The future of the EEA agreement

Ladies and Gentlemen,

While talking here today the context is one in which Europe is faced with one of its most serious challenges in the post-war era. We have Russia challenging the very foundation of cooperation in Europe through its illegal actions in Ukraine. And we have migration from the south and south-east putting European cooperation to an immense test in addressing this problem in a comprehensive way, based on the idea of burden-sharing. In this we know Iceland is contributing significantly already, and Norway is on its way too. 

For Norway this highlights the ever increasing importance of working closely with our European partners. For Europe’s borders are our borders. And Europe’s values are our values.  And solidarity with our partners and the challenges of our continent remains a core Norwegian principle.  

The EEA Agreement is a key pillar of this cooperation. It underlines our strong interest in a strong, free, fair and open market in Europe, to the benefit of our peoples. Norway benefits from this every day. 80% of our export goes to the EU and 65% of our import come from the EU. They are by far our biggest trading partner, and we rate 5^th on their list.

In 2013 we received 192 000 labour migrants from the EEA-countries, that is 7% of our labour force. Many of these end up in rural areas, where local industry is totally dependent on them for their survival and that of the surrounding municipalities. It is difficult to overstate their importance to the Norwegian economy.

We must in this context also mention Erasmus+, a programme providing opportunities for over 4 million Europeans to study, train, gain work experience and volunteer abroad, binding our continent together, creating Europeans. 22500 Norwegians have been abroad under this programme and its predecessors since 1995. Thousands have also come our way.   

When discussing the future of the EEA Agreement we must also recognise what it has delivered so far. It has existed for more than 20 years, and it is no secret that this coincides with a period of significant growth for the continent as a whole. For Norway these years have been marked by a highly favourable economic development, after a slump in the early 90’s, with all indicators since pointing in the right direction:

• An increase in GDP of around 50 %
• An increase in employment of around 500 000 people (25%)
• And a reduction in unemployment from around 6% in 1993 to 3,7 % at the end of 2014

While we may attribute this to many factors, also beyond the EEA, it seems an undisputed fact that the barriers brought down in this process, both to trade, research, labour and other mobility, have all contributed significantly to the growth of our economies ever since. All graphs have pointed upwards for more than two decades.

This is the backdrop that must be remembered when starting to look into the crystal ball, the future. Our economic integration through the EEA.

It has in many circles in Norway been a favourite pastime to bad mouth the EEA Agreement, for various reasons. The opponents of closer integration with the rest of Europe may have felt this was one step towards what was most dreaded by them, namely membership. One the other side of the spectrum the people arguing in favour of membership felt the EEA Agreement was more an obstacle to achieving their objective, a case of a glass half empty rather than half full.

As a result very few have spoken out in its defence. An explanation for this may be that in Norway the EEA Agreement has represented the lowest common denominator, what all sides could live with a national compromise –  safe guarding our economic interests.  But few saw it as the optimal solution they may have wanted. This situation is now coming back to haunt us a little bit – it is now crucial that we remind ourselves of what we have.

When coming to power in October 2013 this government set out to make Europe a priority, after an eight-year period where our predecessors in office to a great extent had neglected our own continent, neighbours, friends, allies and main trading partners. As a consequence also the EEA Agreement had suffered, with a growing backlog of legal acts and a culture of relative indifference also seeping into parts of our bureaucracy.

We appointed Norway’s first ever Minister for Europe, correctly referred to as the Minister of EEA and EU Affairs, Mr Vidar Helgesen. We have a clearly defined European Strategy. We have a rather detailed accompanying Work Programme, spelling out how the strategy should be put into practice, where to focus our efforts and with benchmarks for progress going forward.

A key new development is the establishment of a government Council on European Affairs, convening monthly at minister’s level, in differing configurations depending on the topics at hand. The main ambition herein is defining more clearly and more quickly Norwegian positions on the key policy issues facing Europe and being discussed in Brussels at any given time. This isbased on the realisation that there is scope for working more closely with the Commission and Member States on policy formulation in the pre-acqui stage. Pro-active rather than just reactive. In addition this is a key instrument to address the number of EEA-relevant legal acts not yet taken into the agreement - the so-called “backlog” - as the ministers provide a status update on “their” pending legal acts.

