Biannual address to the Storting on important EU and EEA matters

Mr President, 

The financial crisis and its repercussions have compounded existing challenges and created new ones for the countries of Europe and for EU cooperation. I will therefore take this as my starting point in this address on important EU and EEA matters, as I did in my address here in this chamber in March.

In 2009, the EU countries saw a decline in GDP of 4%. This decline has hit the various countries to varying degrees, with the Baltic states being most severely affected. However, in a wider context, the downturn in the EU’s largest countries is more significant. Germany, the UK and Italy have all experienced a greater economic decline than the EU average.

Cooperation between the euro countries is now facing major challenges. The euro has meant that these countries have enjoyed a stable exchange rate and a relatively low interest rate for many years. This has stimulated investment. But it has also encouraged consumption-led, debt-based growth. And it has shown the challenges of having a common currency without having a common fiscal policy and greater movement of economic and labour resources between regions with different growth potential, as I discussed in more detail in my address in March.

Due to the euro, countries that in the past had volatile currencies have been spared the great burden of having a national currency that is under pressure. But is worth recalling that whatever currency and monetary policy model is chosen, sound macroeconomic governance is always essential for achieving balanced economic development. A number of countries are now having to refinance their national debt at high interest rates. High levels of debt and low levels of growth are an unfortunate combination, as they are mutually reinforcing. It is precisely this predicament that Greece is now in.

The sovereign debt crisis in Greece is grave and acute. It has been the greatest challenge to the cooperation between the euro countries so far, and it has rekindled uncertainty about financial stability in Europe. It was therefore encouraging that Greece last Sunday reached agreement with the International Monetary Fund (IMF), the European Commission and the European Central Bank on a proposal for a three-year programme aimed at stabilising Greece’s public finances and economy.

A package of loans totalling EUR 110 billion will be made available for Greece during the three-year period. Bilateral loan agreements with the euro countries will provide EUR 80 billion, and the IMF will provide the remaining EUR 30 billion. The stability programme is intended to ensure that Greece’s budget deficit is substantially reduced, and at the same time strengthen the competitiveness of the Greek economy. The programme includes measures such as significantly reducing public employees’ wages and pensions, while at the same time increasing taxes and raising the retirement age.

This is in other words no quick fix – neither for Greece nor for cooperation between the euro countries – but the measures are most likely absolutely necessary. Whether they will be enough only time will tell. The stability programme will have to be approved by the Greek Parliament and the Executive Board of the IMF, and the bilateral loan agreement will be considered by the relevant national parliaments. Intensive efforts are now being made to hammer out the necessary decision-making procedures so that Greece will be able to receive the first tranche in time to pay a large instalment on 19 May. An extraordinary meeting of heads of state and government of the countries of the eurozone is planned for Friday this week.

It is hoped that the rescue package will help to stabilise the situation in Greece and limit the ripple effects of the crisis in other countries. It is imperative, both for Greece itself and for financial stability in Europe, that Greece regains international confidence. In the time ahead, the EU will thoroughly consider how the cooperation between the euro countries can be improved. It is a cause of serious concern that the financial crisis has now become an employment and debt crisis.

Greece and several other EU countries that are feeling a budget squeeze are now being forced to tighten their fiscal policy at a time when unemployment is on the rise and there is in fact a need to stimulate demand. This could result in persistent high unemployment rates, increased political tension and further difficulties for cooperation between the euro countries in the time ahead. Developments in other vulnerable euro countries such as Spain, Portugal, Italy and Ireland are therefore also crucial.

In this shifting European economic landscape, where many of our closest partner countries are experiencing painful restructuring, the contrast to the situation here in Norway may seem stark. Nevertheless, these developments are also of great relevance to us, because we have to be prepared for the possibility that the economic, financial and political situation in Europe may take a dramatic turn. When European countries are hit by an economic crisis, we are speaking of Norway’s closest allies and economic partners. For instance, 80% of our exports are to the EU. If growth in our common EEA market is weak, the Norwegian economy is also affected, even if the fundamental economic situation in Norway is sound.

