and cultural differences.

It is therefore not surprising that there is a certain amount of fatigue and frustration in connection with further developments in the EU. Weak economic growth and high unemployment levels in the EU have given rise to public dissatisfaction and protest. Now that there are more voices round the table, it is harder to reach agreement on principles and rules for governance, as we have seen in the efforts to draw up a constitutional treaty. But there have been crises as long as the EU has existed, and they have often given momentum to the process.

It is important for Norway that things go well for the EU. This includes economic growth, effective ways of fighting unemployment, and an efficient system of governance that has widespread public support. This is important for stability in Europe, and it is important for Norwegian companies and jobs, because the EU is our most important market.

I would like to make a general comment at this point. In the world today, we are all dependent on one another. Cooperation will be vital if we are to deal with the challenges connected to climate change and environmental policy, poverty reduction and human trafficking. We have to have common rules. These rules must be understood, respected and obeyed.

It is thus a paradox that at a time when we need common rules more than ever before, we are seeing growing protests against the bodies that are responsible for drawing up these rules. This is happening in the EU, in the WTO and, in some countries, in relation to the UN.

As Norway has chosen to remain outside the EU, I believe we should be realistic about the extent to which we should be commenting on the EU’s own development. Gro Harlem Brundtland once opened a speech in Brussels by saying that asking a Norwegian prime minister to speak about the EU’s development could be compared to asking Genghis Khan to speak about peaceful coexistence.

But it is a fact that there is ongoing debate within the EU – on making EU cooperation relevant and meaningful for people’s everyday lives, on how the EU institutions function, on how to find the balance between widening and deepening of the Union. I meet colleagues from the original EC countries who claim the EU today does not inspire people; they do not feel that it is important to their lives, their hopes and dreams for the future.

When such fundamental questions are raised, it is easy to overlook the achievements that have in fact been made and the results that EU cooperation is producing in almost all sectors of society. This debate is an inevitable part of the process that the EU is in at present, searching for its future form and direction.

We should take note of this. Because this may be a good opportunity for us to cooperate, put forward proposals and ideas, and reach common goals in the very areas that are important for people’s day-to-day lives, such as the whole breadth of the energy sector.

I believe that one of the strengths of our High North policy is that is brings Norwegian foreign policy closer back home. The same can be said of our European policy.

For example, EU rules affect rural Norway, the working lives of Norwegians, and the business environment.

The Government is currently drawing up an action plan that will enable us to implement a proactive European policy. This must reflect the experience we have gained and will be tailored to the enlarged EU, which is itself facing considerable political, social and economic challenges.

The action plan will stress the need for clear and timely political priorities. We must not try to cover everything. We must coordinate our efforts. We must make the best possible use of the opportunities we have to exert an influence. We must be better at recognising that issues are interrelated. We must take a constructive approach to our obligations.

It is crucially important for us to be involved at an early stage in decision-making processes where we have clear interests. But we do not need to be equally involved in all processes or have representatives in every one of the more than 400 working groups and committees we are entitled to be part of. We often have common interests with the EU, and EU policy is a good fit for Norway as well. But we do have to be ambitious.

The management of Norway’s affairs with Europe is good in many ways, but there is also room for improvement. A proactive European policy will have to be based on openness, knowledge and public participation. We must all pull together.

The Government is also engaged in a dialogue with the Storting to ensure that the people’s elected representatives are involved in our European policy. This will provide a better basis for debate at an earlier stage, so that the whole political spectrum can be heard before we try to use our influence vis-à-vis Europe.

We must ensure that Norway has an open and inclusive debate on Europe, with broad participation. In my view, the starting point for this should be Norway’s place in a social Europe.

Knowledge is fundamental for the success of our European policy. We intend to step up efforts to provide information and improve people’s understanding and knowledge of the EU and how it works. These efforts will also include the public administration. We have already started an ‘adult education project’, which involves among other things sending all the state secretaries to Brussels in the near future. This will be followed by other projects and schemes.

We need to increase the general level of knowledge about the EU and strengthen education and research in this field. We will improve the reporting and publication of information on EU issues and ensure greater transparency. We also want to establish dialogue and cooperation with regional and local authorities, the social partners, various organisations and movements, researchers, and other relevant groups. These have expertise and useful networks. They often know where there are problems and where we can make improvements.

