2548-EEA single market-09_EFTA BULLETIN 23/08/12 16:03 Page1

EFTA BULLETIN THE EUROPEAN ECONOMIC AREA AND THE SINGLE MARKET 20 YEARS ON

SEPTEMBER 2012 Signing of the EEA Agreement 2548-EEA single market-09_EFTA BULLETIN 23/08/12 16:03 Page2

The European Economic Area and the Single Market 20 Years on

• Editor Tore Grønningsæter

• EFTA Secretariat contributors Trine Berggren Anders Kjellevold Michelle Kruger Patrick Lemp David Sidler Marius Vahl Ghislaine Weder

• Copy Editor KHinze Ltd

• Printed by Drifosett, Brussels Layout by Orangemetalic

• Printed September 2012

Photos by EFTA if not otherwise indicated. Cover picture: iStockphoto Further copies of this issue are available free of charge by contacting [email protected]

Editor’s note: The EFTA Secretariat would like to thank all external authors for their invaluable contributions to this issue of the Bulletin. The views expressed are not necessarily those of the Secretariat. 2548-EEA single market-09_EFTA BULLETIN 23/08/12 16:03 Page3

FOREWORD

Signing of the EEA Agreement

Agreement remains the basis of their cooperation with the EU. Both academic and political assessments have shown that the Agreement is efficient in ensuring homogeneity in the Internal Market. Few would contest that it has proved to be a durable instrument of integration in Europe. The 20 years anniversary is therefore well worth celebrating.

This issue of the EFTA Bulletin is published 20 years At the same time we must acknowledge that there are after the signing of the Agreement on the European challenges. The Agreement was a compromise to Economic Area (EEA). Two decades have passed since enable participation in the Single Market of both the EEA EFTA States joined the European Community members and non-members of the EC. A truly (EC) in an effort to complete the Single Market. The integrated market with homogeneous rules requires the anniversary represents an opportune occasion to continuous dedication of EEA EFTA States to review the past, take stock of the present, and look into incorporate Single Market legislation. Furthermore, the future of the EEA. the amount of legislation covered by the Agreement, and hence the impact, has increased manifold since the When the EEA Agreement was signed on 2 May 1992 inception of the EEA. However, the vast majority of in Porto, Portugal, it constituted one of the major EEA legislation is of technical nature. While it has a political events of the year in Europe. Not only was it real and wide ranging impact on ordinary people’s the most comprehensive trade agreement in Europe up daily lives, most of it is uncontroversial, and passes until that point. It also marked the most significant step under the political radar. towards the realisation of a genuine Internal Market, an idea originally conceived in the 1950s with the The last few years have seen renewed interest in the creation of the EC. The new economic zone that was EEA Agreement. A comprehensive review of laid out in the Agreement comprised all the major Norway’s relationship with the EU was published economic powers of Western Europe. earlier this year with considerable press coverage. Also, the EU is currently working on a report But Europe has changed drastically since 1992. The examining the functioning of the Agreement. EC became the European Union (EU) in 1994, and has since undergone profound institutional reform and Although the Agreement is 20 years old, the idea of an grown considerably in both membership and scope. At Internal Market is much older. Completion of the the same time, EEA EFTA membership has dwindled. Single Market has been the goal of European Following a referendum, Switzerland withdrew from integration ever since the creation of the European the Agreement only a few months after the signing, Community in 1957. The process gained momentum in while Austria, Finland and Sweden acquired full the 1980s, mostly due to the efforts of the President of membership of the EU in 1995. Of the seven EEA the European Commission, Jacques Delors. The Single EFTA signatory states, three remain. European Act in 1986 set a clear objective of completing the Single Market. Subsequent policy EEA membership provides invaluable access to the initiatives have been important for driving the process Single Market for the EEA EFTA States. Despite the forward. The first part of the Bulletin gives an account many changes in Europe since its inception, the of these developments. 2548-EEA single market-09_EFTA BULLETIN 23/08/12 16:03 Page4

Looking back, we can state that the EEA Agreement Parliamentarians and social partners have contributed has been successful in its mission to foster economic significantly to the success and legitimacy of the integration in Europe. The general consensus is that the Agreement through the EFTA Parliamentary Agreement is working as intended, and a revision is Committee and the EFTA Consultative Committee. not on the political agenda. It is important nevertheless Two longstanding Committee members give their that we continue to critically assess the functioning of personal views on the 20 years of the EEA and its the EEA. Studies can help to improve the operation of future challenges. the Agreement and support future political debates. Discussions on the EEA benefit from informed The final pages contain statistics to illustrate various analysis of both the strengths and the weaknesses of elements of the EEA Agreement, including trade in the Agreement. Three articles, penned by authors from goods, mobility of persons, financial contributions by each of the three EEA EFTA States, offer different EEA EFTA States and the volume and character of the perspectives on the functioning, current challenges, legal acts incorporated into the EEA Agreement. and future of the Agreement.