The European response to the challenges posed by the financial crisis is therefore also of direct concern to us. We are following with interest the European Commission’s proposed comprehensive new strategy for jobs and growth, Europe 2020, which was generally endorsed at the meeting of the European Council in March. A number of aspects of the strategy will be relevant to Norway, such as developing new EEA legislation and Norwegian participation in EU programmes. We have therefore shown an active interest in the development of the strategy, and both the Prime Minister and the Minister of Trade and Industry have provided input.

At the same time, in our dialogue with the EU we are emphasising the importance of ensuring equal conditions of competition in the internal market. Among other things, it is important that the financial crisis does not lead to protectionist measures or increased use of support schemes that distort competition. We also consider it important to make sure that the measures do not lead to social dumping or to environmental concerns being set aside.

Europe 2020 replaces the Lisbon Strategy, and will be the main EU reform strategy in the time ahead. The aim is to achieve new, sustainable growth in the EU. It is an ambitious strategy, and other initiatives and existing policy areas in the EU will be linked to it. The strategy has measurable targets for the employment rate, R&D investments, action on energy/climate change, education and poverty reduction. 

There is expected to be modest growth in the EU economies this year, but the figures are uncertain. The banking sector remains vulnerable. If the EU’s economic situation continues to be weak, this will reduce Norway’s export opportunities, and it may lead to a fall in the price of important export goods. As the EU is our most important market, this will contribute to slowing recovery in key sectors in Norway. However, Norway has a considerable foreign trade surplus, so in the short term it is unlikely to have any major impact on our real economy as a whole.

As I have mentioned in this chamber on a number of occasions, the financial crisis has hit our neighbours in Iceland particularly hard. Ever since the Icelandic financial sector collapsed in the autumn of 2008, the line taken by the Norwegian Government has been to lead the way in international efforts to assist Iceland. The Icelandic Government has noted and appreciated this line.

Norway has taken the view that assistance to Iceland should be provided through international cooperation, and that the Nordic countries should stand together. It is through cooperation of this kind that Norwegian assistance can have the greatest effect. This is also emphasised in Recommendation No. 221 (2008–2009) to the Storting, in connection with the Storting’s deliberations on a guarantee for a loan from Norges Bank to Sedlabanki Islands, the central bank of Iceland.

The Norwegian Government has not made the further disbursement of the Norwegian loan to Iceland contingent on the conclusion of Icesave agreements between Iceland, the Netherlands and the UK. However, it is contingent on the Executive Board of the IMF, i.e. the IMF member countries, approving the second review of Iceland’s stability programme. All the Nordic countries have made this a condition.

For a long time there was doubt as to when the IMF board would consider the second review of the stability programme. Norway sought to ensure that this would not be contingent on the conclusion of new Icesave agreements, but that it should take place as quickly as possible. Cooperation between the Nordic countries was important in this context. The Government is pleased that these efforts were successful, and that the review was approved on 16 April, gaining the full support of the IMF board. This decision means that the third tranche of the IMF loan, the second tranche of the Nordic loans and the first tranche of the loan from Poland will be made available to Iceland.

Iceland must, however, fulfil its obligations under the EEA Agreement. The Icelandic Government has stated on a number of occasions that it will do so.

Iceland’s GDP per capita is above the average for Europe, even after the collapse of the Icelandic banking system. Iceland has a dynamic and competitive economy, and it has a foreign trade surplus. Unemployment for the fourth quarter last year was 7.6%. This is high by Icelandic standards, but still below the European average, Norway being one of few countries to have a significantly lower unemployment rate. Countries such as Finland, Sweden and the UK have higher rates of unemployment.

It is unclear when new Icesave negotiations will commence. Norway is maintaining close contact with the Icelandic Government with regard to this matter, and also of course with regard to the difficult situation that has arisen following the volcanic eruptions.