The action plan will be presented in a few weeks’ time. We are now involved in an extensive dialogue with interest groups and experts who can help us to develop good management of our European policy. We have had talks with the social partners, interest groups and research centres, and next week will be having talks with regional and local authorities. We are grateful for the input and the many suggestions we have received. We also appreciate suggestions and input from other ministries and analyses from the Office of the Auditor General and others.

I would like to emphasise that the action plan is only the beginning of the process, not the end. We mustn’t get into a rut at this stage. We must constantly be on the look out for the best ways to promote our political priorities in a changing Europe.

Ladies and gentlemen,

Norway’s primary goal for its European policy is to promote the development of an inclusive and peaceful society in Europe.

This means that we will be the friend of our friends. We will stand shoulder to shoulder with our friends in Europe. We can then expect their friendship in return, and we are dependent on this. We will support the Nordic social model, which is built on a strong sense of community, social partners that show social responsibility and systems of redistribution that ensure equal opportunities for all and make it clear that everyone is equally valued.

The enlargement of the EU is a major step. The new member countries have already done a great deal in a short space of time to develop their systems and make necessary adjustments. And this work is continuing.

Norway has supported the enlargement. We admire the resolve shown by the EU and its member countries in taking on such a major task and such great responsibility. The new EU financial perspective makes it possible to provide considerable financial assistance and real opportunities for development in the new member countries. This is a positive development and absolutely necessary.

We see that redistribution is taking place not only within borders but also across borders. Norway is taking its share of this responsibility. We are contributing approximately NOK 9 billion over a five-year period through the EEA Financial Mechanisms - approximately NOK 9 billion for development projects in the new EEA member countries.

This financial support will promote economic growth, democratic reform processes and the reduction of social disparities. It will also help the new member countries to meet their commitments, improve their environmental performance and strengthen civil society.

Poland is particularly important in this connection. The country receives around half of the funding available. Agreement has been reached on the establishment of a Norwegian-Polish research programme, a scholarship and training fund, a seed money fund and an NGO fund. The NGO fund will be the largest in Poland. We are delighted that Poland has also contributed to it.

The deadline for the first call for proposals was two months ago. Great interest was shown, and nearly 1400 applications were submitted.

The financial mechanisms are also helping to strengthen bilateral relations between Norway and the new member states. We are making it possible for broad range of Norwegian actors to take part in schemes and activities under the mechanisms both in Poland and in other countries.

However we cannot promote an inclusive society in Europe through allocations and grants alone. Experience from earlier enlargement processes shows the importance of investment and trade. The fact that more people are moving to new places for shorter or longer periods means that new contacts are constantly being established and new friendships forged. Cultural ties are developed and strengthened through opportunities to meet. It is positive that Norwegian trade and investment are being developed in the new member countries. It is also positive that Norwegian artists are seizing the opportunities that are available through EU programmes, and that support for translation is bringing other people’s histories and narratives to us.

For nearly two years, there has been a migration of labour from the new member countries to Norway. The transitional rules for free movement of people have worked well. We have benefited from the additional labour that has come into the country during a period of high activity. Like many of the EU countries, we will be re-evaluating the transitional rules this spring. However the flow of people has not been all one way. More than 500 Norwegians are now studying in Poland; many of these are medical students.

Before the summer, it will be clear whether Bulgaria and Romania will become EU members in January 2007 or will have to wait until 2008. New EU members are also obliged to apply to join the EEA Agreement. So that the single market can function as smoothly as possible, it is important to ensure that the two enlargement processes take place in parallel. This means that negotiations on EEA enlargement will be an important issue for the Government in the time ahead.

There are still many tensions in Europe. The Western Balkans are still showing signs of instability and the potential for conflict is great. I know that this region is high on Commissioner Rehn’s agenda, and that it is less than a week since he presented the Commission’s Communication on the Western Balkans.

I believe that the EU is playing a historic role here. Adaptation to European standards is important for further development in the region. This will lead to greater stability. Norway is providing substantial resources for the countries in this region and is supporting their integration into the Euroatlantic community.

Cooperation projects in the region also promote stability. Last year, the EU signed the Energy Community Treaty with countries in South East Europe, which covers natural gas and electricity. Norway took part as an observer in the process, and we are negotiating on Norwegian participation with a view to accession when the treaty comes into force – probably before the summer. We have expertise that will be valuable in the development of this region and of the integrated European energy market.