The EEA does not exist in a vacuum. As previously mentioned, the EU has changed profoundly since 1992 Kristinn F. Árnason and the dynamic nature of the EU poses specific Secretary-General challenges to the Agreement. This issue is addressed in the contribution by researchers from the Centre of European Policy Studies, which discusses whether the EEA needs a strategy to adapt to the changing circumstances. 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page5 TABLE OFCONTENTS Selected Reports andOpinions Reports Selected Halldór Grönvold A DrivingForce for Decades 32 Svein RoaldHansen to Studyand New Opportunities Work AND EUROPEANINTEGRATION THE EFTA ADVISORY BODIES Jacques Pelkmans andPhilipp Böhler Towards 13 aMore Strategically Focused EEA? Ulf Sverdrup EEAisFunctioning “The Well.” True orFalse? Christian Frommelt An AssessmentoftheFunctioning oftheEEA 6 Eiríkur Bergmann 6 Iceland’s Position intheEEA AND CHALLENGES THE EEA: STRENGTHS, WEAKNESSES Constructing theSingleMarket SINGLE MARKETACT MARKET TOCOMMON THE FROM THE 35 33 26 22 18 13 37 iprte 45 44 46 42 38 Liechtenstein andNorway Erasmus StudentMobility: Iceland, Disparities ofEconomicReduction andSocial Agencies 38 Participation inEUProgrammes and 43 Breakdown ofLegal into Acts Policy Areas EEA Agreement Incorporation 41 ofLegal into Acts the Migration Figures for Iceland andNorway and Norway Merchandise Trade: Iceland, Liechtenstein EEA INFIGURES 5 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page6 6 EFTA BULLETIN 2012 Thecoordinationoftheeconomicpolicies • • Thelaunchofcommonagriculturalandtransport • Constructing theSingleMarket THE SINGLEMARKETACT FROM THE COMMON MARKET TO • A customsunion; • A freetradearea; • accomplished bythecreationoffollowing: establishment ofaCommonMarket. This wastobe European EconomicCommunity, calledforthe The 1957 Treaty ofRome, whichestablishedthe Common Market The Treaty ofRomeandthe the Single Market and the Monetary Union. the SingleMarket andtheMonetary signing ceremony inPorto, 1992. isoften Delors regarded asthefather ofboth President oftheEuropean Commission speakingat JacquesDelors theEEA Member States. Market” competition shallnotbedistortedintheCommon “The establishmentofasystemensuringthat policies; and capital” obstacles tothefree movementofpersons,services “The abolition,asbetweenMemberStates,ofthe ; and ; and therequirementofunanimity. with the“old”regulatoryapproachofharmonisation Common Marketwasalsoslow, owingto problems In otherareas,progresstowardscompletionofthe European economy. 1980s, furtherexacerbatedtheproblemsof developed worldfounditselfinthe1970sandearly economic situation,asituationinwhichmuchofthe non-tariff barriersasaresponse tothedifficult 1971 andtheoilshockof1973. The increasinguseof break-up oftheBretton Woods monetarysystemin continuous growthended,triggeredinparticularbythe From theearly1970sonwards,however, thisperiodof two decadesfollowingtheendof World War II. to thehighgrowthratesseenin Western Europeinthe Tariffs and Trade inthelate1940s. This hadcontributed since theestablishmentofGeneral Agreement on of thereductiontariff barriers onindustrialgoods third countries. This swift progresswaspartlyasaresult had alsoadoptedacommonexternaltariff fortradewith 18 monthsaheadofschedule.Bythesamedate,Europe and phasingoutinternalcustomsendedon1July1968, expected. The transitionalperiodforenlarging quotas The customsunionwascompletedmorequicklythan stages offouryearseach. (i.e. bytheendofDecember1969),dividedintothree progressively duringatransitionalperiodof12years The CommonMarketwouldbeestablished June 1985(the White Paper). Completing theInternalMarket Market by1992. The Commission’s White Paper, make ithismainprioritytocompletetheInternal from theEuropeanCommunity(EC),hedecidedto January 1985.Followingconsultationswithleaders Jacques DelorstookoverasCommissionPresidentin European Act The 1992Project andtheSingle , wasadoptedon14 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page7 recognition inCommunitylaw. of Justice,whichestablishedtheprinciplemutual 1979 CassisdeDijondecisionoftheEuropeanCourt fundamentally newapproachwasmadepossiblebythe Community actioninthefirst25years” approach [whichhadbeen]thecornerstoneof the perceivedshortcomingsof recognition andequivalence”. This wasaresponseto concept ofharmonisationtowardsthatmutual technical barrierstotradewas“moveawayfromthe A keyelementoftheCommission’s approachto cooperation andtheapplicationofCommunitylaw. labour, servicesandcapital,aswellindustrial covered variousareassuchaspublicprocurement, The numerousmeasurestoremovetechnicalbarriers fiscal barrierstargeted valueadded taxandexciseduties. control ofgoodsandindividuals,whilethoseconcerning measures toremovephysicalbarrierspertainedthe technical andfiscalbarrierstothefourfreedoms. The timetable ofaround300measurestoremovephysical, The 1985 White Paperproposedaprogrammeand Where itallstarted. Signingofthe Treaty ofRome, 1957. “harmonisation . Sucha genuine singlemarket. exploitation ofeconomiesscalemadepossiblebya removal ofbarrierstointernaltradeandthe product (GDP),mainlythroughsavingsmadebythe would addaround5%totheEC’s grossdomestic concluded thatthecompletionofInternalMarket Cecchini Report-wascompletedin1988. The Report Internal Marketand“thecostofnon-Europe”-the A majorstudyonthebenefitsofcompleting ThedevelopmentofEuropeanstandardsadoptedby • A newapproachtolegislativeharmonisation,which • An assessmentforeachinitiativetodetermine • components: The newstrategyontechnicalbarriershadthree qualified majorityvoting(QMV). harmonised standards;and safety requirements,i.e.minimumratherthan was restrictedtolayingdownessentialhealthand was not,mutualrecognitionwouldapply; whether ornotharmonisationwasrequired.Ifit © Photo: European Commission 7 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page8 8 EFTA BULLETIN 2012 facilitating thecompletionofSingleMarket. European Act enteredintoforceon1July1987, cooperation withtheEuropeanParliament. The Single achieved bymoreQMV intheCouncil andgreater in linewithPresidentDelors’ deadline. This wastobe European Marketbytheendof1992(theproject) 1986 andsettheobjectiveofcompletingaSingle Single European Act, whichwassignedinFebruary major revisionofthe Treaty ofRome. This ledtothe conference withaviewtowhatwouldbethefirst European Councillaunchedanintergovernmental changes totheEuropeanCommunity. InJune1985,the December 1984,hadproposedsignificantinstitutional which waspresentedtotheEuropeanCouncilin subject werealreadyunderway. The DoogeReport, Paper washelpedbythefactthatdiscussionsonthis The shifttowardsQMV proposed bythe1985 White of exchangecontrolsandnationalpreferences,the full liberalisationofcapitalmovementsbytheremoval abolition ofchecksongoodsatinternalfrontiers,the the 1985 White Paperhadbeenadopted,includingthe Act. Morethan90%ofthelegislativeactsproposedin January 1993,asscheduledbytheSingleEuropean The SingleMarketwaslaunchedformallyon1 Completing theInternal Market participation intheInternalparticipation Market. Frontiers”, EFTA issuedaBulletindedicated to thefirstdecadeofEEAEFTA Following theEuropean Commission’s 2003publication “Ten Years Without network industriesandpublicservicesectors. included inthe1985 White Paperincluded,notably, relating totheSingleMarketinservicesthathadnotbeen the MemberStatesandCommunity” issue whichaffectstheintegrationofeconomies “ harmonisation oftaxregimes. This wasbecausethe and therehadbeenverylimitedprogresstowardsthe been removed,transportserviceshadnotliberalised Member States.Inaddition,controlsonpersonshadnot transposed orimplementedintheEuropeanUnion(EU) of theadoptedlegislationhadnotactuallybeen mean thattheSingleMarkethadbeencompleted.Much Despite thesewatersheddevelopments,theydidnot European intellectualpropertyrightslaws. services, aswelllayingthegroundworkfor Market inroadandairtransportfinancial movement ofservices,pavingthewayforaSingle regard tothefreedomofestablishmentandfree introduced. Furthermore,progresshadbeenmadewith mutual recognitionwithregardtodiplomas workplace hadbeenadoptedandtheprincipleof plant healthlaw. Regulationsonworkandhealthinthe introduction ofahorizontalapproachtoveterinaryand opening upofpublicprocurementmarketsandthe 100 measurestobeintroducedbytheendof1999. To addresstheseissues, the Action Plan proposedaround implementation andenforcementofexistinglegislation. economic convergence andcohesion,overall in particularwithregardtosocialpolicy, employment, full potentialoftheSingleMarkethadnotbeenrealised, between 300000and600jobs.Italsofoundthatthe between 1.1%and1.5%ofGDP andthecreationof employment inEuropebyanincreaseincomeof contributed significantlytogrowth,competitivenessand main conclusionwasthattheSingleMarkethad culminated inthe1997SingleMarket Action Plan.Its The firstcomprehensivereviewofthe1992project The2007SingleMarketReview • The2003InternalMarketStrategy • The1999StrategyforEurope’s InternalMarket • The1997SingleMarket Action Plan • by theEUMemberStates. These are: proposed bytheEuropeanCommissionandapproved driven subsequentlybyaseriesofpolicyprogrammes The processofcompletingtheSingleMarkethasbeen Reviews Plan,Action Strategies and White Paper[was]notintendedtocovereverypossible . Keyissues 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page9 “enhance efficiencyofproduct andcapitalmarkets” stream ofpolicyinitiativesandsecondarylegislationto central insubsequentpolicyprogrammes. A steady main focusofthe1985 White Paperandhasbeen The freemovementofgoodsandserviceswasthe Progress ontheFour Freedoms the period1992to2006andanextra2.75millionjobs. per head,correspondingtoa2.15%increaseinGDP in resulted inanincreasewelfareofmorethanEUR500 Single MarketReviewfoundthatthehad wealth. A similarstudyundertakenaspartofthe2007 2.5 millionextrajobsandaddedEUR900billionin Frontiers beginning of2003,thestudy, assess thebenefitsofSingleMarket.Finalisedat Market, theCommissionundertookamajorstudyto On thetenthanniversaryof“completed”Single accessible, bettercommunicatedandenforced. network-based andlesscentralised,more evidence-based, impact-drivenandtargeted, more stated aimwastomakeSingleMarketpolicymore the useofadiversesetpolicyinstruments. The through thedevelopmentofnewworkingmethodsand improving thegovernanceofSingleMarket than 30measureswereintroduced,focusedon governance principlesfortheSingleMarket.More and morecomprehensivebysettingoutnew previous SingleMarketstrategies,bybeingbroader represented anapproachsomewhatdifferent fromthe The SingleMarketReviewadoptedinNovember2007 at completingtheSingleMarket. strategy paperscontainednumerousnewactionsaimed Single Marketstrategy, adoptedin2003.Boththese strategy forEurope’s SingleMarketandathreeyear This wasfollowedinNovember1999byafive-year On theoccasionof20 “What doestheSingleMarket meanto YOU?” European Commission launchedacompetition amongpeoplebornin1992: , estimatedthattheSingleMarkethaddelivered th anniversary oftheEuropeananniversary SingleMarket, the Ten Years Without have beenintroducedtoprotectcopyrightsinanattempt been uneven.Ontheonehand,anumberofmeasures In relationtointellectualpropertyrights,progresshas which enteredintoforcein2010. so-called GoodsPackageonthemarketingofproducts, (REACH), whichenteredintoforcein2007,andthe Key initiativesincludetheRegulationonchemicals which havebeenaidedbydevelopmentsintechnology. areas ratherthantargeting onlyspecificsectors),allof more horizontalissues(i.e.pertainingtoallpolicy revisions oflegislation,bothinspecificsectorsandon series ofimportantnewinitiativesandregular obstacles remained. These havebeenchallengedbya realisation byJanuary1993,althoughnumerous The freemovementofgoodshadcomeclosestto Free movementofgoods have beenproposedandadoptedsincetheearly1990s. ensuring] highqualitynetworkindustries” goods …theintegrationofservicesmarkets[and (1997) andthusfacilitating (1999) byremoving website fortheproject. Commission produced anexplanatory brochure in2006andsetupadedicated To oftheBetter Regulation agenda, emphasisetheimportance theEuropean “remaining andnewbarriers” “the free movementof (2003) 9 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page10 10 EFTA BULLETIN 2012 and “servicesofgeneraleconomicinterest”. achieved asregardsmeasurestoopenuppublicutilities implemented attheendof2009.Lessprogresshasbeen 2006, followingacontentiousdebate,andfinally Directive wasadoptedinamodifiedversion First proposedbytheCommissionin2004,Services These werefollowedbyageneraldirectiveonservices. further measurestobeimplementedwithinfiveyears. Financial Services Action Planwithmorethan40 services. InMay1999,theCommissionproposeda towards creatinganintegrated,singlemarketfor stages fromthe1990sonwardswasfirststep transport, energy, postandtelecommunicationsin The liberalisationofvariousnetworkindustriessuchas Single Marketinthelasttwodecades. arguably beentheprincipalgoalinevolutionof developing theInternalMarketforserviceshas only aroundone-fifthofintra-Europeantrade.Indeed, employment inEurope,tradeservicesaccountsfor approximately two-thirdsofwealthcreationand movement ofservices. Although servicesaccountfor Progress hadbeenconsiderablysloweronthefree Free movementofservices been abletoreachagreementonanEUpatent. develop anEUpatent,theMemberStateshavenot despite numerousattemptsfromthe1970sonwardsto to combatcounterfeitingandpiracy. Ontheother, Iceland; Veli Sundbäck, Finland; Prince Nikolaus, Liechtenstein; andManfred Scheich, Austria. Foreign Affairs, Austria; row: Second Eivinn Berg, Norway; Franz Blankart, Switzerland, Frank Belfrage, Sweden; Secretary-Gener and Minister ofForeign Affairs, Liechtenstein; Wolfgang Schüssel, Minister ofEconomic Affairs, Austria; Birgitt Ederer, State Foreign Trade; JónBaldvinHannibalsson, Minister ofForeign Affairs, Iceland; Pertti Salolainen, Minister ofForeign Affairs, Jean-Pascal Delamuraz, Swiss Federal Councillor incharge oftheFederal forEconomic Departement Affairs; UlfDinkelspiel, Dep EFTA Ministers andChiefnegotiators preparing forthesigningofEEAAgreement in1992. First row from left: Bjørn Tore Go dimension oftheSingleMarket consumers throughastrengtheningofthesocial The growingprominenceattachedtocitizensand from thefollowingdevelopments: development oftheSingleMarket,whichisevident prominence ofhorizontalapproachestothe One keyfeatureofEUpolicyisthegrowing Horizontal Approaches professional qualifications. other measurestopromotethemutualrecognitionof right tomoveandresidefreelyintheEU,aswell Working Time Directiveandthe2004on the 1996Postingof Workers Directive,the2003 the freemovementofpersons.Keyinitiativesinclude free movementofworkersinthe1985 White Paper, to is highlightedbythechangeinterminology:from extension oftherightsworkerstoallcitizens. This policy programmes. A centralaimhasbeenthe constitute anotherpriorityinthevariousSingleMarket Measures toensurethefreemovementofpersons Free movementofpersons Single Marketpolicyagenda. commerce hasbecomeincreasinglyprominentonthe establishment ofaregulatoryframeworkforelectronic In lightoftechnologicaldevelopments,the Finland; HansBrunhart, HeadofGovernment Secretary, Austria; AloisMock, Minister of dal, Minister ofForeign Affairs, Norway; al Georg Reisch, EFTA; HannesHafstein, uty Minister forEuropeanuty Affairs and 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page11 measures includedtheintroductionofmandatory adoption oftheBetterRegulationagendain2005.Key initiatives havebeentabled,culminatinginthe In relationtotheregulatoryregime,aseriesof arrangements forexciseduty. the 2008Directiveconcerninggeneral from 2003,theso-called VAT Directiveof2006and Energy Taxation andSavings Tax Directives,both measures havesincebeenadopted,includingthe principal aimsofthe1985programme. A numberof The removaloftaxbarrierswasonethethree agenda setoutinthe1985 White Paper. regulatory regimeandtheimplementationoftax be seenfromthemeasurestakentosimplify promote innovationintheEuropeaneconomy, ascan There hasbeenanincreasingfocusontheneedto The increasedemphasisonfacilitatingbusiness efficient, low-carboneconomy. climate changeandtransformingitselfintoanenergy- energy andclimatechangepackage aimedatcombating scheme in2005.In2008,theEUadoptedanambitious respect, leadingtothelaunchofanEUemissionstrade climate changehavebecomeacentralelementinthis Europe’s InternalMarket.Growingconcernsabout three oftheareashighlightedin1999Strategyfor public procurementorfinancialreporting,whichare of allSingleMarketmeasures,beitstandardisation, These factorshaveincreasinglybecomeanintegralpart change The growingfocusontheenvironmentandclimate Schengen Agreement. regard totheremovalofinternalbordersthrough justice andhomeaffairs policies,mostnotablywith have inturnbeenbolsteredbythedevelopmentofEU and dialoguewithstakeholders. These developments dialogue byintroducingnewmeasuresofconsultation flexibility andsecuritytoreinforcethesocial rights, topromotelabourmobilitywhilebalancing include aseriesofmeasurestostrengthenconsumer efforts torealisethefreemovementofpersons,which These developmentsarelinkedstronglywiththe Paper –withSingleMarketpolicy. policy –whichwasnotcoveredinthe1985 White integration ofEUsocialandconsumerprotection citizenship bytheMaastricht Treaty andthegradual This ispartiallyowingtotheintroductionofEU European Economic Area (EEA)werelaunchedin Association (EFTA) Statesonthe creation ofa Negotiations withsevenEuropeanFree Trade the agendabeforelaunchofSingleMarket. The externaldimensionhad,however, alreadybeenon Eastern Europe. States inMay2004,primarilyfromCentraland in 1997andledtotheaccessionof12newMember most substantial:negotiationswerelaunchedformally enlargements, mostnotablythefifth,whichwas This hasprimarilybeenanissuerelatedtoEU of theSingleMarket The continuedrelevanceoftheexternaldimensions guidelines andself-regulation. “soft law”measuressuchastargets, benchmarks, instruments, includingthegrowinguseofvarious been theincreaseduseofamorevariedsetpolicy and homeaffairs policy. Another consequencehas economic reformsatthenationallevelandjustice cover otherareasofEUactivity, includingstructural Single Marketinitiativesandlegislativemeasures established bytheMaastricht Treaty. As aresult, decision-making proceduresacrossthethreepillars – havefacilitatedthisapproach,byharmonising reforms –the Amsterdam, NiceandLisbon Treaties the MemberStatesin2000.Successivetreaty strengthen economicpolicycoordinationbetween in 1999andthelaunchofLisbonStrategyto establishment oftheEconomicandMonetaryUnion This hasbecomemoresignificantfollowingthe economic policyagenda The increasingimportanceoftheEU’s broader Market Review. as oneoftheinitiativesproposedunderSingle Small Business Act wassubsequentlyadoptedin2008 Market tothesameextentaslarger companies. A regarded asnothavingbenefittedfromtheSingle businesses andemploymentinEurope,butareoften sized enterprises,whichcomprisealarge majorityof These measuresincreasinglytarget smallandmedium- reduce theadministrativeburdensonbusinesses. programmes tosimplifySingleMarketlegislationand States onSingleMarketissuesandvarious better coordinationwithandbetweentheMember development ofSingleMarketpolicyandlegislation, extensive useofpublicconsultationsinthe impact assessmentsofnewlegislativeproposals,more 11 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page12 12 EFTA BULLETIN 2012 citizens’ assistanceservicesintoasinglegateway. and sectormonitoring,theconsolidationofvarious consumer scoreboard,anewmethodologyformarket the SingleMarket,includingcreationofa introduced furthertoolstoimprovethegovernanceof authorities. The 2007SingleMarketReview misapplication ofInternalMarketlawbypublic to handlequestionsandcomplaintsregardingthe solving networkwasestablished.SOLVIT’s purposeis regulations. In2002,theSOLVIT onlineproblem- internet shopforinformationonallSingleMarket coordination centresintheMemberStatesandan These includedtheestablishmentofSingleMarket Market Action Planwereintroducedsubsequently. Market governanceproposedbythe1997Single A numberofadditionalmeasurestoimproveSingle later loweredto1%. transposition deficittarget of 1.5%wasintroduced, introduced bythe1999Strategy. An ambitious broader annualcycleofmonitoringandreview Single Market. The Scoreboardwassupplementedbya doubled inthetenyearsfollowinglaunchof number ofopeninfringementcaseshadmorethan 65% ofdirectiveswerefullyoperationalandthe Market legislationbytheMemberStates.In1997,only Commission monitorsthetranspositionofSingle Internal MarketScoreboardin1997,wherebythe Another keydevelopmentwastheestablishmentof policy ismade. altered profoundlythewayinwhichSingleMarket extensions ofthecodecisionprocedure. This has strengthened considerablythroughsuccessive Parliament inthedecision-makingprocesshasbeen At thepoliticallevel,roleofEuropean Single Market. of theopportunitiesprovidedbyaEurope-wide citizens andbusinessesareabletotakeadvantage legislation isimplementedandenforcedthat development ofvarioustoolsthatensuretheadopted considerably sincetheearly1990sthrough The governanceoftheSingleMarkethasevolved Governance oftheSingleMarket Turkey andtheEU. with theestablishmentofacustomsunionbetween Liechtenstein andNorway. This wasfollowed in1995 Market tonon-EUMemberStates,currentlyIceland, has allowedfortheextensionofEU’s Single 1990. The EEA Agreement, whichwassignedin1992, achieving this. of theSingleMarketisonekeyinstrumentsin to promotegrowthinEuropeandthatthecompletion EU atthetimeofwritingisthatmoreneedstobedone issues raisedintheMontiReport,consensus Although subsequentactionshavetackledmanyofthe more comprehensive“re-launch”oftheSingleMarket. addressing theseissues,theMontiReportproposeda President Barrosoinautumn2009. As wellas links” intheSingleMarket,requestedbyCommission remove existingbottlenecksandfillinthe“missing Monti Reportof2010,whichwasastudyonhowto Single Market. These wereinlarge partinspiredbythe include hundredsofmeasurestofurtherdevelopthe Europe 2020strategy, andtheSingleMarket Act financial services,thesevenflagshipinitiativesof However, thenumerousactionstakenregarding economic policy. Monetary Unionandthecoordinationofnational and economiccrisishavefocusedontheEconomic major initiativestakenbytheEUtocounterfinancial coordination, hasbeenstrengthenedfurther. Mostofthe and MonetaryUnionwithnationaleconomicpolicy merges measuresfortheSingleMarketandEconomic horizontal approachtoeconomicpolicymaking,which the EU. The trendtowardsamorecomprehensiveand to considerablechangesintheeconomicgovernanceof in 2009,theEU’s responsetotheeconomiccrisishasled Facilitated bytheentryintoforceofLisbon Treaty Re-Launching theSingleMarket Almunia, Vice-President oftheEuropean Commission, in2011. of Italy, discussinghisreport “A NewStrategy fortheSingleMarket” withJoaquin Mario Monti, formerMemberoftheEuropean Commission, now Prime Minister © Photo: European Commission© Photo: European Commission 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page13 cover anyspecificpolicyareas). Whatever unitof acquis communautaire(chapters34and35donot out ofthe33chapterscoveringEUlegislation, Iceland alreadyparticipateseitherfullyormostlyin23 membership negotiations. according tothe35chaptersEUusesduring involvement, itisbeneficialtomapitsparticipation Market, asdictatedbytheEU. To understandIceland’s with thelawsandregulationsonEuropeanSingle update ofIcelandiclawtoensurethecountryisinline The EEA Agreement callsfortheconstantrevisionand Level ofIntegration outside theSchengenandDublin Agreements. internal matters,includingjudiciaryaffairs thatfall policy, taxregimes,foreignaffairs ormanyoftheEU’s not participateintheEU’s tradepolicy, monetary include theCommonFisheriesPolicy. EEA EFTA does perhaps mostimportantlyforIceland,itdoesnot Agricultural Policyandregionalcohesionpoliciesand, making processes.ItalsodoesnotcovertheCommon Member StatestotheEU’s institutionsanddecision- It doesnot,however, provideaccessfortheEEA EFTA European Union(EU). agreeing toadopttheregulatoryframeworkof into theEuropeanSingleMarket,withthosecountries Liechtenstein andNorway(collectivelyEEA EFTA) – European Free Trade Association (EFTA) –Iceland, Agreement bringsthreeoftheMemberStates the activeEuropeanisationofIceland. The EEA The EuropeanEconomic Area (EEA)hasfacilitated Iceland’s Position intheEEA AND CHALLENGES THE EEA: STRENGTHS, WEAKNESSES [1] The article isbasedon my moreThe extensive report, article Iceland andEEA, 1994-2011, publishedby EEAReviewCommitteeThe Norwegian i Iceland Bifröst University Associate professor Eiríkur Bergmann cherished democracy. Iceland’s tinyeconomyand,moreimportantly, toits EEA Agreement hasalsopresentedgravechallengesto However, despitetheobviouseconomicbenefits, also becomemorediversifiedandinternationalised. economy, whichhasnotonlygrown rapidlybuthas The EEA facilitatedthetransformationofIcelandic increasingly blurred. and otherpartsofEUlegislationisbecoming Single Market(andthereforewhatisEEA relevant) the borderbetweenwhatisconsideredpartof parliament isinitiatedthroughtheEEA.Furthermore, majority ofalllegislationpassedintheIcelandic the environment,transportandfoodhygiene,vast few areas.Incertainmatters,suchasthoserelatingto deeply involvedinEuropeandisexcludedfromvery measurement isused,itbecomesevidentthatIceland go againsttheoverallaimofEEA Agreement, whole arrangement.Ifthisweretohappen,itwould cannot refuseEUlegislationwithoutthreateningthe become evidentthattheEEA EFTA MemberStates through theIcelandicParliament,ithasincreasingly Even thoughEEA legislationneedstobepassed substantially afterthe2008economiccrash. law. The numberofcasesagainstIcelandincreased before theEFTA CourtforbeinginviolationofEU issued formalinfringementproceduresagainstIceland dozen times,the Authority hastakendirectactionor Surveillance Authority (ESA)intervenes.Morethana does trytodeviatefromtheEUrules,EFTA violation oftheIcelandicconstitution. When Iceland however, thisharmonisedlegalframeworkisin parliament. According tomanylegalscholars, EU legislationisrarelydiscussedintheIcelandic partner. As aresult,theautomaticimplementationof it hasalwaysbeenclearthattheEUisleading formal institutionalframeworkoftheEEA Agreement, Despite theequalityofEUandEEA EFTA inthe Democratic Challenges [1] n March 2011.n March 13 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page14 14 EFTA BULLETIN 2012 directives onelectricityprovidersandsewersand, On afewoccasions,however, EUdirectives(the it wasused. be effective, butitmightnotbetoanyone’s benefitif “thermonuclear clause”,theformalvetorightcould other EEA EFTA partners.Oftenreferredtoasthe the individualMemberState,butalsoforitstwo withdrawal fromtheEEA Agreement, notonlyfor legislation. Vetoing EUlegislationcouldleadto part oftheEEA Agreement thatreferstovetoed Commission todecidewhetherornotsuspendthe Market, anditwouldbeinthehandsofEuropean which istoensurelegalhomogeneityintheSingle EEA andtheSchengen Agreements. Table 1.EUaccessionnegotiationchaptersandhowtheyrelatetoIceland’s adoptionofEUlawthroughthe