Since my previous address on important EU and EEA matters, the Treaty of Lisbon has entered into force, on 1 December last year. This is a step forward in the institutional development of the EU. Majority decisions will be sufficient in far more areas than before. The powers of the European Parliament will be extended in order to ensure democratic control, instead of national parliaments of individual states having the right to veto decisions in numerous areas. The stated goal is to make cooperation between the current 27 EU member states more efficient and more democratic. The way in which the provisions of the treaty are translated into practical action in the time ahead will show to what extent the EU has succeeded in achieving this goal.

The history of the EU concerns the development of a system of governance at the European level, and the development of institutional frameworks and rules for cooperation in our part of the world, in a growing number of policy areas. I would therefore like to elaborate on the Treaty of Lisbon, including the consequences it may have for Norway and our cooperation with the EU.

The history of the Treaty of Lisbon reflects the nature of EU cooperation. Debates, disagreements and even crises are a natural part of democratic development at country level, and this is also the case when countries cooperate with each other. They create momentum, they spur change and innovative thinking, and they alter the nature of the cooperation while also advancing it. The treaty has now entered into force, and its provisions are to be implemented.

One of the aims of the Treaty of Lisbon is to strengthen the role of the EU on the global stage. The fact that the EU has gained additional members naturally means that reaching consensus has become more difficult. At the same time, EU policy has become increasingly cross-sectoral. A growing number of policy areas, such as justice, trade, and development cooperation are being included in the broader EU foreign policy.

The EU has appointed a High Representative of the Union for Foreign Affairs and Security Policy, Catherine Ashton from the UK. She is to fill two former roles, namely those of High Representative for the Common Foreign and Security Policy and European Commissioner for External Relations and European Neighbourhood Policy. She is also to be Vice President of the European Commission.

Lady Ashton has a demanding post, but she has approached her new tasks in an open and inclusive manner, which is essential for someone who has to bring together strong-willed nations. She represents both the European Commission and the member countries on the world stage. She attends sittings of the European Parliament to discuss foreign policy, and she participates in EU summits. She is responsible for chairing the monthly Foreign Affairs Council meetings, which were previously chaired by the country holding the EU presidency. She is also to build up the new European External Action Service (EEAS), which will have a staff of about 6 000. This will be no easy task.

The EEAS is a new EU body, which will not be subordinate to either the Council or the Commission. The EEAS is to support the High Representative in her work, as well as assisting the President of the Commission and the President of the European Council. As Lady Ashton has said, the EEAS is to be a service organisation.

The EEAS is to have geographic desks covering all countries and regions of the world. We understand that the EEAS will have a separate “Norway desk”. We welcome this, and will maintain contact with the EU on this matter. The finer details of how the EEAS will be organised are yet to be finalised. We have been assured that EEA-related work will continue in the same way as today, should a decision be made to transfer the Commission’s EEA unit to the EEAS. This is something we will follow up closely.

Establishing the EEAS is a complicated process, as is the case with all institution building in the EU. Various considerations have to be weighed against each other, and various tensions in the member countries have to be dealt with – for instance the desire for closer coordination on the one hand, and the desire to pursue their own national foreign policy on the other. It will take time before the new structures are in place. In the time ahead, the EU will devote energy to laying an organisational basis that will enable the new EEAS to function well.

The aim is clear: to make it easier for the EU to speak with one voice in its dealings with the rest of the world, and to give the EU’s common foreign and security policy sufficient clout. As Norway and the EU have similar positions on many foreign policy matters, a more closely coordinated and effective EU will in many cases be to our advantage. Norway’s dialogue with the EU on foreign policy matters will continue, and the new EEAS may help to strengthen this dialogue. However, during this initial phase it may prove more difficult for us to influence EU decision-making processes in the area of foreign policy, particularly as we see that a lot of time and attention are being devoted to internal institutional matters rather than political ones. We are working systematically to position Norway in this context.

The EU’s common foreign policy will never be more common than its members allow it to be. Moreover, the EU’s global influence is dependent on the combined political strength of its member states and on economic developments. As I noted in my foreign policy address, we are witnessing a shift in the global economic and political centre of gravity towards Asia. Areas of policy that have traditionally been promoted by the EU and by Norway, such as human rights, climate policy and an open world economy, will now be confronted with the interests of other, increasingly powerful actors. This is the real, long-term test that awaits the EU’s common foreign policy – and our own.

