Biannual address on important EEA and EU matters

Mr President,

The tide turns quickly in today's Europe. Now, there is far more solidarity, optimism and creativity in the EU than there was just a year ago. This is good, for Norway too.

The reasons for this shift in mood are complex. Firstly, the upturn in the European economy is giving many countries greater room for manoeuvre. Growth in the euro area is stronger than previously forecast, and the economic recovery has developed into a broad-based upswing. Unemployment has declined gradually over the past five years. This trend is expected to continue, and is having a positive impact on the discussions on the future of Europe and the EU.

Secondly, global developments have highlighted the value of European cooperation. Here I am thinking both of the refugee and migration crisis and of the need for robust agreements to enable us to tackle climate change. In addition, there is an increasing awareness of the need for European countries to invest more, both financially and politically, in our common security.

More countries are seeing that global agreements carry obligations and must be followed up. These agreements reflect the fact that we belong to a community of shared values – a community that we feel at home in.

Thirdly, the EU countries have shown solidarity and unity in dealing with Brexit. Dire predictions of a domino effect and the collapse of the Union are proving unfounded. Since its establishment, the EU has demonstrated over and over again that it is possible to turn a crisis into an opportunity, and there is growing awareness of the benefits of European cooperation.

Fourthly, we are seeing signs that the EU no longer has to dedicate all its time and resources to crisis management. It can now devote some of its energies to further developing long-term policies and cooperation structures.

Mr President,

There is no doubt that Brexit will have major implications – for the UK, for the EU, and for Norway too. Concerns in the private sector are contributing to a low rate of investment in the UK, and according to the OECD, uncertainty surrounding Brexit resulted in the UK having the lowest annualised rate of growth of all the G7 countries in the first half of 2017. Secretary-General of the OECD Angel Gurría described it as 'crucial that the UK and the EU maintain the closest economic relationship possible'.

The nature of the UK's future links to the EU's internal market – and to Norway through the EEA cooperation – is a central, but as yet unresolved issue. The UK Government has said that the UK will leave the internal market and the EU customs union, and that it will seek a bespoke model for its future cooperation with the EU.

The UK and the EU are continuing their negotiations on a withdrawal agreement. This agreement must be in place by the time the UK leaves the EU, which will happen at 23:00 UK time (midnight Brussels/Norwegian time) on 29 March 2019. But in order to allow time for ratification, the negotiations on the withdrawal agreement must be concluded by autumn next year, according to the schedule outlined by the EU.

The clock is ticking for the withdrawal negotiations. At its meeting in October, the European Council concluded that sufficient progress had not been made to start talks on the future relationship between the UK and the EU. The next opportunity to secure a decision that would allow the talks to move on to the next phase will be at the European Council summit on 14-15 December. The parties do not therefore have much time to achieve the necessary progress. Following the last round of negotiations on 8-9 November, the EU's chief negotiator, Michel Barnier, made it clear that progress had to be made within the next two weeks.

The EU's aim is to secure an agreement, but it has emphasised the fact that leaving the Union has consequences. It is not possible for a country leaving the EU to maintain an equally close relationship, or expect to have fewer obligations and more rights. There must be a balance.

The EU is by far our most important trading partner, while the UK is our largest single foreign market for goods – including oil and gas – and services. Our exports to the UK account for close to a fifth of Norway's total exports, amounting to over NOK 200 billion a year. It is in Norway's interests to maintain the EEA Agreement and our other agreements with the EU. At the same time, we want to maintain as close cooperation as possible with the UK, with the best possible level of access to the UK market.

Norway is not party to the withdrawal negotiations with the UK. But, by virtue of our membership of the internal market, we are not an ordinary third country. We are directly affected by the negotiations because the agreement the EU and the UK reach will have consequences for us too. We would therefore like to have the opportunity to be included in new arrangements agreed between the EU and the UK.

On the issue of citizens' rights, the EU's aim is to safeguard the acquired rights that EU citizens – both those who have resided in the UK in the past and those who are resident in the UK up to the withdrawal date – have under EU law. Similarly, UK citizens in other EU countries should be able to retain their acquired rights. The Government is working to ensure that Norwegian citizens who have acquired rights in the UK will continue to have the same rights as EU citizens. Prime Minister Theresa May has assured Prime Minister Erna Solberg that the UK will offer the same rights to Norwegian citizens as those it has now offered to EU citizens.