1

2

3

4 Participates Mostly Participates Does notparticipate Does Participates Mostly Participates 5

6

7

8

9

10

25

26

Free movement of goods

Freedom of movement for workers

Right of establishment and Right freedom to provide services

Free movement of capital

Public procurement

Company law

Intellectual property law property Intellectual

Competition policy

Financial services

Information and media society

Science and research

Education and culture 28 27 24 23 21 20 19 18 15 14 12 Enterprise andindustrialpolicy Social policy andemployment Social policy Statistics Energy Transport policy policy phytosanitary Food safety, and veterinary protection Consumer andhealth Environment Justice, freedom and security rights andfundamental Judiciary Trans-European networks that processwithinterest. The IcelandicGovernmentisofcoursefollowing implement theamendeddirectiveonpostalservices. Recently theNorwegianParliamentrefusedto a generalpoliticaldebateoverthevetoright. been disputedtotheextentthattheyhaveprompted most recently, theservicedirective) have,however, to Icelandicbusinesses. As wasthesituation by openinguptheinternationalfinancialmarkets composition oftheIcelandiceconomy, forexample In economicterms,theEEA Agreement alteredthe Economic Challenges 29 22 17 16 13 11 35 34 33 32 31 30 Customs union instruments coordination ofstructural and Regional policy policy Economic andmonetary Taxation Fisheries development Agriculture andrural Other issues Other Institutions provisions Financial andbudgetary Financial control policy Foreign, anddefence security relations External 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page15 that hasledtotheincreasedinfluenceofEuropean have, forexample,markedatransformationoftheEU Four newtreatiesandtheEasternEuropeenlargement dramatically. environment inwhichtheEEA operateshaschanged within theEU,meaningpoliticalandlegal political shiftsandinstitutionalturnshavetakenplace the EU.Since1992Maastricht Treaty, various respond totheoperationalandinstitutionalchangesof Even thoughtheEEA isdynamic,itdoesnot,however, Operational Challenges faced withacrisisofthismagnitude. European CentralBank,provedtobeflawedwhen without accesstobackupfrom,forexample,the the otherfootoutsideEUinstitutions,andtherefore Single Market,withalltheobligationsthatentails,and in norout”arrangement,withonefoottheEuropean institutions thatIcelandwasnotpartof. This “neither collapse andnohelpcamefromtheEuropean directive neverhadenoughfundingtocoverasystemic depositors’ guaranteefundsetuponthebasisofanEU Icelandic financialsectorweredevastated. The crisis hit. Three majorbanksandvirtuallythewhole beyond Iceland’s capabilitytobailthemoutwhenthe banks grewrapidlyontheEuropeanmarketsandwell privatisation andextensivederegulation,theIcelandic became evidentduringthe2008financialcrisis. After market createdamajorweakspotforIcelandthat More importantly, thisnewaccess totheEUfinancial entered theEEA. and flowerproducers,thatlostoutafterthecountry were alsosegmentsoftheeconomy, e.g.vegetable accompanying membershipofEFTA, however, there speaking at theEEAsigningceremony inPorto. Chair oftheEFTA side, JónBaldvinHannibalsson, Foreign Minister ofIceland, the frameworkofEEA. find solutions,suitablemeasurescanbefoundwithin indicates that,whenthereisamutualpoliticalwillto against theEU,butresultingcompromisealso fund. The processshowedhowvulnerableIcelandis to increasetheircontributiontheEFTA development EEA untilIceland,LiechtensteinandNorwayagreed threatened tohaltsimultaneousenlargement ofthe collapse oftheEEA Agreement whentheEU The EasternEuropeenlargement almost resultedinthe was completelysafe. on fishmealimports,eventhoughtheIcelandicproduct Denmark –couldIcelandavoidacomprehensiveban support fromEUStateswithsimilarinterests–suchas the madcowdiseasecrisis.Onlybylobbyingfor banned importsoffishmealforanimalsinresponseto fishmeal crisisin2000whentheEUunilaterally the UnitedStates.Moreserious,however, wasthe the EUinvokedtariffs onsteel inatradedisputewith a thirdStateoutsidetheinternaltradeframeworkwhen A goodexampleofthisiswhenIcelandwastreatedas EEA andtheEUclashonanincreasinglyregularbasis. new legislationisbeingprepared.Consequently, the “forgets” toinvolvespecialists fromEEA EFTA when previously. Increasingly, theEuropeanCommission Commission, toastatuslowerthanitenjoyed in the Agreement beingrelegatedwithinthe increasingly lessimportanttotheEU. This hasresulted Agreement areconvincedthattheEEA isbecoming Icelandic officials workingwithinthefieldofEEA diminished significantly. EEA EFTA MemberStateswithintheEEA has around 500millioninhabitants,theinfluenceof the EUhasgrownto27MemberStateswithatotalof Liechtenstein andNorwayrepresentingEFTA, while EEA isbeingchallenged. With onlyIceland, In addition,thebalanceofEFTA andtheEUwithin European legislativeprocess. narrowed theinfluencethatEEA EFTA hasonthe the Commissionhas,therefore,subsequentlyfurther institutions. The diminishedcapacityandinfluenceof and shouldspeakontheirbehalfintheEU’s Commission isthevoiceofEFTA MemberStates the EuropeanCommission. Within theEEA, Parliament andtheEuropeanCouncilatexpenseof inhabitants, Icelandcanonlyoperateaverysmall As asmallcountryoflittlemorethan300000 Cooperating withNorway 15 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page16 16 EFTA BULLETIN 2012 between distantcousins. This isnotarelationship EEA canperhapsbecomparedtoanarrangedmarriage The relationshipbetweenIcelandandNorwayinthe thereby avoidingcoordinationwithIceland. the EFTA SecretariatonmanyEEA relevantissues, their Norwegiancounterpartssystematicallybypass related mattersdirectly. Icelandicofficials claimthat in contrast,isamuchbetterpositiontohandleEEA- more ontheEFTA SecretariatthanNorway. Norway, within theirownadministration,Icelandtendstorely more thanthelarger Statesthatcanuseresources within theEUthatrelyonEuropeanCommission with theEFTA Secretariat. LikemanysmallStates Further tensionisalsofeltoverNorway’s cooperation EFTA Convention. principles oftheEEA Agreement and,indeed,the demands oftheEU,ratherthanstickingfirmlyto Government feelsthatNorwayiskeentogiveintothe kind ofapprovalinBrussels. As aresult,theIcelandic the otherhand,hasneverfeltsameneedtogainthat with provingitselftobeagoodEuropean.Iceland,on EU, theNorwegianGovernmentisveryconcerned after thepopulationhastwicerefusedtoaccede quite different Europeanpolicies. Itisclaimedthat, when itcomestocooperationwithEuropeandoperate have oftenbeeninsignificantlydifferent positions Despite beinglinkedintheEEA,IcelandandNorway Commission withoutconsultingIceland. even enterintonegotiationwiththeEuropean partnership andtendstovoiceopinionsunilaterally, or feels thatNorwaydoesnotalwayshonourthe three ofthem. The Icelandic Governmenttherefore to operatealoneonissuesthatareofconcernall Norway, asthelargest powerwithinEEA EFTA, tends a bindingagreementwithtwosmallerpartners. counterparts seemtoforget onoccasionthattheyarein in Iceland’s foreignserviceclaimthattheirNorwegian It isnotalwaysahappyrelationship.Seniordiplomats Iceland reliesveryheavilyonNorway. within theEEA. As aresultofthesetwofactors, to harmonisetheirpositionandspeakwithonevoice Agreement, theEEA EFTA MemberStatesaremeant Norway andSweden).Inaddition,undertheEEA countries intheNordicregion(Denmark,Finland, services ofneighbouringcountries,especiallytheother relying onclosecooperationwithandhelpfromthe efforts. Itcompensatesforitslackofresourcesby specific policyareasonwhichitcanfocusitslimited administration andhasthusbeenforcedtoprioritise .Revisit stipulationsinProtocol9withtheaimof 4. ProvideaccessfortheEEA EFTA MemberStatesto 3. IncreaseandbroadenIceland’s accesstoEuropean 2. BridgetheeverincreasinggapbetweenEUand 1. main goalswereidentified: the EEA Agreement attheturnofcentury. Four Icelandic Governmentstartedpressingforarevisionof diminished capacitytoinfluenceEEA legislation,the As adirectresultoftheseoperationaldifficulties and Updating theEEAAgreement exacerbated bytheobligationtomakeitwork. unresolved tensionsbetweenthetwopartiesthatare an unevenbalanceofpowerandongoing entered intoonthebasisoftruelove;thereis,instead, Foreign Affairs, at theEEACouncil inMay 2012. Danish EUCouncil Presidency, andÖssurSkarphéðinsson, Iceland’s Minister of Villy Søvndal, Denmark’s Minister forForeign Affairs (left), representing the goods. lowering tariffs onIceland’s exportoffisheries influence withintheEUmachinery. the EuropeanParliament,thathaveincreasedtheir other EUinstitutions,i.e.theEuropeanCounciland Community specialistcommittees. EU treaties. so itwouldbeinlinewiththechangesmadeby the EEA byupdatingthetextofEEA Agreement © Photo: Council oftheEuropean Union 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page17 and onafewoccasionshasevennegotiatedimportant manoeuvre whenitcomestoitsfundamentalinterests, Although Icelandhasbeenabletofindroom own legislationandtakeotherkindsofdecisions. on thecountry’s abilitytogenerateandimplementits problematic forIceland’s democracy, asitputslimits In recentyears,theEEA Agreement hasclearlyproved cooperation agreements. is adefactomemberoftheEUthroughitsclose power totheEU.ItcouldevenbeclaimedthatIceland way, Icelandhastransferredrealdecision-making could beconcludedthat,inanypoliticallymeaningful Iceland couldbesaidtoamodelMemberState.It exercise inimplementingEUandEEA legislation), (the Icelandicparliamentaryprocessisaformal automatically implementingEUandEEA legislation joint bodiesthatoperatewiththeEU,andby By delegatingeconomicdecisionrightstotheEUor while Icelandparticipatesactively. chosen toremainoutsidetheSchengen Agreement official MemberStates.Britain, forexample,has Europe, perhapsevenmoresothansomeoftheEU’s It isclearthatIcelandaveryactiveparticipantin interest inrevisitingtheEEA Agreement. as theNorwegianGovernmentshowedlittleorno Government feltquitealoneinpursuingitsfourgoals proved unwillingtorevisetheEEA. The Icelandic Apart frommakingchangestoProtocol9,theEU on thetwo EFTA countries’ intheSchengenarea. participation In May 1999, President oftheEUCouncil Günter Verheugen andForeign Ministers Knut Vollebæk andHalldórÁsgrímsson ofNorway to tackletheevidentdemocraticdeficit. for itsfragileeconomyand,perhapsmoreimportantly, renegotiated inordertoprovideastrongersafetynet choice otherthantodemandthatthe Agreement is Despite this,itisunlikelythatIcelandwillhaveany the detrimentofIceland. arrangements thatitfindsunsatisfactory, potentiallyto likely thattheEUwouldalsowanttorevisit they areallowed.Ifthe Agreement isrenegotiated,it Icelandic fishermenhavehadnotroublecatchingall fishermen, whohavehaddifficulties meetingit,while Icelandic regionfishingquotamainlytoSpanish exchange offishingquotas. The EUtransferredits for Iceland.Onegoodexampleistheagreementon Revisiting the Agreement isnot,however, withoutrisk Government willhavetorevisittheEEA Agreement. If EUmembershipisrefused,theIcelandic accession isexpectedin2013. Iceland’s EUapplicationin2009. A referendumon access toEUsupportisperhapsthemainreasonfor caused Iceland’s financialtroublein2008butdeniedit economy. The realisationofthesystemicflawthat in boththeboomandbustofIcelandic Economically, theEEA hasbothprovedinstrumental processes, inwhichithaslittleornosay. vulnerable totheEEA andEUdecision-making legislation, thefactremainsthatitisextremely opt-outs andderogationsfromEEA relevant of Iceland, signedtheagreement 17 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page18 18 EFTA BULLETIN 2012 case ofLiechtenstein,thesechallengesmainly effective andsmoothfunctioningoftheEEA.In States have,however, identifiedsomechallengestothe driven byitseconomy. All theEEA EFTA Member integration strategyofLiechtenstein,whichismainly interpretation oftheEEA reflectstheselective further integrationwiththeEU. This pragmatic addition, itviewstheEEA asagoodstartingpointfor legal certaintyprovidedbytheEEA Agreement. In benefits ofaccesstotheEUSingleMarketand Liechtenstein Governmenthighlights,aboveall,the you canfindhardlyanycriticismoftheEEA. The EU. This appliesparticularly toLiechtenstein,where main instrumentformanagingtheirrelationswiththe Member States,theEEA ishighlyappreciatedasthe Second, fromtheperspectiveofEEA EFTA perspective ismostlypositive. the EEA.Eitherway, on the surface,EU’s overlook problemswiththetechnicalfunctioningof more positivelight,andmayhaveledtheEUto of Switzerland,whichdoubtlesslyplacestheEEA ina is acomparisonoftheEEA withthebilateralapproach close politicalrelationship.Implicitinthisassessment the