In connection with establishing the new EEAS, questions have also arisen as to how this will affect cooperation between Nordic embassies. Let me take a moment to answer this. I have discussed this with my Nordic counterparts. They do not consider the EEAS to be a replacement for the individual EU countries’ own diplomatic representation, but rather a supplement to it. Efforts to strengthen and deepen cooperation between the Nordic countries will therefore continue. Nevertheless, we see that the Nordic countries are considering making adjustments to their own diplomatic representation, which in turn may affect existing Nordic cooperation at country level. Several countries have also expressed a wish that the EEAS should also deal with consular matters, an area in which the Nordic countries have traditionally cooperated. We are discussing this on an ongoing basis at all meetings of the Nordic foreign ministries.

Through the Treaty of Lisbon, the European Parliament has been further strengthened in its role as a legislative body, in the Community budget process and because it now has the authority to propose treaty amendments. In the co-decision procedure, which is now known as the “ordinary legislative procedure”, the European Parliament shares legislative power equally with the Council of the European Union. This procedure was introduced by the Maastricht Treaty, but is now being extended to cover more than 90% of EU legislation.

This gives national parliaments a more direct role in the functioning of the EU. They are to ensure that the principle of subsidiarity is complied with when EU legislation is adopted. A national parliament may, within eight weeks of receiving a draft legislative act, give its opinion as to whether a matter is to be lifted to Union level. 

As we have discussed in a number of debates in this chamber, Norwegian efforts vis-à-vis the European Parliament must be constantly intensified as the institution evolves and its stature is enhanced. The Norwegian Mission to the EU in Brussels plays a key role in this context. Our aim is to promote Norwegian interests on an ongoing basis in matters being dealt with by the European Parliament. 

We do not have an agreement on seconding national experts to the European Parliament like the one we have with the Commission. The Ministry of Foreign Affairs is now chairing a working group made up of representatives from several ministries that is considering how Norway can gain acceptance for having national experts in the European Parliament as well. The working group will also consider which areas are of particular interest to us.

The Storting has decided to have its own Permanent Representative to the EU, to liaise with the European Parliament. The purpose of this arrangement is to improve the Storting’s access to information from, and contact with, the European Parliament. This is positive.

The Treaty of Lisbon will also have consequences for EU justice and home affairs policy. Norway participates in important aspects of the cooperation in this field through the Schengen Agreement. The provisions governing cooperation in this field are gathered in a separate Title of the treaty with the heading “Area of freedom, security and justice”. The elimination of what is known as the pillar structure of the EU treaties means that most police and judicial matters that were previously dealt with through cooperation at intergovernmental level will now be considered and adopted by a qualified majority vote in the Council, with the European Parliament having full right of co-decision.

This also means that the part of the legislation in the field of justice and home affairs that is adopted by Norway will now to a large degree be adopted by a majority decision in the Council, and also by the European Parliament. We must therefore work more directly and systematically vis-à-vis the European Parliament in this area as well.

The new EU five-year programme in the field of justice and home affairs is called the Stockholm Programme. It was adopted at the meeting of the European Council in December 2009 and and will have a bearing on Norwegian policy. The aim of the programme is to secure the fundamental rights, freedoms and integrity of the individual citizen who is entitled to reside within the boundaries of the EU. At the same time, external border control and crime prevention are important, both in the EU and here in Norway. Cooperation on strengthening border control could reduce illegal immigration. It is proposed that the mandate of Frontex, the EU agency that coordinates border security cooperation, should be extended. The main points in the proposed extended mandate relate to strengthening the commitment of member states – and Norway – to participate in joint operations with personnel and equipment, further developing the cooperation between Frontex and countries of orgin and transit, intensifying cooperation on joint return operations, and having a clear policy for maritime operations.