The enlargement of the EU also raises important questions here at home. The EU and the EEA affect the framework conditions for production and the labour market throughout the country. We must prevent social dumping and pressure on wages and conditions of employment. This is currently the subject of debate throughout the EU, and Norway will take part. We will strive to protect some of the core values of our society: social inclusion, security and proper protection in the workplace.

The Nordic countries have succeeded in combining economic efficiency in a globalised economy with social inclusion and protection of the individual. Although there are differences between the individual Nordic countries, this approach is often referred to as the Nordic model. It is based on a balance of power between the state, the market and civil society.

More and more people are now looking to the Nordic countries. President Barroso recently noted that the Nordic economic model has made most progress towards the goals for economic reform. All the Nordic countries have high scores on the Lisbon Indicators.

We have succeeded because we trust each other and are able to understand and take account of each other’s interests. Because we have a shared goal of providing equal opportunities for everyone. Because we have a tax system that redistributes wealth. Because we have an active public sector. The social partners have played a constructive role. Their cooperation has created social capital that we can continue to build upon. And we have also demonstrated that this model is economically viable.

The Nordic model has sometimes been criticised. But both experience and research have shown that social security, good services and a well-functioning labour market enhance creativity and the willingness and the ability to accept change, rather than the opposite. Commissioner Rehn knows this subject well; he wrote his doctoral thesis at Oxford on the importance of cooperation in small states in global markets.

We now find there is growing interest in the EU for what are being called “Nordic” solutions, such as the way we combine a flexible labour market with individual security. This is one of the main priorities of the Austrian presidency of the EU. We have no hesitation in promoting our model. Together with the trade union movement and other interested parties, we should draw up a strategy for promoting, as widely as possible, the standards and rules that we believe should govern the labour market.

However it is also important that we remain open-minded. The ability to learn from others’ experience has been vital for the success of the Nordic model. Meeting places where states come together to exchange experience are potential sources of renewal. A proactive European policy will inevitably also involve a process of change and renewal at home.

Here I would like to highlight two particularly relevant issues:

The first is the Services Directive. Most of you will be familiar with this important matter. The directive has not yet been adopted, and is being discussed by all the member states. The European Parliament will deal with the matter in February. It is hoped that the directive can be adopted in the early summer or during the Finnish presidency in the autumn. The directive is EEA-relevant, and formal procedures in the EEA will start once it has been adopted by the EU.

Our policy is clear and unambiguous. We believe it is essential to prevent social dumping. National standards must be kept intact. And effective control mechanisms must be in place. The Norwegian services market is already an open one. The Services Directive will therefore give Norwegian service providers new opportunities as the markets in other countries are opened up. We are following the process in the EU closely and will present our position in detail by 8 February.

The second issue I would like to highlight is the proposed reintroduction of differentiated employers’ social security contributions. This is a simple, effective tool in regional development policy. The Commission has now changed its guidelines for regional aid. This means that an important goal has been reached. The new guidelines will make it possible to reintroduce differentiated employers’ social security contributions for the three northernmost counties and parts of Nord-Trøndelag. Parts of the rest of the country will also be entitled to reintroduce a system of reduced employers’ social security contributions.

These examples clearly illustrate the importance of a proactive European policy. We must grasp the opportunities, make use of our expertise and take coordinated action.

Ladies and gentlemen,

Finally, let us turn our attention to the High North. I have spent a lot of time on this issue already, including writing articles in the press and giving speeches both at home and abroad. I will not repeat all of this today, but I would like to highlight the close links between our High-North policy and our European policy.

The Barents Sea is rich in fish and petroleum which can be used to supply Europe. But we are also facing major climate and environmental problems. The Artic environment is vulnerable, and there are large quantities of nuclear waste to be dealt with. Unsound management of the region may have wide-ranging consequences for the whole of Europe.

We intend to focus on the opportunities in the High North – for harvesting fish stocks and developing energy resources, for economic growth, for tourism, research and cultural activities and for expanding cooperation with Russia. We also intend to focus on responsibilities – the responsibility Norway as a coastal state has for ensuring sound resource management and order in the High North.

Our relations with our neighbour and partner, Russia, are developing, mainly in a positive direction. But there have also been setbacks, such as the Russian ban on imports of Norwegian salmon. And while we must keep our eyes open for opportunities for cooperation in this new era, we must also remember that democratic traditions are not yet deeply rooted in Russia.

The EU and the US are also developing their relations with Russia. This also opens up new opportunities. We will make use of our own experience and unique position to take active part in the dialogues that have now been started.