Over the past few months, the Government has further intensified its work on Brexit. We must be well prepared if we are to maintain close cooperation with the UK after its withdrawal from the EU. For example, we must have a good overview of the areas where alternative agreements will need to be in place from the very first day the UK is no longer a member of the EU.

We must also be prepared for the fact that the EU and the UK may not be able to agree on a withdrawal agreement or on any transitional arrangements. If this happens, trade with the UK will be regulated in the first instance by the WTO rules. It is important for the Norwegian business sector that this situation is avoided, as it could create uncertainty and have economic consequences.

We have established an interministerial Brexit working group. The group is following the negotiations and developments closely, and is identifying Norwegian interests that could be affected by Brexit. The Government has also set up a reference group for the business sector under the joint leadership of the Ministry of Foreign Affairs and the Ministry of Trade, Industry and Fisheries. The group's primary task is to exchange information with representatives of the business sector on aspects of the Brexit process that could affect Norway. The group held its first meeting on 15 November.

We are maintaining our close dialogue with the EU on the parts of the negotiations that affect the internal market. Both Norway and the EU consider it important to preserve the integrity of the internal market. This was reaffirmed at my meeting with Mr Barnier last week. It is also clear that the EU will not negotiate with the UK on our behalf; we must – and will – do that ourselves. We have intensified our already close dialogue with the UK on the various agreements we need to put in place to ensure that relations between our two countries can remain as close as possible after the UK leaves the EU and the EEA. We have made it clear that we are ready to discuss our future relationship at the earliest opportunity.

The Government's primary objective is to safeguard the EEA Agreement. We will seek to participate in any transitional arrangements between the UK and the EU where this is in our interests, and we will work to put in place an extensive set of new agreements with the UK.

Mr President,

There is a new sense of dynamism in the discussions on the future of the EU.EU leaders recently agreed on the 'Leaders' Agenda', which sets out the EU's priorities for the next year and a half.

More frequent meetings of the European Council are planned – as many as seven summits in 2018 – to ensure progress on the most pressing issues over the next 18 months. These include reform of the eurozone, migration, internal and external security, trade, and the future financing of the EU.

The European Commission has proposed a number of measures to deepen the Economic and Monetary Union (EMU), with a view to promoting growth and welfare and increasing resilience to economic shocks. Among the proposals that are currently being discussed are the gradual transformation of the European Stability Mechanism into a fully-fledged European Monetary Fund, the creation of a new post of eurozone finance minister, and the establishment of a separate euro area budget line within the EU budget. In the short term, putting in place the final elements of the Banking Union and the Capital Markets Union is regarded as the most pressing task. Several of the proposed measures will require amendments to the EU treaties.

The EU is also establishing new instruments to strengthen cooperation in the area of security and defence. One of them is the Permanent Structured Cooperation on security and defence, or PESCO as it is known, which is expected to be launched in connection with the EU summit in December.

A new European Defence Fund was launched in the summer and is taking shape. Norway is the only non-EU country to be taking part in a pilot project on defence research, which is one of the Fund's two strands. Other initiatives are also being developed.

The current discussions, and the new Leaders' Agenda, also reflect the EU's desire to listen to its citizens, and to respond to their needs and to the needs of Europe as a whole. Norway's needs are also relevant in this context. We are a part of Europe, and the EU's ability to tackle challenges relating to migration, the economy and internal and external security affects us too. It is vital for us to be active participants in these processes.

The Government will follow EU initiatives, participate actively in debates, and communicate Norway's positions and other contributions we could make, where appropriate. Norway cannot sit back and freeload off others who are working to promote prosperity and security. We must maintain our constructive policy of engagement with the EU, because it is in our own national interests to do so.

And at the same time, we must keep an eye out for new forms of cooperation with the EU that may emerge as a result of Brexit. Here too, Norway intends to participate actively in the debate so as to ensure that we are included in any new arrangements, where this is in our interests.

Mr President,

Although the migratory pressure on Europe has eased since 2015 and 2016, justice and home affairs remains a priority area for the EU. Developing a well-functioning, common migration and asylum system and safeguarding internal security are two of the fundamental challenges facing the EU.