The measures set out in the Stockholm Programme affect Norway, for one thing because we are bound by a number of legislative acts through the Schengen cooperation and the EEA Agreement. According to the white paper on Norwegian refugee and immigration policy in a European perspective, which was submitted to the Storting in March, this important policy area must be formulated in cooperation with our neighbouring European countries, and adapted to the situation in those countries.

Despite the fact that the Lisbon Treaty essentially retains the substantive provisions governing the internal market that form the basis for the EEA Agreement, it could also indirectly affect the way the EEA cooperation functions. As I have mentioned in the Storting on previous occasions, the Lisbon Treaty completes the elimination of the pillar structure that was introduced by the Maastricht Treaty. The new treaty makes EU cooperation even more cross-sectoral.

The EEA Agreement is based on the original EC Treaty and the provisions on the internal market with the exception of the provisions on agricultural and fisheries policy, the customs union, trade policy and humanitarian and development aid. With the Lisbon Treaty, EU justice and home affairs policy has been given the same legal basis. Therefore, the EU will be able to an increasing extent to develop legislation across the internal market and the justice area. Today it is already difficult to determine whether new EU legislative acts or parts of them should be incorporated into the EEA Agreement. We have to expect that there will be an increasing need to review new legislation in specific terms, provision by provision. This may make it more difficult to clarify essential points and reach agreement with the EU on a number of matters. We ourselves will probably have to play a proactive role. Key tools at our disposal are our right to participate in expert groups and committees, and our close dialogue with the Commission throughout the EEA two-pillar system. But we have reason to presume that the Commission is also interested in pragmatic cooperation with Norway in this area.

The Lisbon Treaty could have consequences for our participation and our ability to exert an influence through the EEA Agreement. If it becomes increasingly unclear whether, or to what degree, new legislative acts are EEA relevant, the right of the EEA/EFTA countries to provide input during the process of drafting the legislative acts may be called into question. This is also why it will continue to be at least as important as previously to communicate Norway’s views and develop Norwegian positions at an early stage, build alliances, and carry out targeted efforts to maximise Norway’s influence in EU capitals and institutions.

The Commission also recently submitted a proposal for amended comitology procedures, i.e. procedures for developing legislation whereby the Commission is conferred powers and competence by the Council and the European Parliament to formulate and adopt supplementary legislation. It is important for Norway to participate in this work as it provides an opportunity for us to promote Norwegian views during the EU’s work to further develop legislation that either already has been or will be incorporated into the EEA Agreement. We are working to ensure that Norway and the other EEA/EFTA countries become engaged in these processes in the EU with a view to ensuring that our right to participate is adequately safeguarded.

The voting rules in the programme committees have also been amended as a consequence of the Lisbon Treaty. Norwegian representatives have noted that their voices are not being heard in the same way as previously. We will follow this matter closely in the time ahead, and take it up with the EU to the degree we consider necessary.

In the current parliamentary term, we are following two main tracks in the pursuit of our European policy: first, we have established a broad-based committee to undertake a research-based review of our experience of the EEA Agreement. The committee’s 12 members include researchers and other resource persons who have practical experience of working with matters covered by the EEA Agreement. The committee is to submit its report in autumn 2011, and it will be followed by a white paper.  

This work is well under way, and a reference group comprising representatives of NGOs, the business sector and the political parties has been established. The Government’s aim is that the review should contribute to a common knowledge base that can be drawn on in the European policy debate. 

The other main track we are pursuing concerns updating and raising awareness of the measures set out in the white paper on the implementation of Norway’s European policy (Report No. 23 (2005–2006) to the Storting). This white paper is still the basis for the Government’s European policy. 

During the current parliamentary term we are focusing on measures for enhancing knowledge and expertise and promoting greater transparency and dialogue. The Ministry of Foreign Affairs has, for example, begun seeking ways of making public information on the EEA and Norway’s relations with the rest of Europe more user-friendly and more easily accessible. We will implement around 40 measures targeted at selected user groups, such as the private sector, the public administration, children and young people, the media, NGOs and recipient groups in the EU. 