We have been cooperating on fisheries management for many years with both Russia and the EU. This cooperation must be expanded. If we fail to manage fish stocks sustainably the fishing grounds will be empty in only a few years’ time. We will strive to prevent overfishing and sales of illegally caught fish and to ensure sound management of the fish stocks.

The EU is much the largest export market for Norway’s fish, but we have repeatedly found that the framework for our exports to the EU is not good enough. For many years, we have had to put up with restrictions or threats of restrictions on our salmon exports to the EU. Just two weeks ago, the EU decided to impose antidumping measures on Norwegian salmon. In our opinion, there is no basis in the WTO rules for this decision. We have therefore decided that we will if necessary take the matter up in the WTO. However, we will not do so until we have tried every possible approach to find an amicable solution. Our goal is to ensure a stable framework for the Norwegian fish farming industry.

Both in Norway and in the rest of Europe, the greatest challenge is perhaps to change people’s way of looking at the world – to redraw the map, as it were. It is by no means certain that our European partners understand what we mean by the Norwegian word “nordområdene” – the High North, or “le Grand Nord”.

The fact that the EU does not yet have an established policy for the High North opens up opportunities for us. Not all the answers have been found. This give room for thought and room for action. One of our most important tasks is to link our High North policy to EU policy on energy, fisheries, shipping, research, and cultural affairs and the EU’s relations with Russia.

Just at the moment, it is easy to gain attention for energy issues. Energy policy and security of energy supplies are at the top of the EU’s agenda. We are engaged in a close energy policy dialogue with the EU. Our views are taken seriously because we are predictable and a major supplier. Almost a quarter of the natural gas consumed in the EU in 2003 was from Norway. Rising gas production means that we are becoming even more closely linked to the rest of Europe, with new pipelines providing physical links. By replacing coal, Norwegian natural gas also makes an important contribution to a more environmentally friendly energy mix in Europe.

We welcome the fact that Norway has been invited to join with Russia in a strategic energy partnership in the north. If Norwegian companies take part in commercial developments on the Russian continental shelf, this will strengthen cooperation between our two countries. Two Norwegian companies, Statoil and Hydro, are among the five companies in the final stage of negotiations before the Russians choose their partners for development of the Shtokman field. The Norwegian authorities are supporting these two companies, and I will discuss this during my visit to Russia in two weeks’ time.

So far I have discussed resources in the sea and below the seabed. But sound management in the High North also means that we must set high safety standards for shipping. The use of technology to liquefy natural gas makes it possible to transport gas from the High North by tanker. The Government is therefore engaged in a close dialogue with the EU as it draws up an all-embracing maritime policy. We are an interesting partner for the EU in this dialogue because we are clear, we are competent and we are quick to grasp opportunities.

Knowledge is vital. We need knowledge to promote our interests. We need cooperation to build up our knowledge. This is why we have launched the research and development initiative Barents 2020 to identify knowledge gaps. Our participation in EU research programmes means ties us closely to knowledge development in Europe.

And we have a contribution to make in this process. One example is last year’s award of the EU’s prestigious Descartes Prize for Research. One of the winners was a project run by a team including scientists affiliated with the University of Bergen. This project provided valuable information on the possible impacts of climate change on fisheries, energy extraction and transport in the High North.

Ladies and gentlemen,

Our High-North policy and our European policy are being woven together.

We are living in an era when the borders of the European Union are changing. New colours are being added to the tapestry. Old dividing lines are fading. New ties and friendships are developing. The fog is lifting in the High North, and the progress we are now making here is also linked to the changes further south in Europe.

I have described our two main political priorities: we will work towards an inclusive society in Europe, and we will seek to ensure responsible management of natural resources. These two priorities are closely linked. We are talking about managing resources: human and natural resources.

The overall goal of both these priorities is to make Europe more stable and equitable. We have a major responsibility for stewardship in line with our Nordic model for society and welfare. We also have a major responsibility for ensuring sound management of the natural resources in the High North.

We cannot carry out these tasks alone. We are dependent on cooperation and dialogue with our European friends and allies. We must pursue a proactive European policy. We must grasp opportunities. We must expand our knowledge. Greater openness and closer dialogue will make it possible for our policy to reflect all the colours and nuances in the tapestry.

If we are capable, if we are knowledgeable, and if we all pull together, we will succeed.

Thank you for your attention.