Councilhighlightedagainverypositiveand Norway (collectivelyEEA EFTA). InDecember2010, Association (EFTA): Iceland,Liechtensteinand EEA MemberStatesoftheEuropeanFree Trade adopts conclusionsontheEU’s relationswiththethree Every twoyears,theCouncilofEuropeanUnion from theperspectiveofEuropeanUnion(EU). First, thefunctioningofEEA canbeexamined three different perspectives. Area (EEA),itisnecessarytolookatfromleast To assessthefunctioningofEuropeanEconomic An AssessmentoftheFunctioning oftheEEA [2] Norwegian EEAReviewCommittee,Norwegian September 2011. For amore extensive analysis, see Liechtenstein Liechtenstein Institute Researcher Christian Frommelt Christian Frommelt andSieglindeGstöl: Liechtenstein andtheEEA: SmallState. theEuropeanisation ofa(very) Published by th technical aspectsoftheEEA. the politicaldimensionandtakesintoaccount functional approach,setoutbelow, isnotrestricted to of theEUandEEA EFTA MemberStates,this dynamic economicarea.Incontrasttotheperspectives its ultimateaimofcreatingahomogeneousand EEA fromtheperspectiveofEEA policycycleand The thirdapproachexaminesthefunctioningof optimal solutionfortheEEA EFTA MemberStates. alternative tofullEUmembership,butitisitselfnotan (Norway). As aresult,theEEA representsthebest cooperation (Iceland)andthedemocraticdeficit shortcomings includetheabsenceofmonetary close regionalcooperationwithSwitzerland.Other as thecompatibilityofitsEEA membershipwithits embrace itsownpublicadministrativecapacityaswell adapted inthisway. Inmostcases,theseadaptations implemented bytheEEA EFTA MemberStatesare incorporated intotheEEA Agreement andthereafter EEA JointCommittee. Approximately 20%ofEUacts adapt anEUacttotheirspecificrequirementsinthe The EEA EFTA MemberStatesalsohavetheoptionto Adaptations incorporation intotheEEA Agreement. between theadoptionofanEUactandits by theEEA JointCommitteeaswellthetimelapse sections willthereforefocusontheadaptationsmade specific issues,suchaswaterpolicy. The following EFTA Member States,occuronlyinrelationtovery between theEuropeanCommissionandEEA relevance amongtheEEA EFTA MemberStates,or excluded fortechnicalreasons.DisagreementsonEEA with theEEA Agreement becausemostofthesewere concludes thattheserejectionswerequiteconsistent States. An analysisbytheLiechtensteinInstitute contested byexpertsfromtheEEA EFTA Member relevant bytheEuropeanCommissionthatwere far identifiedmorethan1200EUactsmarkedasEEA legislation. Nevertheless,theEFTA Secretariathasso Member StateshavetoimplementallEEA relevantEU To ensurethefunctioningofEEA,EEA EFTA Legislative Implementation ofPolicyThe and Efficiency [2] e 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page19 EEA Agreement andthetimeeachcountry’s parliament Committee takestoincorporateEUlegislationintothe Another crucialaspectisthetimeEEA Joint Time lapse jeopardise thefunctioningofEEA. specific adaptationsforLiechtensteincanhardly really aproblemasduetoitssmallnesscountry- differentiation acrosstheEEA. This is,however, not the EEA Agreement, causeanewdegreeof adaptations astheyhavebeenadoptedfor Annex Iof adaptations forLiechtenstein,inparticularsectoral level ofdifferentiation. By contrast,country-specific EU legislationandthushavenotledtoathreatening certain EUMemberStatesprovidedbytherespective adaptations correspondtospecificexemptionsfor Norway andIceland,mostofthesecountry-specific legislation orfromcertainofitsprovisions.Regarding Member StatefromtheimplementationofEU specific adaptationsthatexemptanEEA EFTA The EEA JointCommitteecanalsomakecountry- time lapseofanEUactwithoutadaptation. EEA Agreement is,onaverage,twiceaslongthe act withanadaptationanditsincorporationintothe addition, thetimelapsebetweenadoptionofanEU certainty andthusthefunctioningofEEA.In EEA JointCommitteemaypotentiallyreducethelegal and scopeoftheEUEEA. Adaptations bythe Member Statestakingintoaccountthedifferent depth legislation maydiffer betweenthe EU andEEA EFTA adaptations aresuchthattheimplementationof functioning oftheEEA.Inothercases,however, the are merelytechnicaladjustmentsthatdonotaffect the Liechtenstein, signingtheEEAAgreement inPorto. Hans Brunhart, HeadofGovernment andMinister ofForeign Affairs of how realisticthehomogeneityacrossEEA is. of theEEA.However, theissuealsobegsquestion be crucialforadebateonpotentialfutureenlargement respective challengesaredecisive. This hypothesismay adjust thoseinstitutionsandprocedurestothe political willandcapacityoftheContractingPartiesto and proceduresprovidedbythe Agreement butalsothe political environment. Thus, notonlytheinstitutions vulnerable asitsfunctioningdependsstronglyonthe despite itsgoodfunctioning,theEEA assuchremains Against thisbackground,onemighthypothesizethat, scope oftheEUandEEA. EFTA occurmainly duetothedifferent depthand legislation thedifferent speedsof theEUandEEA a fewEUacts,whereasforthevastmajorityof study bytheLiechtensteinInstitute,thisappliesonlyto automatic integrationprocess.However, accordingtoa the faceofwhatiswidelydepictedasaquasi- EFTA Member Statestoreclaimtheirsovereigntyin Agreement mayresultfromanattemptbytheEEA incorporation ofEUlegislationintotheEEA sovereignty. Fromthisperspective,thedelayed ways inwhichcountriesprotecttheirinterestsand The difference inspeedcanberegardedasoneofthe its functioning. weaken thehomogeneityofEEA andcompromise the different speedsoftheEUandEEA EFTA Member States. At leastfromanacademicpointofview, EEA relevantEUlegislationearlierthantheEEA EFTA Agreement. As aresult,EUMemberStatescomplywith much higherthanthe180daysstipulatedbyEEA which takes,onaverage,morethan400days. This is EU actanditsincorporationintotheEEA Agreement there isaserioustimelapsebetweentheadoptionofan case ofsuchconstitutionalrequirements.Studiessuggest requires toratifyanEEA JointCommitteeDecisionin Agreement doesnotadjusttotheevolutionofEU is limitedtoEUsecondarylawandtheEEA EFTA. Additionally, thedynamicapproachofEEA two different institutionalpillars,theEUandEEA the sensethatitisselected,adoptedandappliedwithin interpreted uniformly. Yet EEA lawispolycentricin EEA lawarelargely adoptedinparallelandhavetobe differentiated integrationoutsideEUborders.and the EEA isthemostfar-reaching modelof continuous incorporationofEUsecondarylegislation, Based onadynamicapproachthatrequiresthe Realistically Attainable intheEEA? What is Degree ofHomogeneity 19 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page20 20 EFTA BULLETIN 2012 institutional cooperationbetweentheEUandEEA high degreeofhomogeneitybecausethetight These policy-relatedfactorsdonotaprioriexclude conceptualisation oftheEEA. two-pillar structureandtheintergovernmental institutional framework,whichmayconflictwiththe become moreorientedtowardsasupranational the institutionalrequirementsofanEUacthave assessment oftheirrelevancetotheEEA.Inaddition, EU policieshaveblurred,whichhampersthe various EUtreatyrevisions,theboundariesbetween widened furtheroverthelast20years.Owingto beginning smallerthanthatoftheEU,gaphas While thescopeanddepthofEEA wasfromthe institutions ofthesetworegimes. as thedifferent levelofpower wieldedbythe different policyscopeoftheEUand theEEA aswell The mostimportantpolicy-relatedfactorsrefertothe Policy-related factors EEA isattainable. to assumethatahighdegreeofhomogeneityacrossthe Single Market. As aresultofthesefactors,itisrealistic and theireconomiesarehighlydependentontheEU’s political powerorinfluenceoutsidetheircountries, highly capable,autonomousgovernmentswithlittle EFTA statesaremore likelytocomplyastheyhave Moreover, comparedtotheEUmembers,EEA factors acrossthethreeEEA EFTA countries. EU. There is, however, verylittlevariationinthese States aswelltheireconomicdependenceonthe political poweroftherespectiveEEA EFTA Member addition, homogeneitymaybedeterminedbythe the decision-makingautonomyofgovernment.In homogeneity aretheadministrativecapacityaswell Country-related factorsthatareusuallylikelytoaffect Country-related factors of therespectiveintegrationregime. related factorsaredeterminedbythescopeanddepth structures tointernationaldevelopments,policy- factors focusontheadaptabilityofdomestic and policy-relatedfactors. Whereas country-related play arole. These canbedividedintocountry-related the EEA initscurrentshape,awiderangeoffactors To assessthedegreeofhomogeneityattainableacross EEA mightbeimpossible. primary law. As aresult,completehomogeneityinthe EEA EFTA MemberStatestodelegatedecision- element oftheEEA,however, limitstheleewayof binding decisionsonthem. The intergovernmental inspections withintheEUMemberStatesorimpose decentralised bodieswhich,forinstance,cancarryout to theestablishmentofseveralagenciesand centralisation, whichhasevenincreasedrecentlydue characterised byahighdegreeofsupranational organisation. Bycontrast,theEU SingleMarketis The EEA isbyitsnatureanintergovernmental The MainChallengesfor theEEA the mainchallengesforEEA inthenearfuture. unclear. Clarificationofthisuncertaintywillbeone level ofpowerwieldedbyitsinstitutions,remain in termsofthenumberintegratedissueareasand actual scopeandinstitutionalcentralisationoftheEEA, account intheEEA Agreement. Ontheotherhand, in theEU’s primarylawhavenotbeentakeninto and mighthelptocompensateforthefactthatchanges a crucialfactorinensuringthefunctioningofEEA The capacityandcredibilityoftheEFTA institutionsis public attention. decisions inanon-politicalatmosphereandwithlittle which hasastrongmandatebutcanstillreach particular totheroleofEEA JointCommittee, interpretation oftheEEA Agreement. This appliesin the EEA EFTA MemberStates,facilitatesaflexible EFTA, andthehighlevelofgovernmentautonomy Ministerial MeetinginIceland, June2010. Aurelia Frick, Liechtenstein’s Minister ofForeign Affairs, speakingat theEFTA 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page21 more difficult. An extensionofthepolicyscope making theselectionofEEA relevantEUlegislation become increasinglyblurredoverthelast20years, The regulatoryboundaryoftheEU’s policyfieldshas What theFuture Might Hold? flexibility oftheEEA EFTA institutions. assist thefunctioningofEEA asitmayreducethe domestic interestintheEEA mighthamperratherthan delicate policycycleoftheEEA,however, increased interest inEEA matters.Owingtothecomplexand reduced slightlybyincreasingpublicandpolitical domestic perspective,thedemocraticdeficitcouldbe making process,butthisismostunlikely. Froma need tobegraduallymoreincludedintheEUpolicy- To solvetheproblem,EEA EFTA Stateswould and qualitatively-thedebatehasgainednewimpetus. States hasintensifiedsignificantly-bothquantitatively not new, butbecausetheintegrationofEEA EFTA The controversysurroundingthedemocraticdeficitis extension ofthescopeanddepthEEA. the EEA EFTA MemberStates,nordotheypreventthe These adaptationsdonotsafeguardthesovereigntyof restrict thetasksofEUbodieswithinEEA EFTA. by theEEA JointCommitteemaytosomeextent process isthusnotbalancedbythefactthatadaptations EEA EFTA MemberStatestotheEUpolicy-making legislation acrosstheEEA. The limitedaccessofthe the enforceabilityandlegalbindingnessofEU symbolic natureandthereforeratherunlikelytorestrict Committee. Suchadaptationsare,however, moreofa negotiate EEA-specificadaptationsintheEEA Joint Contracting Partieswillrepeatedlybeforcedto therefore nottoEEA EFTA MemberStates,the making processisavailableonlytoEUMembersand Because decision-makingpowerintheEUpolicy- enforceability ofEUlegislationacrosstheEEA. secondary legislationwhichstrengthenthe accept specific,institutionalrequirementsofEU making authoritytosupranationalinstitutionsor strengthen theirsovereigntyanddemocracy. provide moreflexibilityandthuswouldactually crossed theRubiconwherefullEUmembershipwould the EEA EFTA MemberStatesmayalreadyhavetacitly the mostrecentexample),onecannothelpbutthinkthat differentiation withintheEU(the Fiscal Compactbeing boundary shiftoftheEEA andtheincreasinglevelof membership. Nonetheless,takingintoaccountthesteady the EU,althoughIcelandiscurrentlynegotiatingEU reduces thelikelihoodofamoreactiveintegrationwith The euro-scepticisminallEEA EFTA MemberStates likely tohamperthefunctioningofEEA. of theEEA EFTA wouldcertainlyincrease,whichis an EEA EFTA enlargement. Instead,theheterogeneity current EEA EFTA MemberStateswould benefitfrom Nonetheless, itremainsunclearwhethertheEUor beyond theEEA’s currenttwo-pillarstructure. under theconditionthatasolutioncanbefound association, butsuchprocedurescouldbeexplored EEA Agreement doesnotforeseedirectaccessionnor are possibleandhavebeenpracticedinthepast. The procedure, norofassociation,althoughbothoptions does