To sum up this point, the EU member states have reached agreement on the Lisbon Treaty, which is designed to make the cooperation more democratic and more efficient. As is the case with all other political activity, such ambitions must translate into concrete results. Norway’s primary concern is the economic and political well-being of the EU countries. They are our neighbours and trading partners, and most of them are our allies. And our interests coincide in most areas. However, it is by no means given that it will become easier to safeguard Norwegian interests as time passes. We are facing a more complex EU, where the countries will have to put effort into getting new, common institutions up and running. These institutions will in turn be seeking to establish their position and competence, in cooperation with existing institutions, while the EU countries will constantly have to strike a balance between promoting their own national interests and supporting common EU positions.

As a non-member that is closely integrated in EU cooperation through the EEA Agreement and other affiliations, we will continue to promote Norway’s views and interests in this landscape. This is in our interests, but also in the interests of the EU.

The EU has designated 2010 as the European Year for Combating Poverty and Social Exclusion. On 18 June 2009, the Storting gave its consent for Norway to participate in this European Year.

Norway is taking its share of the responsibility for promoting development and cohesion in Europe, particularly through the EEA grants. In the five-year period 2004–2009, Norway provided more than NOK 10 billion for projects and programmes in the 15 beneficiary states. In the next five-year period, Norway, Iceland and Liechtenstein will together contribute EUR 357.7 million a year, or some NOK 3 billion. Thus, we are making a substantial contribution to reducing social and economic disparities in the EEA area and, as you know, about 97% of this funding will be provided by Norway.

Several of the beneficiary states are in a difficult economic situation with high unemployment, public budget cuts and growing debt obligations. The EEA grants give us a unique opportunity to strengthen our ties and broaden our cooperation with our new partners in the EEA at a time when these funds mean a great deal.

Through the EEA financial mechanisms, Norway is supporting common European aims to improve environmental standards, promote economic and social cohesion between the countries and intensify efforts in the justice sector, civil society and the health sector. This is in keeping with Norway’s policy and priorities.

These efforts are producing results, projects are being completed and the Ministry of Foreign Affairs is publishing regular reports that provide lessons learned for the next five-year period.

As the members of the Storting are well aware, negotiations on a new agreement on the financial mechanisms for the period 2009–2014 were concluded before Christmas last year. We expect to be able to begin formal talks with the beneficiary states on the use of the funds in the course of the autumn. However, it has taken time for the EU to complete the final process so that the agreement can finally be signed. Norway has concluded the process for its part: The Storting has been consulted on the negotiating result, and the Government intends to submit a proposition to the Storting on this matter in the course of the spring session.

In this period, the EEA grants are to be concentrated to a greater degree on areas that are given priority by Norway. At least a quarter of the funds are to be used for environmental and climate measures. We will also support measures to promote decent work and tripartite cooperation, and will continue our support to civil society. The private sector dimension will be strengthened through a separate programme for green industry innovation.

Justice and home affairs is another sector that will be important in the time ahead, and this is in keeping with EU and Norwegian interests. For example, the Government intends to explore the possibility of using the EEA grants for schemes under which prisoners would serve their sentences in their countries of origin. There will also be separate research programmes and a scholarship fund for cooperation on education. The guidelines for the use of the funds in the new five-year period will be described in more detail in the forthcoming proposition to the Storting.

As set out in the agreements with the EU, one of the aims of the financial mechanisms is to strengthen relations between the donor states and the beneficiary states. A good basis has already been laid through project cooperation with Norwegian centres of expertise in the period 2004–2009. In the coming five-year period, we will seek to facilitate contact-building activities and programmes that will promote cooperation in the longer term. There will be opportunities for relevant Norwegian authorities to engage in partnerships in connection with programmes in the following areas: environment and climate change, carbon capture and storage, justice, education, research, health, business development and regional development. Although the funding provided through the mechanisms is not earmarked, recipients will be interested in Norwegian expertise.

In connection with the negotiations on new, important EEA contributions, Norway and the EU have also agreed to renew the fish protocol and increase important tariff quotas. The new agreement on market access for fish will enter into force on the same date as the agreements on the new financial mechanisms.