In September this year, the Commission presented its mid-term review of the 2015 European Agenda on Migration and proposed further measures to make EU migration and asylum policy stronger, fairer and more effective.

The increased focus on the need to combine the internal and external dimensions of migration policy is highlighted as particularly important for dealing with the large number of migrants who are coming to Europe, and necessary if we are to find appropriate ways of reducing irregular migration, stepping up efforts to return those who are not entitled to stay in Europe, and putting an end to migrant smuggling from Africa.

The European Agenda on Migration is important for Norwegian interests because many of the measures are relevant for Norway's cooperation with the EU. For example, Norway supports the EU's cooperation on migration with countries in Africa, which was agreed at the Valletta Summit. We have already provided NOK 32.5 million to the EU Emergency Trust Fund for Africa, which has been set up to promote stability and address the root causes of irregular migration and displacement in Africa. And we have recently decided to allocate a further NOK 50 million to the fund.

Norway's increased focus on providing assistance to countries and regions affected by conflict and fragility could also help to promote stability in key transit countries and countries of origin, and this in turn could help to reduce the migratory pressure on Europe.

In the Malta Declaration, made in February this year, the EU announced additional action in Libya to reduce irregular migration along the Central Mediterranean route. The EU has allocated EUR 200 million for migration-related efforts in Libya. Both border controls at Libya's southern land borders and the Libyan Coast Guard are now being strengthened through training and capacity-building projects.

The EU has also announced additional measures to improve the protection of vulnerable migrants and refugees in Libya, in cooperation with the UN Migration Agency (IOM) and the UN Refugee Agency (UNHCR). A project to enable the assisted voluntary return from Libya of 5000 migrants is also being planned.

The Commission has proposed a new resettlement scheme, which aims to resettle 50 000 particularly vulnerable people from countries such as Libya, Egypt, Niger, Sudan, Chad and Ethiopia. So far, Norway has contributed to this effort by agreeing to take in 1 500 asylum seekers from Italy and Greece and by offering to resettle over 8 000 refugees from Syria's neighbouring countries in the period 2015-2017.

It is in Norway's interests that agreement is reached on a fairer distribution of asylum seekers in Europe. This is being discussed in connection with the revision of the Dublin Regulation. This work is still under way; agreement has not yet been reached on how the principles of responsibility and solidarity are to be applied in the future. Norway is following the discussions closely, and will help to find solutions that ensure a predictable and sustainable system.

Mr President,

The EEA Agreement is the cornerstone ofNorway's European policy, and it is the most important agreement we have with our European partners. For more than 20 years, it has helped to strengthen trade and economic ties and promote ever broader cooperation between Norway and the EU. The EEA Agreement guarantees equal rights and obligations for companies within the internal market – our largest market, consisting of 31 countries and with a total population of 500 million. This is of vital importance to us, given that close to 80 % of our exports go to the EU and over 60 % of our imports come from EU member states.

But the EEA Agreement is much more than an agreement on market access. It gives all of us important rights and opportunities in Europe. To study, to do research, and to work. It helps ensure the quality of our air and drinking water. It is about safe food, safe toys that are free from toxic substances, animal health and welfare, and not least access to the best research and innovation groups in Europe and the rest of the world. Common rules in these areas are designed to ensure equal conditions of competition and make trade easier for both Norwegian and European companies. This is in the interests of the business sectors in both Norway and the EU.

The rights of Norwegian workers have been strengthened in many areas as a result of the EEA rules. Examples here include employment protection in cases of collective dismissal, employees' rights when business ownership is transferred, and the rules on written employment contracts. Moreover, the EEA rules generally set minimum standards, which means that we retain the right to develop more stringent rules at the national level if we wish to do so.

The internal market accounts for more than 250 million workers. Ten per cent of all employees in Norway are labour immigrants from EU/EEA countries – most of them from the new member states. Norway needs these workers.

The importance of the EEA Agreement is also demonstrated by the many lorryloads of Norwegian fish that go to the EU market every day. We provide around 25 million meals a day. Due to the fact that EEA food and veterinary legislation is largely harmonised with EU legislation, it is possible for fresh fish to be sent directly from Norwegian producers to the European market without being held up by import controls at the border. No ordinary trade agreement could offer the same benefits.