notspecifythemodalitiesofanaccession would firsthavetojoinEFTA. The EFTA Convention for Switzerland,potentialmembersofEEA EFTA States amorepowerfulvoice.Legallyspeaking,except of EEA EFTA mightgivetheEEA EFTA Member commentators havealsosuggestedthatanenlargement to consolidatetheEU’s externalrelations. A numberof The EEA isoftenreferredtoasamodelofassociation therefore outofreachwithintheEEA context. power isexplicitlytiedtoEUmembershipand is lessflexible.Inparticularthedecision-making EFTA MemberStatesintheEUpolicy-makingprocess the policyscope,however, theinclusionofEEA fields underitslegislativecompetence.Incontrastto differentiated integrationacrossthevariouspolicy degree offlexibility, providingmanyexamplesof In thisregard,theEUitselfhasdemonstratedahigh concluded additionalbilateralagreementswiththeEU. Member States,inparticularastheyhavealready EEA mightthusbeintheinterestofEEA EFTA 21 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page22 22 EFTA BULLETIN 2012 involved, owingtotheshrinkingofEFTA (fromseven and theconstantlyvaryingnumberofcountries coping withtherapidexpansionofEU’s agenda Second, ithasprovedrobustandadaptablewhen ability tohandlethesedifficult tasks. Authority andtheEFTA Court,havedemonstratedtheir and compliance,suchastheEFTA Surveillance Moreover, theinstitutionssetuptoensuremonitoring state aid,publicprocurementandcompetitionpolicy. EEA Agreement hasalsoprovidedforcommonruleson movement ofpersons,capital,servicesandgoods. The States intotheSingleMarket,withitsfreedomof ensured theintegrationofEEA EFTA Member Liechtenstein andNorway). The Agreement has the EUandEEA EFTA MemberStates(Iceland, ensure homogeneityandalevelplayingfieldbetween purpose. Foralmost20years,theEEA hashelpedto First, theEEA Agreement hasfulfilleditsinitial drawing attentionto. so well. There arefivekeysuccessesthatworth that the Agreement haslastedsolongandfunctioned force. Itistherefore,inmanyways,quitesurprising Member Statesleftashorttimeafteritenteredinto some oftheEuropeanFree Trade Association (EFTA) negotiations, rejectedtheEEA inareferendum,and addition, Switzerland,whichparticipatedinthe interested injoiningtheEuropeanUnion(EU).In had lostinterestinthe Agreement, andweremore the finalperiodofEEA negotiations,mostparties the timeofsigningthatitwouldlastforlong.During unattractive andwasevencontested.Fewbelievedat at itsinception;theEEA Agreement wasdeemedquite functioning surprisinglywell.Itiseasytoforget that, True. The EuropeanEconomic Area (EEA)is isFunctioning Well.” True EEA “The orFalse? [3] Secretary to the Norwegian EEAReviewCommittee to theNorwegian 2010-2012. Secretary Norway International Affairs(NUPI) Instituteof Norwegian Director Ulf Sverdrup [3] making bodies. States arenotproperlyrepresentedinEUdecision- of theEEA,especiallyasEFTA EEA Member serious democraticweaknessesrelatedtobeingpart effectively. This isdespite thefactthatthereare economic andpoliticalinterestscanbepursued model ofassociation,ensuringthatthesecountries’ States, theEEA Agreement hasbeenconsideredasa integration withtheEU.ForEEA EFTA Member wanted tograduallyexpanditscooperationand EFTA havesofarsupportedthe Agreement andhave States, votersandpartiesfromtheEUEEA Finally, andperhapsmostimportantly, Member the EFTA EEA MemberStates. management oftherelationshipbetweenEUand ensure arathersmoothday-to-day, routine limited administrativecosts,andtheprocedures with oneoftheirlargest trading partners,ithas perspective oftheEU,itorganises therelationship entered intowithanythirdparty. Fromthe most well-functioningagreementstheEUhas Fourth, theEEA Agreement isprobablyoneofthe the fieldofJusticeandHome Affairs. Security andDefencePolicyincooperation Agreement, suchasintheCommonForeignand and EFTA innumerousareasoutsidethescopeof for promotingclosercooperationbetweentheEU In addition,theEEA hasservedasasteppingstone the levelofactivity. find workableandpracticalsolutions,well-suitedto system, andyettheMemberStateshavebeenableto main Agreement. The EEA isanover-institutionalised place withouttheneedforaformalrenegotiationof since thesigning.Significantdevelopmentshavetaken asymmetry betweenthepartiesinvolvedhasincreased Third, the Agreement hasprovedtobeflexible. The have replacedormodifiedexistingacts. been added.Someoftheseareentirelynew, others acts. Sincethen,morethan6000legalactshave the timeofsigning,itcoveredaround2000legal terms oftheamountlegislationitencompasses. At In addition,the Agreement hasbeenexpandedin EU (from12MemberStatesto27). Member Statestothree)andtherapidexpansionof 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page23 across theEEA. minded”. As such,thereisalreadyconsiderableunity through sharedgoalsandvalues;theyare“like- also highlyintegratedandinterconnectedsocially political field.Inaddition,theEUandEEA EFTA are countries involvedoperateonthesameeconomicand impact ontheEEA EFTA MemberStatesasallthe Developments intheEUwillautomaticallyalso between theEUandEEA EFTA states. Broadly speakingthereisconsiderablehomogeneity Homogeneity intheEEA:broadview Agreement. the narrowlegalsenseofframeworkEEA On theotherhand,wecantalkabouthomogeneityin political, ideological,socialandeconomicelements. about homogeneityinabroadsense,encompassing the questionofunity. Ontheonehand, wecantalk There areatleasttwodifferent setsofissuesrelatedto realistically attainableintermsofhomogeneity. laudable, thisdoescreatesomeboundariesforwhatis be outsideandinsideatthesametime. Although is arareconstructthatenabletheEEA EFTA statesto an understandingofthebenefitsdiversity. The EEA a desireforhomogeneity, butatthesame timethereis EEA hadamottoitcouldeasilybethesame. There is The mottooftheEUis“unityindiversity”andif intheEEA? Homogeneity Agreement inPorto. Minister ofForeignNorwegian Affairs Bjørn, Tore Godal, signingtheEEA in detail: affect homogeneity. The reportconsideredthreeissues development oftheEEA andthefactorsthatcould (Outside andInside))examinedcriticallythe with theEU(NOU2012:2UtenforogInnenfor Our studyoftheworkingsNorway’s agreements policies, butsofarthesehavebeenlimited. could leadtodiffering interpretations oflegislationand related to,forinstance,geographyandclimate,which is toensureunity. There couldofcoursebedifferences of homogeneity. After all,theprimarygoalofEEA Agreement, weshouldinprincipleexpectahighdegree homogeneity withintheareascoveredbyEEA Now, ifwelookatthemorenarrow perceptionof Homogeneity intheEEA:narrowview more asoutsidersthaninsiders. see themselvesasdifferent, andconsiderthemselves therefore notsurprisingthatthecitizensofEEA EFTA something otherthanfullEUmembership.Itis Member States. The EEA wasalwaysmeanttobe for self-awarenessandidentityamongtheEEA EFTA Moreover, thismodeofassociationhasimplications such, theywillalwayshaveadifferent status. political processeseitherformallyorinformally. As fewer contactpointsandlessopportunitytoinfluence therefore almostalwayshavelessaccesstoinformation, keep itsautonomy. The EEA EFTA MemberStateswill participation intheEUand,similarly, theEUiseagerto representation andresponsibilitywhenitcomesto have decideddeliberatelytonotdirect the EUMemberStates. The EEA EFTA MemberStates EFTA MemberStateshaveadifferent statustothatof fundamental tothedesignofEEA thattheEEA homogeneity acrossalltheMembersStates.Itis It is,however, unrealistictoattaincomplete 1. challenge tounity. Inaddition,theincreaseduseby to theEEA moredifficult, whichnaturallyisa outside theEU,makesassessmentofrelevance and morepoliciescoordinatedwithcountries legislation. Increaseduseof“packages”intheEU, determine therelevancetoEEA ofcertainEU determine theboundariesofEEA andto some areasitisbecomingincreasinglydifficult to Member States.However, itisnoteworthythatin fundamentally affected thehomogeneityof EEA Agreement wassigned,fewofthemhave many treatyrevisionsthathavebeenmadesincethe If weconsiderdevelopmentsintheEU,and 23 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page24 24 EFTA BULLETIN 2012 naturally createastressontheInternalMarket. While social unrest,publicdebtandweakfinances integration. At thesametime,highunemployment, in manywaysthedrivingforceofEuropean EU, willalsoimpactontheEEA. The SingleMarketis the futureofeuro,andbydefault developments oftheEU. The currentdramarelatedto The first,andarguably mostimportantchallenge,isthe also inter-related. viewed independentlyofeachother, buttheyare was signed. The followingchallengesareoften more sonowthanatanytimesincethe Agreement The EEA ischallengedinseveralways,perhaps Main Challengesto theEEA? 3. 2. decision making. valve”, compensatingforlimitedinfluencein be interpretedasrepresentingsomesortof“safety EEA. However, tosomeextent,thesedelaysmust could potentiallyunderminecohesionacrossthe particularly longtimeandtheselongerdelays there aresomeactsthatdelayedfora great bulkisimplementedinappropriatetime,but threat tothehomogeneityacrossEEA. The be wrongtoconsiderthesedelaysasaserious challenge thenotionofhomogeneity. Still,itwould entered intoforceintheEU. These delays EFTA Member States12to18monthsafterit legislation typicallyenteredintoforceintheEEA States. The study foundthatthemajorityof date itentersintoforceinEEA EFTA Member EU legislationentersintoforceintheand states isalsoaffected bythedelay between thedate Homogeneity betweentheEUandEEA EFTA as theaverageEUMemberState,orbetter. and EEA rulesandregulations,tothesameextent general, beenwillingandabletocomplywithEU national courtsandadministrationshave,in average EUMemberState.Inaddition,their at alevelthatis,least,comparablewiththe implemented rulesandregulationsinamanner new legalacts,andtheyhave,ingeneral, Member Stateshaveneverreservedthemselvesto derogations fromtherules. The EEA EFTA States havefewpermanentortemporary The studyalsofoundthattheEEA EFTA Member also difficulties inrelationtounityandcohesion. powers, raisessomeconstitutionalissues,andthus the EUofagencies,whichhavedecision-making Gahr Støre, Minister forForeign Norwegian Affairs, inBrussels2011. Policy and and Security Vice-President oftheEuropean Commission, withJonas Catherine Ashton, HighRepresentative oftheEuropean UnionforForeign Affairs might beinterestedinmovingthesamedirection. would thenbeavailableandtheEEA EFTA countries EEA, becauseanotheralternativemodeofassociation agreement, thiswouldalsohaveimplicationsforthe Switzerland successfullynegotiateanewframework current EUmemberstates. Alternatively, if the EUand Monaco, currentcandidatestates,orperhapseven Switzerland orstateslikeSanMarino, Andorra, course betoenlarge EEA EFTA toalsoinclude States couldbequestioned.Oneoptionwouldof maintaining theEEA fortheremainingEFTA Member Nevertheless, ifIcelandleavesEFTA, therationalefor indicated strongwilltocontinuewithtwostates. if thereisenoughpoliticalwill.Sofarthepartieshave an EEA EFTA withtwostatesmight perhapsbesolved will havetobealtered. The legalandformalissuesof the EFTA Surveillance Authority andtheEFTA Court, If thishappens,thefunctioningofEEA institutions, well leaveEFTA. to joining,itmustbeborneinmindthatIcelandmay uncertain andtheIcelandicpeoplemayyetvoteno and althoughtheoutcomeofthesenegotiationsis is negotiatingconditionsforitsaccessiontotheEU in thecompositionofEFTA. At themoment,Iceland The EEA structureisvulnerabletofurtherchanges countries, twoofwhicharegeographicallysmall. that EFTA’s involvementis limitedtojustthree A secondseriouschallengetotheEEA isthefact well bechallengedforprotectivemeasures. notion ofanopenandcompetitivemarketmightvery solution toensuringgrowthandemployment,the a well-functioningSingleMarketmaybeproper © Photo: Council oftheEuropean Union 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page25 than 20years.Ithasworkedandthepartieshavebeen To conclude,theEEA hasbeensuccessfulformore the EUaswell. The Norwegiancompromiseisfragile. support forEuropeanintegrationisdecliningacross EU andEEA isinaslightdeclineNorway, as arrangements. We observethatappreciationforthe factor inareassuchaslabourlawandwelfare making theEEA Agreement avisibleandcontested mobility andtheincreasedscopeoflegislation, committed totheEEA. Another reasonistheincreased and bureaucratshavelessknowledgeoffeel leaving office andthenewgeneration ofpoliticians the originalpoliticalparticipantsin Agreement are challenge thiscompromise.Onereasonforisthat growing tensionasthenationaldebatehasstartedto Over thelastfewyears,however, therehasbeen membership fromthepoliticalagenda. a predictableframeworkandithasservedtoremoveEU governed onthebasisof Agreement, ithasservedas and