I would now like to turn to some specific EEA matters that are of particular relevance today.

The EU climate and energy package, with what are known as the 20–20–20 targets, was launched in autumn 2007. The package contains measures to achieve the goal of direct reductions in greenhouse gas emissions through the Emissions Trading Directive, and binding commitments to promote the use of renewable energy, as a more indirect way of cutting emissions.

Despite the fact that the global negotiations in Copenhagen did not succeed, the EU will maintain the specific content of its climate policy. At the meeting of the European Council in March, there was discussion of how the Copenhagen Accord could be used in the negotiations under the Climate Change Convention, and how the EU could build alliances to promote better climate policy in other countries.

The revised Emissions Trading Directive sets out rules for the third phase of the EU Emission Trading System, which is to run from 2013 to 2020. The system will cover around half of all greenhouse gas emissions in the EU. The Government is considering incorporating the directive into the EEA Agreement, and the conditions for this are now being discussed with the Commission.

The Renewables Directive is also part of the climate and energy package. This directive sets out binding national targets for the share of renewables in each country’s energy mix. In addition, each country must reach a 10% share of renewable energy in the transport sector. The national targets are part of the EU’s internal burden-sharing arrangement. In 2005, the share of renewable energy in the EU countries’ energy mix was 8.5%. The goal is to increase this share to 20% by 2020. As you know, approximately 60% of the energy used in Norway today is from renewable sources, which is higher than in any EU member state.

In the Government’s view, the Renewables Directive is EEA-relevant, and it has been the subject of extensive consultation in Norway. It is a comprehensive piece of legislation which affects large parts of the energy sector, and must therefore be considered very carefully.

We will seek to ensure that the Renewables Directive is considered for incorporation into the EEA Agreement, so that that the directive can be implemented in Norway in an appropriate manner. 

As for what is known as the Eurovignette Directive on harmonisation of transport infrastructure charging, e.g. for the use of toll roads, the Government is still in a dialogue with the Commission as regards incorporation into the EEA Agreement. We will keep the Storting informed on the progress of this matter.

The financial crisis has revealed many weaknesses in the regulation of the European finance markets and the supervision of these markets. For this reason, the EU has launched a major effort to establish a new, improved EU-wide supervisory structure. It is proposed that three new agencies should be created to supervise the banking, insurance and securities sectors. These agencies are to have the competence to take decisions that affect individual companies.  At the macro level a separate body, the European Systemic Risk Board, is envisaged. It will be responsible for monitoring and assessing risks to the stability of the financial system as a whole.

This will also affect the internal market, of which Norway is part. The Government is therefore working to ensure that the EEA/EFTA states are adequately represented in these new bodies. Once the relevant legislative acts have been adopted by the EU, the Government will consider incorporating them into the EEA Agreement so that Norway can participate in the common efforts to supervise the financial market.

The extensive consultation on the Data Retention Directive has been completed. The Government is now reviewing the results and clarifying its position as to whether the directive should be incorporated into the EEA Agreement. As you know, the three parties in the coalition government have divergent views on the directive. We will keep the Storting informed of the status of this process. The Commission is currently conducting an evaluation of the Data Retention Directive, and is to submit the results to the European Parliament and the Council by 15 September. We will take this into account in our own assessment of this matter.

In 2009 the EU adopted a new directive on deposit guarantee schemes, which goes further in harmonising such schemes than the previous directive, which has been incorporated into the EEA Agreement. The new directive limits the level of coverage per depositor per bank to EUR 100 000. This is less than half of the level of coverage under the Norwegian scheme, which is NOK 2 million. The rationale behind full harmonisation of such schemes is to ensure that banks in the various countries compete on a level playing field.

However, although Norway has had higher minimum levels of coverage than other countries for a long time, this has not distorted competition in favour of Norwegian banks. We are working to ensure that we are able to retain the Norwegian scheme under the new directive, in accordance with the Government’s new policy platform and the national budget for 2010. So far the EU has been negative, but we will continue our efforts to gain acceptance for our views.