At the same time, it is clear that the EEA Agreement is a negotiated compromise. Like all other agreements, it has had to strike a balance between rights and obligations. But it has served us well ever since it entered into force in 1994. Norway's cooperation with the EU and the EU member states is based on the EEA Agreement and Norway's other agreements with the EU. This has been the policy of all Norwegian governments, including the current one, since the EEA Agreement was signed.

It is unlikely that the EU would be interested in renegotiating the 1973 industrial free trade agreement to accommodate Norwegian demands and wishes. Cooperation with the EU is not a menu you can just pick and choose from. Originally, Switzerland wanted bilateral agreements in 15 areas. Now, 24 years later, it has concluded about half that number, and these agreements took 12 years to negotiate. In addition, Switzerland has had to accept agreements in areas where they were not seeking to cooperate, but where the EU wanted an agreement. There is no reason to believe that this would be any easier for Norway than it has been for Switzerland.

Mr President,

Certain EEA matters have required closer attention recently. Let me mention some examples.

The travel industry is a highly international industry, and common rules in Europe ensure predictability for both travellers and businesses. We are therefore pleased that the Package Travel Directive was incorporated into the EEA Agreement on 22 September. The Directive ensures better consumer protection for travellers who put together their own packages (combinations of travel arrangements) online. For example, it makes it easier to cancel bookings or transfer a booking to another person.

The Directive also sets out more stringent requirements for the information that is provided to travellers. Norwegians travel a lot, and increasingly put together their own trips online. It is therefore important that the consumer rules in the EEA Agreement are adapted to changing patterns of consumption. At the same time, the Directive safeguards the travel industry's need for equal conditions of competition. The Directive thus represents an important strengthening of the travel market rules.

In 2016, the Storting approved Norway's participation in the European system of financial supervision. Norway's financial supervisory authority, Finanstilsynet, is still located in Oslo, but it participates closely in the cooperation between the national supervisory authorities in Europe. Norway's participation in the European cooperation on financial supervision is necessary to put in place a framework that will allow the Norwegian financial sector to continue to have access to the whole EEA market.

However, a good deal of work remains to be done. There are still 259 legal acts relating to this area that need to be incorporated into the EEA Agreement in the near future. This is not an easy task, and the responsibility for it lies both with the EU and with the EFTA countries. The Government and the financial sector are keen to see progress being made in this work.

We have agreed with the Commission that both parties must allocate the necessary resources to get this work done.

It is also positive that the EU Regulation on medicinal products for paediatric use together with three related regulations, sometimes referred to as the 'paediatric package' (pediatripakken), are being incorporated into Norwegian law. We now have common rules designed to ensure better documentation of the safety and effect of medicines, and to improve the availability of medicines specifically for children. The incorporation of the regulations into Norwegian law will require legislative amendments and the transfer of powers on financial penalties to the EFTA Surveillance Authority, and will have budgetary consequences.

The framework for the EEA/EFTA states' participation in the EU Agency for the Cooperation of Energy Regulators (ACER) was established earlier this year, with the incorporation of the EU's third energy package into the EEA Agreement. Earlier this month, a proposition on consent to ratification was presented to the Storting together with bills proposing the amendments to energy and natural gas legislation that are needed to bring Norwegian law in line with the current EU energy market rules.

The EU is engaged in a major effort to implement the Energy Union through numerous proposals to reform the energy legislation. Some of the most important legislative proposals are included in the Clean Energy for all Europeans package, sometimes referred to as the 'winter package'. The Government has considered it important to submit proposals and viewpoints at an early stage, both unilaterally and in cooperation with other countries. Norway is in a different situation to many of the EU member states. Our power supply is based on renewable hydropower, and we are a major energy exporter. In order to safeguard Norwegian interests, it is therefore vital for Norway to take a proactive approach.

As regards climate change, Norway's target is to reduce greenhouse gas emissions by at least 40 % by 2030. Norway intends to achieve this target together with the EU, and this has been welcomed both by the EU as a whole and by individual EU countries.

The EU is expected to reach agreement soon on the implementing legislation necessary to achieve the 2030 emission reduction target. Political agreement was recently reached on the revision of the Emissions Trading Directive for the period 2021-2030. Norway is already participating in the EU emissions trading system (EU ETS) through the EEA Agreement.