Still, we politicians also need to realise that beyond policies, strategies, programmes and procedures what it ultimately comes down to is our commitment to making this European policy work. Our predecessors in office frequently talked about their active European policy. But when ministers neither take part in informal ministerials in the EU, nor actively seek to engage with Europe on our many issues of common concern, words ring hollow. Also in this respect we aim to be different.

While underlining the centrality of the EEA Agreement to our European policy, and how it has served us well, one must keep in mind that this is an agreement in need of constant care. Since its creation the ratio of EU-members to non-members has changed dramatically in Brussels favour. That, coupled with the inherent structural fact that amending legal acts after they’ve been sanctioned by the EU-28 is an uphill struggle, does indeed put us at a disadvantage. The EEA agreement requires that Norway, and our partners Liechtenstein and Iceland, should be consulted in the early stages of EU decision-making. But we are merely consulted. The EU is under no strict obligation to listen. We have to work hard to make our voice heard.

A parallel challenge is the fact that the extent of knowledge and understanding of the EEA Agreement is waning, while the responsibility of emphasising its importance to all its 31 members rests increasingly on the EFTA-3. One thing is us knowing the value of our participation in the internal market. It is another to convey this to an at times increasingly introverted EU. This needs to be addressed too.

Accepting this fact of mutual benefit stemming from our participation, it follows logically that its future existence requires a common effort.  And this is indeed a core message from our side whenever this agreement is on the agenda. All parties need to work together, in the interest of all. 

But, what must not be lost upon us in doing this is the equally heavy burden hanging over us three on the outside to make this work. Article 1 of the agreement spells out clearly the ambition of creating a homogenous European Economic Area, with equal conditions of competition. Today we have approximately 420 EEA-relevant legal acts that are part of EU-legislation but not in our three countries. We must admit that this number is too high. We are constantly reminded by our private sector of how crucial this is to their work, and how some of them have suffered as a result of this backlog. In this picture we need to remind ourselves of the obvious fact that our companies depend relatively more on a market of 28 than companies of the 28 depend on the three of us.

A key element in the EEA Agreement is also the principle of unanimity. No legal act is taken into the agreement in the absence of consent from all three of us, Iceland, Liechtenstein and Norway alike. In reality it gives each of us a veto which not only affects ourselves but also our EEA partners. Legal acts held up by one of us today, may harm the economies of all three, as we speak. This is a reality that I believe we all need to reflect on more carefully than we do, when we tend to get bogged down in our own domestic concerns. A responsibility rests on all of us that reach beyond our own borders – we need to have our common interest in mind.

Are we doing enough? I believe “enough” is always a difficult word to justify using, and this case is no exception. As long as the various backlogs exist, we cannot say that the market is entirely homogenous, which means we can and must do more.

Looking into the future I repeat what I said initially – this agreement has proven its worth over a long time. No matter what critics say, it has delivered prosperity and stability. Any talk of its demise therefore will need to address the question of better alternatives.

From a Norwegian perspective I see none. The domestic debate likes to spell out the Swiss model as one alternative. Well, does this model even exist, or is it about to expire? Looking at the negotiations going on between Berne and Brussels I believe the answer to that is a no. Others point to the EFTA Free Trade Agreement of 1973, still in place. But does this serve the interests of our ever more sophisticated private sectors, let alone the wishes of a mobile population and work force? I believe the answer is a resounding no. Then there are those who look further afield, for example to South Korea. Again, we are talking about agreements that leave out key elements while including others, like agriculture. Hard to imagine that model finding traction in my country, and may I assume the same also here in Iceland? As membership, my party’s preferred option, is off the table while public opinion stands firm at 70 per cent opposing EU membership, we come back to start – whether we like it or not. As my minister put it during a speech last week “If you can’t have the one you love, love the one you have”.

So, ladies and gentlemen, I have given you the conclusion. The EEA Agreement must be deemed fit for the future, and we will have to do all in our powers to preserve it.  This is not an “a la carte” agreement, where we can allow ourselves to pick and choose. And it obliges all three alike. Any hesitance along this route will primarily hurt ourselves, our own companies and citizens, rather than anyone else. As long as the agreement is in effect we owe it to them, and our EEA partners, to observe it diligently.

Thank you.