ithasoftenbeentakenforgranted;allpartieshave side. As apoliticalcompromiseithasfunctionedwell compromise, unitingtheproandnotoEUmembership have supportedtheEEA assuch.Ithasbeenapolitical membership, othershavewantedlessintegration.Few with nationalautonomy. Somehave wantedEU alternative, balancingthedesireforEuropeanintegration has alwaysbeenconsideredasa“secondbest” a domesticcompromise.InNorway, theEEA Agreement The thirdchallengetotheEEA isitsstatusinNorwayas the SingleMarket to awiderEurope, shakinghandsinBrussels1991. Minister Gro HarlemBrundtland, two ofthecentral architects behindextending President oftheEuropean Commission Prime andNorwegian JacquesDelors © Photo: European Commission regardless ofthespeedanddirectionEU. probably continuetodojustthatintheyearscome, have followedtheprocessesinEU;theywill processes intheirownspecialway, andfor20years society. EEA EFTA countries takepartinthese borders, andtieshavebeenforged atalllevelsof to work,travel,dobusinessandstudyacrossnational legal systemhasbeendeveloped,itbecomeeasier infrastructure hasbeenbuilt,anextensivecommon more closelyinterwoventhaneverbefore,joint society. The economiesoftheEuropeancountriesare past fewdecadesthathaveaffected mostareasof been throughfar-reaching integrationprocessesinthe vulnerable. Infact,mostEuropeancountrieshave the underlyingsubstanceisprobablyfarless arrangement willlastforanother20years.However, I havemydoubtsthatthisspecificinstitutional for theEEA ismorestatic. the factthatEUisdevelopingwhileframework control. There are constantinstitutionaltensionsdueto circumstances thatarelargely beyondNorway’s association withtheEUdependsonexternal dissension. Secondly, Norway’s currentformof risk, butattimes,however, therearesignsofstrainand long time. There arenostrongindicationsthatitisat For apoliticalcompromise,ithasalreadylastedvery compromise reachedbythepoliticalpartiesinNorway. two equallyvitalfactors.Firstly, itis underpinnedbya For Norway, atleast,the associationiscontingenton time, itisavulnerablestructure. out tobesurprisinglystableandflexible. At thesame and considerableupsdowns,theEEA hasturned While theEUhasattimesexperiencedmajorchanges agreements aregreaterinprinciplethanpractice. the problemswithEEA,Schengenandother better thanmanyexpected.Experiencesofaristhat however, thisformofassociationhasworked,andfar accountable intheirEuropeanpolicy. Inpractice, it difficult tomonitorthegovernmentsandholdthem dampens politicalengagementanddebatemakes them. Moreover, theformofassociationwithEU and neitherdoesithaveanysignificantinfluenceon consequences forNorway, IcelandandLiechtenstein, decision-making processesthathavedirect problems. EEA EFTA isnotrepresentedinEU arrangement, withinherentstructuraltensionsand cooperation. Inprinciple,thisisadifficult international context,thisisanunusualformof it isbasedonassociationwithoutmembership.Inan content. However, theEEA isastrangeconstruction; 25 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page26 26 EFTA BULLETIN 2012 Towards amore strategically focused EEA? option, itisnotunreasonabletoholdtheviewthat the conclusionthat“moreofsame”ispreferred when areflectiononthefutureofEEA wouldyield but otheroptionsshouldalsobeconsidered.Even that theEEA needsonlyminorchangesoradaptations, addressed. The answertothesequestionsmightwellbe questions aboutthefutureofEEA thatneedtobe Member States. At theveryleastitposesseveral requires acohesive,strategicresponsefromits30 environment oftheEEA ischanging,andthatinitself We wouldargue, however, thatthestrategic designed purposefullywithoutanyfurtherpoliticalaim. EEA sofar, giventhatitisaframeworkarrangement question hasperhapsbeenalientothenatureof precisely, shouldtheEEA haveastrategy? This routine foranother20yearsiswhatneeded.More worth askingwhethersimplycontinuingtheEEA If welookbeyondtheanniversaryparty, however, itis decades of“morethesame”. reason forcelebrationandwouldjustifyanothertwo established 20yearsago.Suchsuccessisanexcellent anybody couldhavereasonablyexpectedwhenitwas functions betterandhasdeliveredmorethanalmost has notonlyearnedagoodreputation,butthatit Those closelyinvolvedoftenemphasisethattheEEA (usually smooth)runningoftheEEA forgranted. satisfied withtheEEA and,perhaps,totakethe have ledparticipantsandstakeholderstobebroadly and itsambitionofthorougheconomicintegration, decades ofeffective functioning,despite itscomplexity landscape ofEuropeaneconomicintegration. Two established elementinthecomplexinstitutional The EuropeanEconomic Area (EEA)isawell- Brussels Studies (CEPS) Centre forEuropean Policy Research FellowSenior Jacques Pelkmans the EEAina Turbulent Europe The Convoluted Establishmentof humble objectivecanberealised. will takeastrategicfocustoensurethateventhis 140), partially(andsomewhatselectively)mimicking bilateral agreementswiththeEU(nowtotallingaround Switzerland, tobefollowedlaterbyanavalancheof of 1992ledtoawithdrawalfromtheEEA by the sixEFTA Statesatthetime. The Swissreferendum the variablestrategicpositioningoffour, ifnotfive,of On theEFTA side,theconvolutionwasmanifestedin by turbulencenotseensincetheendof World War II. meaning andmembershipoftheEEA inaEuropebeset was characterisedbyconvoluteddebateaboutthe EFTA institutions,theinitialperiodfrom1989to1995 today, suchasstability, effectiveness andreliableEEA In sharpcontrasttothequalitiesEEA isknownfor and EUcountries. complexity anddepthuntilnowadays,betweenEFTA realised bycreatingacontractualbridge,uniqueinits the EU’s SingleMarket. This historicachievementwas for thealmostcompleteparticipationofEFTA Statesin and theEFTA Member States,theEEA finallyallowed non-EFTA Ireland)in1973, bywelcomingboththeEU (EU) oftheUnitedKingdomandDenmark(aswellas in responsetotheaccessionEuropeanUnion States andtheEuropeanEconomicCommunity(EEC), European Free Trade Association (EFTA) Member the conclusionofFree Trade Agreements betweenthe Europe intotwoteamsofeconomicintegration. After marked theendofalong-standingdivide Western The signingoftheEEA Agreement on2May1992 Brussels Studies (CEPS) Centre forEuropean Policy Researcher Philipp Böhler 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page27 in 1989,theEUwasstillEEC,asper Treaty of When theOsloprocessofnegotiatingEEA began The EUwasalsoevolvinginthepost-1995period. insofar asitwascoveredbytheEEA. on thesubstanceofaligningwithEUSingleMarket same time,theEEA EFTA MemberStatescouldfocus the breathingspacetobuildupasolidreputation. At the EFTA CourtandtheEFTA Surveillance Authority had of theEEA andits(EFTA-based) institutionssuchasthe of joiningtheEUinforeseeablefuture,functions itself. Giventhatthesethreecountrieshadnointention found themselvesintheEEA in1995alongsidetheEU Iceland, LiechtensteinandNorway(EEA EFTA) – With theNorwegianpeoplevotingno,threecountries– Liechtenstein tojointheEEA in1995. and acurrencyunion)insuchwayastoenable relations withSwitzerland(includingacustomsunion had been(re)negotiatingitsdeepandlong-standing meantime, however, thePrincipalityofLiechtenstein Iceland wouldhaveremainedintheEEA.In Norwegian referendumyieldedayesvote,only “waiting room”beforeenteringtheEU.Had EU membership;forthem,theEEA wasmerelya Finland, NorwayandSweden)werealsoapplicantsfor four EFTA signatoriestotheEEA Agreement (Austria, the integrationofEEA.Evenmoreremarkable, provides politicalimpetusforthedevelopment oftheEEAAgreement andguidelinesfortheEEAJoint Committee. The EEACouncil iscomposed ofEEAEFTA andEUforeign ministers andrepresentatives oftheEuropean Service. Action External T Central Europeancountries. expectations offutureEUmembershipformany first Europe Agreements werealreadycreating By thetimeEEA Agreement cameintoforce,the anchor andweredrawntoitsprosperitymarket. and aplannedeconomy–lookedtotheEUasan European countries–liberatedfromtotalitarianism collapsed, theSovietUnionimplodedandCentral benign hegemon. The Cold War wasover, communism catapulted theEUintoaleadershiprole,ifnotthatof Moreover, theturbulenceacrossEuropesuddenly result, theEEA two-pillarstructurewasborn. of theEEA havingits“own”legalinstitutions. As a the originalidea,promulgatedinEEA negotiations, enough in1991tobeabletakeafirmstanceagainst The EU(viatheEuropeanCourtofJustice)wasstrong to theSchengen Agreement. as itwasthenknown–justiceandhomeaffairs, linked its remittoincludeforeignandsecuritypolicies– intergovernmentalism andthe“Community method”) and MonetaryUnionwidened(withablendof connected commonpolicies),itaddedtheEconomic and widenedtheEU’s core(theSingleMarketandits years later, theMaastricht Treaty notonlydeepened Rome andasadaptedbytheSingle Act. Lessthanthree he EEACouncil ayear meetstwice and © Photo: Council oftheEuropean Union 27 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page28 28 EFTA BULLETIN 2012 dynamic repercussionsfortheEEA EFTA States. a staticarrangementthatneverthelesshashadcontinuous their market-basedrelationswiththeEU.Itprovedtobe is stillgoverninghowtheEEA EFTA Statesregulate Member States. The Agreement, negotiated20yearsago, incorporated intothedomesticlawofEEA EFTA substance ofmarketintegrationandEUregulation changed, andtotheformidablesteadilyincreasing respectively, totheEEA Agreement, whichhardlyever both staticanddynamicatthesametime. This refers, stable. Itissometimesdescribedasanagreementthat evolution ofEurope,theEEA hasremainedremarkably Compared withthehighlydynamicEUandongoing Europe maystillhavetobedigested. the long-termimplicationsoftransformation not beenwithoutconsequencesfortheEEA.Indeed, of theEUgrewtonolessthan27countries. All thishas but notleast,intwofurtherenlargements, membership introduced and17countriesjoinedtheEurozone.Last active EuropeanParliament.Moreover, theeurowas operation inCriminalMatters,aswellamuchmore Security Policy, andthePoliceJudicialCo- European Communities,theCommonForeignand deepening andconsolidationofthethreepillarsof: and Lisbon),leadingto,amongotherthings,a with nolessthanthreemoretreaties(Amsterdam,Nice change quiteradicallyinthefollowingtwodecades, benefit fromtheInternalMarket,EUwasgoingto which wascharacterisedbystabilityandthedesireto In contrasttothepositioningofEEA EFTA by1995, The EEAJoint Committee meetinginJuly2012. have More than6000legal acts beenaddedto theEEAAgreement i since itsentry homogeneous aspossiblealsofortheEEA. consequences ofitsinternalmarketdecisionsas is eagertokeeptheeconomicandregulatory economic integrationthanithadin1995,andwhich now somuchbiggerEU,whichhasafardeeper beyond whatthe Agreement stipulatesandii)the their sovereignty(oratleastautonomy)seemingly understandable sensitivitytoencroachmentupon between i)theEEA EFTA Member States’ will needtotakeintoaccounttheforbalance review willneedtobestrategicinthesensethatit appropriate aftertwodecadesoffunctioning.Sucha December 2010thatanoverall,holistic“review”is EEA isneeded. The CounciloftheEUconcludedin more strategicreadjustmentoftheworking can beaddressedinanadhocmanner, orwhethera perfect. The questioniswhetheritsimperfections Of course,thispraisedoesnotmeantheEEA is reasons notconnecteddirectlywiththeEEA. natural developmentinitsrelationshipwithEuropefor EEA withEUmembership,butseesaccessionasa membership in2010,doesnotbelieveitisreplacingthe functioning entity. EvenIceland,whichappliedforEU the EEA andcometotheconclusionthatitisawell- organs andtheEuropeanParliamenthaveallassessed The CounciloftheEU,Liechtenstein,Norway, EFTA The EEA on Reflections The Working of nto force in1994. with 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page29 EEA Agreement moreefficient. This isevidenceofa process ofincorporatingnewEUacquisintothe Committee adoptednewrulesinordertomakethe the EFTA StandingCommitteeandEEA Joint conceived, shouldbeexplored” established whentheEEA Agreement wasfirst simplifying someoftheprocedures, whichwere Agreement, thepossibilityofupdatingand regard tothe‘technical’ functioningof the conclusions ofDecember2010 Despite theoccasionaldelay, the Council,inits application ofthelatter” legislation withaviewtopermittingsimultaneous Community ofthecorresponding newCommunity happen article 102EEA,whichstipulatesthatthisshould This doesnotalwayscorrespondwiththewordingof implementation acrosstheEEA MemberStates. the EEA Agreement andsubsequentnational the incorporationofEUlegislationintoannexes Another pointofcontentionisthetimelapsebetween Timely incorporationoflegislation of theEEA. regarded asgoodexamplesoftheeffective functioning From thisperspective,evenresolveddisputescanbe well awarethatpoliticaldisagreementmightarise. resolve