The negotiations on the rules for emissions from non-ETS sectors for the same period are also in their final phase. Norway does not consider these rules to be EEA relevant, but will have to be guided by them in the event of an agreement on joint fulfilment of the climate target for 2030 with the EU.

Negotiations on a governance system for the Energy Union are also under way. This will provide a framework for monitoring, reporting and verification of emissions. The relevant ministries are working to clarify whether and how these rules will apply to Norway if agreement is reached on joint fulfilment of the 2030 climate target.

An agreement on joint fulfilment cannot be concluded until the EU has adopted its implementing legislation on emissions reductions. We expect to be able to start a more formal dialogue with the EU on this matter in 2018. In the meantime, the Commission has indicated its willingness to discuss issues relating to the form of the agreement in the period before the adoption of the legislation in the EU. Norway has indicated that an agreement on joint fulfilment could be incorporated into Protocol 31 to the EEA Agreement on cooperation in specific fields outside the four freedoms.

At the same time, we have made it clear that Norway will not automatically be bound by targets and rules relating to climate and energy that go beyond the provisions of the main part of the EEA Agreement and its annexes and the envisaged agreement on joint fulfilment of the 2030 climate target.

Mr President,

The Commission's proposed revision of the Posting of Workers Directive is intended to ensure that foreign workers do not have unacceptable pay and working conditions, and to ensure equal conditions of competition for local and foreign enterprises. The aim is to establish the principle of equal pay for equal work at the same place.

The Government welcomes the Commission's effort to ensure the right balance between the free movement of services, protection of workers, and fair competition. However, the Government has emphasised that it is important not to restrict the right of individual countries to determine salaries and other forms of remuneration. The Government is following this process closely, and we will make active use of the opportunities available to us to influence the EU's work in this area.

Work-related crime is a growing challenge.Together with the social partners, the Government has put the issue of work-related crime high on the agenda. The Government presented its strategy for combating work-related crime in January 2015, and this was revised and strengthened in February this year.

Work-related crime and unscrupulous employment practices are transnational problems. International cooperation is essential for tackling these problems, and has now been established. The EU's Posting of Workers Enforcement Directive was incorporated into Norwegian law on 1 July 2017. Among other things, the Directive requires the relevant authorities to cooperate closely across national borders. In a separate initiative, the Prime Minister has highlighted the challenges in this work to the Commission and has proposed a number of measures aimed at strengthening cooperation in this area.

The Prime Minister recently took part in the Social Summit for Fair Jobs and Growth in Gothenburg, where she presented the main elements of her proposals to certain heads of state and government. Norway's experience is that a common effort to combat work-related crime should be based on a government strategy that requires the various actors involved to take concrete action.

One of the issues Norway would therefore like to discuss with its European partners is the feasibility of developing a common European strategy for combating work-related crime.

Tax crime in connection with the provision of cross-border services is another aspect of this issue. Here too, international cooperation and cross-border exchange of information are crucial. At the same time, it is important to retain our national rules, under which Norwegian employers are obliged to report assignments that are given to foreign contractors. This obligation makes it possible to ensure correct taxation even in the case of cross-border engagements.

In this way, we can help to ensure equal conditions not only for Norwegian and foreign service providers, but also for foreign providers that report on their activities voluntarily and those that do not. We have begun a dialogue with the EFTA Surveillance Authority on how we can retain this reporting obligation as far as possible without breaking the rules on free movement of services in the EEA Agreement.

Mr President,

In order to ensure that the internal market functions properly, it is important that we do not fall behind with the work to incorporate EEA-relevant legislation into the EEA Agreement. This is vital in order to prevent a situation where there are different rules within the internal market. There is now a backlog of 561 legal acts, and that number is too high.

Reducing this backlog is a shared responsibility and requires a joint effort. We must ensure that we have effective, streamlined processes at the national level, and we need to cooperate closely with our EFTA partners. We are doing both.

The EU shares the responsibility for this work. This means that we need to maintain a close dialogue with the EU in order to prevent unnecessary delays in cases where we are seeking adaptations to the rules. We have therefore agreed with the Commission to focus on reducing the backlog of legal acts relating to the financial sector that still need to be incorporated into the EEA Agreement. This is important as these account for 259 of the total. We must maintain a continual focus on reducing this backlog, make sure that our national procedures are adapted as necessary, and play our part in ensuring that the process of incorporating relevant legislation into the EEA Agreement is efficient.