The comprehensive legislation for the production, sale and control of foodstuffs and animal feed has long been delayed pending the approval of the Icelandic parliament, but Iceland has now submitted its notification, and the Food Law Package formally entered into force on 1 May 2010. It had been made provisionally applicable as from 1 March.

This legislation applies to the entire food chain, from primary production to sale to the final consumer, and is intended to ensure a high level of consumer protection and common rules for the industry in the EEA countries.

After protracted negotiations, Norway and the European Commission reached agreement in January this year on an increase in trade in agricultural products, based on Article 19 of the EEA Agreement. The matter will be submitted to the Storting.

The EU regulation on trade in seal products was adopted last year, and entails a total ban on trade in seal products in the EU. The ban will enter into force on 20 August this year. This matter concerns our right and opportunities to carry out sustainable management of our living marine resources and to engage in trade in products harvested by hunting and fishing. None of the seal populations we hunt are at risk. If we accept the ban, we are accepting the fact that it will set a precedent for such bans on trade in our most important market.

This is one of the reasons why the Government was of the view that it was appropriate to take the matter to the WTO. In December last year, Norway, together with Canada, engaged in dispute settlement consultations with the EU in the WTO. The Government is now considering whether the case should be brought before a WTO panel. Before making a decision, we will thoroughly assess the answers and signals we have received from the EU with regard to the dispute settlement consultations. We will also keep in close contact with Canada in this connection.

The EU has submitted a draft implementing regulation to the member states regarding exceptions from the ban on trade in seal products. We are also seeking to influence this process. But judging by the wording of the draft regulation, it does seem that any of the exceptions would permit the sale of Norwegian seal products in the EU.

EU agencies are playing an increasingly important role both in the shaping of EU policy and in the implementation of legislation at national level.

The EEA/EFTA countries wish to participate in all agencies where this would have relevance for our ability fulfil our EEA obligations. At present, the EEA/EFTA countries are participating in 17 such agencies within the framework of the EEA Agreement. We participate, without the right to vote, in the governing bodies of all these agencies, with the exception of the European Food Safety Authority, where we are not represented on the board.

 We wish to participate in an additional five agencies, including the new EU Agency for the Cooperation of Energy Regulators. The EU is in favour of Norwegian participation in these agencies. We are now seeking to find arrangements for such participation within the framework of the EEA Agreement.

Before I conclude this address, I would like to underscore once again that the financial crisis is putting international solidarity to the test and highlighting the differences between countries, also within Europe. This is illustrated by the pressure on the common currency and the precarious situation in Greece.

Norway has been less severely hit by the financial crisis than most other countries in Europe, but vital Norwegian interests are nonetheless being affected. The EU countries are indisputably Norway’s most important economic partners. The Norwegian economy is strong, but it is open, and vulnerable to economic fluctuations. An effective EU and a well-functioning internal market are very important for Norwegian jobs and welfare. Norway is dependent on the entire EEA area emerging relatively unscathed from the financial crisis.

The EU countries are also our closest allies and political partners, and we are woven together by cultural and historical ties, common values and a shared approach to justice. We are determined to pull together with the rest of Europe in dealing with the financial crisis and its aftermath. We will show solidarity and take responsibility. 

I would like to close with a few words about last week’s events in a European perspective. The treaty on maritime delimitation in the Barents Sea and the Arctic Ocean is also an important event for Europe – a European boundary has been established. New opportunities for cooperation on resources, the environment and business activities are now arising.

Norway, Russia and the rest of Europe will benefit from increasingly close cooperation and good common solutions. The agreement between Norway and Russia on facilitating local border traffic in Sør-Varanger is another case in point. This arrangement is based on the Schengen acquis, and there are only a few minor points left to be clarified before the agreement can be signed. Under the agreement approximately 9 000 people living on the Norwegian side of the border and 45 000 people living on the Russian side will be able to apply for a local border resident card that will allow them to cross the border without a visa. We will probably see other examples of this kind in the years ahead. Finding common solutions, both regionally and internationally, is a cornerstone of Norwegian foreign policy.