A new study commissioned by the Norwegian Foreign Ministry shows economic links to the EU have a “huge democratic deficit”, paving the way for a reshuffling of Norway’s agreements through the European Economic Area (EEA) at a time fellow member Iceland is holding EU accession talks.
The review, unveiled yesterday (17 January), analyses the country’s agreements with the EU, focusing on the EEA, which brings non-EU members Iceland, Liechtenstein and Norway into the EU's internal market.
The study is to serve as a basis for a White Paper which is to be published next year and is expected to open a thorny national debate on Norway’s type of relationship with the EU, EurActiv has learned.
The 900-page study was commissioned in 2010 around the time when Iceland started accession talks with the EU. EurActiv understands this review was a response to Iceland's member application, since the accession of Iceland into the EU could change the structure of the EEA agreement.
“There was reluctance from Norway and Liechtenstein," an official familiar with the talks said, referring to keeping the current form of the agreement if Iceland is no longer a party to it.
Fredrik Sejersted, head of the EEA Review Committee, said Iceland’s EU accession talks “are part of the background we are looking into”, but insisted there are official signals from the EU and Norway that the EEA agreement “will continue”.
Its form, however, could change. The name of the review, “Outside and Inside”, explains Norway’s frustrations with the EU, Sejersted said. The EEA agreement is seen as a big national compromise.
“We are much more closely integrated in the EU, but there are no democratic rights,” he said. “This stands in the way of politics”.
"Norway has incorporated approximately three-quarters of all EU legislative acts into Norwegian legislation and has implemented them more effectively than many of the EU member states. At the same time, Norway is neither a member of the EU nor involved in the decision-making processes to any significant extent," the study reads.
Three EEA scenarios
Sejersted sees three likely scenarios for Norway:
- A continuation of the current agreement, the “inside outside” position, irrespective of Iceland’s admission into the EU.
- Norway would apply for EU membership – a scenario which has become less likely because of the EU’s spreading debt crisis, EurActiv understands.
- A much “looser” relationship between Norway and the EU, or “a crash of the agreement”, Sejersted said.
An alternative to the last scenario would be a Swiss-type membership, but Norwegians think that the Swiss model is not suitable for Norway.
“The Swiss model is more bureaucratic, it is slower and in the end, the country ends up implementing most of the legislation anyway,” Erlend Engh Brekke, of the EU-Norwegian consultancy The Brussels Office, told EurActiv.
“There are significant institutional differences between Switzerland and Norway in their relationship to the EU and their model does not work for us,” Sejersted said.
Switzerland, along with the three EEA countries, is a member of the the European Free Trade Association (EFTA), the intergovernmental organisation that promotes free trade and economic integration.
Lack of debate
The Norwegian document is widely seen as a basis for the beginning of “the most important political discussion in 20 years” on Norway’s status in the EU, putting forward both the idea of a loss of sovereignty and that of significant economic advantages.
“No one has been discussing this unique association between Norway and the EU. I think it is important also for the perspective it gives to other countries, because it shows how a country which is not a member state can coordinate its links with the EU,” Engh Brekke said.
“’We haven’t looked into the agreement because we are afraid it will collapse,” said the source familiar with the relationship. “Politicians have not gained anything by discussing EU membership or even the EEA, it is seen as a burden to discuss it”.
“There is a huge need for information in Norway and this review shows how lucky we are and that we should stick to it,” Paal Frisvold, leader of the European Movement in Norway, told EurActiv. However, Frisvold believes the EEA agreement would not be sustainable “the day Iceland joined the EU”, adding: “This would make the EEA fall apart”.
“The economic interests have been served through Norway’s participation in the internal market,” Sejersted said, although he added it is hard to isolate these economic benefits from the country’s national wealth. This does not make the Norwegian “special relationship“ with the EU a model for other countries, he added. “The price is a large democratic deficit”.
Norway has seen EU scepticism hit record highs in the past few years, with around 80% of the population against a possible future membership and around 50% against the existing EEA agreement. Negative sentiment has grown on the backdrop of a contagious economic crisis affecting all EU members and has fuelled support for the ruling coalition to postpone the debate on EU membership at least until the next parliamentary elections in 2013.
“The EEA Agreement was firstly seen as a transitory measure to Norway’s accession to the EU, needed to normalize the market and prepare it. No one would have thought it would last over 20 years,” said Erlend Engh Brekke of The Brussels Office. “The agreement works in practice and it is beneficial, but it has a huge democratic deficit.”
“Even if the form would change, the substance for linking Norway to the EU will continue,” said Fredrik Sejersted, chair of the EEA review committee. “There would have to be institutional negotiations, but we will keep the framework of what we have,” Sejersted added, referring to Norway’s system of implementing EU policies, its system of surveillance [EFTA Surveillance Authority] and control and its EFTA Court.
“This report shows that we are the biggest beneficiaries of the single market, that the EU affects all areas of our lives, but that the democratic deficit is much higher than we expected,” Paal Frisvold, leader of the European Movement in Norway said.
- 19 Jan. 2012: Official launch of the review in Brussels
- 2013: Parliamentary elections in Norway