Mr President,

The negotiations on the EEA and Norway Grants for the period 2014-2021 are making good progress. So far, MoUs have been signed with eight countries: Romania, Slovakia, Bulgaria, Malta, Estonia, Portugal, the Czech Republic and Greece. Agreement has also been reached with Poland, Latvia and Lithuania on programme areas and allocations, but MoUs with these countries have not yet been signed. We still aim to finalise the negotiations with the remaining countries before the end of the year.

The funding provided under the MoUs that have been signed so far will, among other things, be used to support growth and innovation through various programmes for business development, research and education. This funding amounts to more than EUR 250 million.

Norwegian agencies such as Innovation Norway, the Research Council of Norway and the Norwegian Centre for International Cooperation in Education will provide expert advice to the programmes, and will play an important part in the bilateral cooperation. A total of 18 Norwegian institutions are involved as technical advisers for various programmes.

Roma are still a marginalised group in several of the beneficiary countries of the EEA and Norway Grants. We have agreed with Romania, Bulgaria and Slovakia to include programmes specifically designed to enhance Roma inclusion and empowerment.

The Government will maintain its firm commitment to promoting the rule of law and democracy in Europe through the EEA and Norway Grants, and in cooperation with the EU. A robust, dynamic and independent civil society is the crucial element of any well-functioning democracy.

We are therefore concerned by developments in certain European countries where civil society is coming under pressure. The Government considers it vital that the EEA and Norway Grants are used to strengthen civil society in Central Europe. In the funding period 2014-2021, at least 10 % of the funding provided under the grants will go to NGOs. In the MoUs that have been signed so far, we have agreed on an amount that is well over this threshold.

The negotiations with Hungary have not been completed. We are insisting that management of the funding for civil society must be carried out independently of the beneficiary country's authorities.

Mr President,

This year, Norway holds the Presidency of the Nordic Council of Ministers. We see Nordic cooperation as a potential springboard for closer cooperation between Norway and the EU.

At the same time, a strong and effective EU is important for the Nordic region. We are now seeing renewed conviction in all the Nordic countries that a clear Nordic voice in the European debate is good for the region and good for Europe.

Let me mention one example. Digitalisation will be crucial for ensuring Europe's future competitiveness, and this includes the Nordic-Baltic region. Digital North, the Nordic-Baltic Ministerial Conference on Digitalisation, which was held in April this year, is a good example of Nordic-Baltic cooperation. At the conference, we reached agreement on a common Nordic-Baltic strategy for the next generation of mobile networks (5G).

We are pleased to see that joint Nordic-Baltic digitalisation solutions are attracting interest in the rest of Europe, and are influencing EU policy development.

We are seeing interest in Nordic solutions in other areas too, for example in the field of climate change and in the social sector.

The key strengths of our Nordic cooperation are its breadth, depth and the widespread support it enjoys. We have a common Nordic identity and a high level of trust that have been built up over time.

Mr President,

Europe today appears better equipped to address the challenges we are all facing.It needs to be, because the challenges are many. And, although important elections in the past year have shown that populism and extremism have a limited hold on the electorate, there is still discontent in several countries.

One of Europe's most important tasks in the time ahead will be to address the causes of this discontent. This can only be done through coordinated efforts at national, European and global level. As part of the internal market and a member of Schengen, Norway will contribute to these efforts.

It is essential that our partners develop their policies and societies on the basis of common values – on the principles of democracy and the rule of law. The developments we are seeing in countries like Hungary and Poland are therefore cause for concern.

Norway will continue to support civil society and promote the rule of law in these countries, not least through the EEA and Norway Grants. The Storting has expressed its support for this work, for example in connection with the launch of the white paper on the EEA and Norway Grants in 2012.

We are working systematically to strengthen our bilateral relations with key allies in Europe, as outlined in the white paper that was presented earlier this year on the future course of Norwegian foreign and security policy. Our new strategy for Norway's relations with the EU, which will be launched in early 2018, will draw on the visions presented in the white paper.

It is in Norway's interests to cooperate closely with the EU and to participate actively in the ongoing political processes in Europe. In order to promote Norwegian interests and at the same time contribute to positive developments both in Norway and in other European countries, we need to be actively involved. Cooperation in Europe is the best safeguard of our welfare, our security and our values.