suchevents,itisclearthatthenegotiatorswere Agreement providesformechanismsdesignedto same time,ithastobeacknowledgedthat,asthe disagreement onthesetwoissueswasstrong. At the 102 EEA has,sofar, neverbeenused,butthe option” providedforinthelaterparagraphsofarticle scheme andthethirdpostaldirective. The “nuclear accept. Justtwoexamplesarethedepositguarantee always easyfortheEEA EFTA MemberStatesto internal decision-makingprocessoftheEUisnot market andhavingonlyaminorinfluenceinthe trade-off betweenparticipationintheEU’s internal EEA Agreement. There areexamplesshowingthatthe consensus whenincorporatingtheEUacquisinto consequences isvisibleintheoccasionallackof Sensitivity regardingeconomicandregulatory EEA EFTA influence market” ensure thecontinuedhomogeneityofinternal encourages themtomaintainthisgoodrecord to of theacquisintotheirownlegislationand excellent record ofproper andregular incorporation EFTA Member Statesatleast [6] [5] [4] ECJ, 2010, 28October Case C-72/09, Rimbaud. Regulation (EC)No1007/2009oftheEuropean Parliament andoftheCouncil of16September 2009ontrade insealproducts. Council oftheEU, Council conclusions onEUrelations withEFTA Affairs countries 3060thGeneral Council meeting, Brussels, 14 “as closelyaspossibletotheadoptionby . The Councillikewiseheldthat . “have demonstratedan [4] . On30 April 2012, , heldthattheEEA “with on tradeinsealproducts Market legislation.RecentexamplesareEUlegislation artistic aspectshaveappearedmoreandinSingle Cultural, social,judicial,environmental,tradeand in theearly1990’s. the classicaldefinitionofSingleMarketasitstood outside ofthescopeEEA,whichstillrelieson upon manymorediversepolicyareas,onceinawhile dimension oftheInternalMarketanymore,buttouches legislation isnotexclusivelyabouttheeconomic intergovernmental elementsofthe EU.SingleMarket the merger oftheCommunity andtheformer The EEA EFTA Stateshavebeenconfrontedwith the SingleMarketandEUitself. several substantialandinstitutionalcharacteristicsof EU hasundergone numerouschanges thathavealtered separable fromotherpolicies.Overtime,however, the Market wasthenaratherstraightforwardone,easily Single European Act. The legaldesignof theSingle discussion wasthe Treaty ofRomeasamendedbythe When theEEA wasnegotiated,thebasisfor of thedevelopmentEUinlasttwodecades. Another fundamentalissueconcernstheramifications Development oftheEUSingleMarket Member States. fruitful cooperationbetweentheEUandEEA EFTA trade aspectsmerge, andthe It islikelythatinfuture,theEEA relevanceofEU exchange ofinformationbetweennationalauthorities. concerning directtaxdiscriminationinvolvingthe and theEEAEFTA Chair, Per Strand Sjaastad, Norway, at ameetingin2011. Subcommittee. The EUChair, Grippa, Gianluca European Service, Action External legislation to beincorporated into theEEAAgreement intheEEAJoint start Formal discussionsbetween theEEAEFTA States andtheEUsideonnew [5] , whereinternalandexternal December 2010. Rimbaud [6] judgment 29 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page30 30 EFTA BULLETIN 2012 disturbing thehomogeneityofSingleMarket enlargement ofthescopeEEA,orrisk as EEA-relevantandwitnesstheclandestine regulation: toacceptsuchlegislationandtheOMC of theEU’s SingleMarketandnewformsof caught inadilemmaresultingfromthedevelopment restraints. The EEA EFTA Statesfindthemselves democracy andtheruleoflaw, ifnotconstitutional implement. Forthem,italsoraisesissuesof find theapproachdifficult toincorporateand Agreement andtheEEA EFTA MemberStatesoften Market hasnotbeenconsideredintheEEA This newapproachtoregulatingpartsoftheSingle instruments, isincreasing. OMC ofresults,ultimatelylaiddowninregulatory and theinformationsociety. The importancetothe pensions, healthcare,research,education,enterprise the economyandemployment,socialexclusion, been appliedtoawiderangeofpolicyareas,suchas elements, butwithoutacleardefinition,theOMChas another challengetotheEEA.Comprisingsoftlaw The OpenMethodofCoordination(OMC) Challenge oftheOpenMethodCoordination Member Statesmoreoften. legislation willchallengetheEEA EFTA countries other agreements withtheEU. The 911pagestudymapstheconsequences oftheEEAAgreement andNorway’s 2012,In January green theNorwegian paper “Outside andInside” was published. [7] Cf. LisbonEuropean Council, Presidency Conclusions, 24March 2000, pp. 37etseq. [7] poses yet dimension inEuropeaneconomicintegrationandthe predicament ofEuropeanstatessmallterritorial economic policyrelationswithSwitzerland,the Iceland (successfulornot),EUmarket-basedand challenges: theapplicationforEUmembershipby repercussions areofinteresttoall. We listfoursuch common thinking.Onewayoranother, the character, despitethetraditionofavoidingsuch will havetocomeupwithanswersofastrategic rapidly. The typesofchallengesaresuchthattheEEA The externalenvironmentoftheEEA ischanging responses The EEA’s strategicenvironmentinvitesadequate be answered. when itcomestoagencyparticipation,willhave guaranteeing well-definedrightsandobligations however, thecallforaformalprocedure, number andimportanceofEUagenciesincreases, currently participatein13EUagencies. As the solutions tothischallengeandtheEEA EFTA States involved providedformoreorlesssatisfactory agencies. Untilnow, theflexibilityofallparties participation ofEEA EFTA Member Statesinsuch The EEA Agreement doesnotformallyregulatethe Market isincreasingsteadily. agencies, theirroleinthegovernanceofSingle cannot becomparedwithUSindependentregulatory as itwasfirstdesigned.EventhoughEUagencies of regulatoryautonomyandpower, isalientotheEEA agencies, particularlyagenciesthathavesomedegree Finally, theincreasingnumberand powerofEU The risetopowerofEUagencies committees relevanttotheSingleMarket. of theEuropeanParliament,particularlyin the EEA EFTA countriesintheinternaldeliberations Agreement doesnotprovideforanyparticipationby challenged bythisdevelopment,astheEEA implementation oftheresultingacquis–is phase ofnewlegislationinexchangeforthe the EEA –participationinthedecision-shaping with theEuropeanCouncil. The politicaldesignof Parliament, nowafullyfledgedlegislatortogether Yet anotherissueconcernstheroleofEuropean The EuropeanParliament in theEEA Agreement. with possiblypainfulconsequencesasprovidedfor 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page31 time was designedforthesevenEFTA countriesatthe Icelandic applicationforEUmembership. The EEA The firstqueryisofcourseadirectconsequencethe features? might somehowbelinkedtotheEEA orsomeofits imaginable thatanewarrangementwithSwitzerland could newmembersaccedetotheEEA? And isit function withjusttwocountriesontheEFTA sideand Questions havetobeposedsuchas:couldtheEEA other thanSwitzerland(asanEFTA country). possible openingupofEEA membershiptocountries desirability andfeasibility. the sameyear. Thus, itismoreaquestionofpolitical until Liechtenstein’s accessiontotheEEA inMayof already beenhistoricallyprovenfromJanuary1995 That theEEA canfunctionwithjusttwomembershas organs orifitwouldentail are-designoftheEEA. adaption ofthedecision-makingandenforcement adaption ofthegiveninstitutionalstructures,i.e. question raisediswhethersuchareformjustincludes structural reformsoftheEEA appearinevitable. The would finallytakethesteptoaccedeEU, (given therelativelysmallcountriesnow).IfIceland the costsofmanagingEEA arecomparativelyhigh [8] Including Liechtenstein, whichwasnotaformal memberofEFTA until1991. [8] , itsinstitutionalstructureishighlycomplexand 30 well. The anniversary partyseemswell-deserved. associated withtheEU.IthasservedcurrentEEA- economic integrationfornon-EUcountriesclosely boil downtowhethertheEEA canserveasamodelfor unlikely togoaway. The strategicissuewillintheend as casuallysomeadvisorssuggestthem,buttheyare success. Onemightrejectsomesuchthoughts,above, the EEA hasbecometheambassadorofitsown As asuccessfulintegrationinstrumentfortwodecades, become amemberoftheEEA. countries seekingEUmembershipinthelongrunmight Turkey orsomeEuropeanNeighbourhoodPolicy occasionally (andindeedrathercasually)suggestedthat leaders inEuropeortheirclosestadvisorshave EEA-like framework.Lastbutnotleast,somepolitical the relationswithSwitzerlandshouldberegulatedinan According totheCouncilconclusionofDecember2010, their integrationoptions,oneofwhichistheEEA. countries ofsmallterritorialdimensioncurrentlyreassess possibility forotherEuropeancountries. The European moment EFTA membershipdoesnotseemtobeaneasy contracting partytotheEFTA convention.Forthe agreement, whichisnotanEUMemberState,tobea Currently Art. 128EEA requiresanynewpartytothe Can theEEA beenlarged withnewcontractingparties? 31 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page32 32 EFTA BULLETIN 2012 EUROPEAN INTEGRATION THE EFTA ADVISORY BODIESAND as the World Trade Organization multilateral follows closelyEFTA third-countryrelations,aswell and theirimpactontheEEA. The Committeealso matters andthelatestpoliticaldevelopmentsinEU EFTA countries. The CommitteeworksonEEA 1977 andisaforumforparliamentariansfromthefour The EFTA ParliamentaryCommitteewasformedin and workersintheEEA EFTA States. policies andhowtheycouldaffect industry, businesses gives itsviewsonnewEUproposalsforlegislationor EEA andEFTA freetradeagreements. The Committee awareness ofthesocialandeconomicaspects partners andtheEFTA authorities.Itaimstoraise and isaplatformfordialoguebetweentheEFTA social employers’ organisations inthefourmembercountries 1961, hasrepresentativesfromtradeunionsand The EFTA ConsultativeCommittee,establishedin including theEEA andinternationaltradeissues. EFTA Ministersandofficials on EFTA affairs, Committee andtheParliamentaryCommittee,advise EFTA’s twoadvisory bodies, theConsultative Georg Reisch, EFTA Secretary-General, and Willy Clercq, De MemberoftheEuropean Parliament andformerECCommissioner. EFTA andECparliamentarians metinLinköpingSweden inJune1992, celebrating thesigningofEEAAgreement. From left: Committees andhaveservedaschairmen. Labour. Botharelongstandingmembersofthetwo Secretary-General oftheIcelandicConfederation Labour Party, and MrHalldórGrönvold,Deputy Hansen, aMemberofParliamentfortheNorwegian The EFTA BulletinhasinterviewedMrSveinRoald of theEEA amongmembersoftheEESCandEP. counterparts hascontributedtoanincreasedawareness forums fortheEFTA side,andthecontactwithEU formal committeesarevaluabledecision-shaping through jointbodiesthatmeetonaregularbasis. These the EuropeanParliament(EP),wereinstitutionalised European EconomicandSocialCommittee(EESC) Committees andtheircounterpartsontheEUside, force oftheEEA Agreement, relationsbetweenthe EC, andlater, theEUcountries. With theentryinto maintained regularcontactswiththeircolleaguesinthe parliamentarians andthesocialpartnershave Since theestablishmentof Association, theEFTA human rightsandenvironmentalpolicies. negotiations andotheraspectsoffreetrade,suchas Nic Grönvall, Swedish Conservative MP, 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page33 participation inanincreasingnumberofEU EEA Agreement hasbeenstrengthenedthroughour the eastwasonlyavision. The cooperationwithinthe dynamics oftheEUcooperation. The enlargement to Indeed. At thetime,noonecouldhavepredicted host country'sowncitizens. countries, includingthesecurityofbeingtreatedas opportunities tostudy, workand settleinother to 500millionEuropeans. This hascreatednew removed nationalbordersthatrepresentedanobstacle emphasise thatthroughtheinternalmarketwehave seen, untilthefinancialcrisisin2008.Iwouldalso contributed tothestrongeconomicgrowthwehave modernise theeconomiesofallcountriesand created alevelplayingfieldforcompetition,helpedto interdependent. The common legalframeworkhas countries whoseeconomiesarestrongly it possibletointegratethecountriesofEurope, The SingleMarketandtheEEA Agreement havemade New Opportunities to Studyand New Opportunities Work 2. 1. [9] Member of the Norwegian Parliament oftheNorwegian Member (LabourParty). nineties? differently from whatyouexpectedintheearly If youthinkback,hastheEEA developed of theSingleMarket? agreement, whatare thegreatest achievements SingleSingle andthesigningofEEA have passedsincetheinaugurationof Mr Hansen,lookingbackover the20yearsthat Committee EFTA Parliamentary Svein Roald Hansen [9] the integrationprocessofSingleMarket. has overthelastyearsshowntobejustasdynamic programmes. Inaddition,theSchengencooperation the eurocooperation. countries, andwhichcouldthreatenthefoundationsof unemployment ratesandsocialproblemsinseveral The economiccrisis,whichhascreatedsuchhigh European countries. The enlargement oftheEEA withthetenCentral- been respected. upon regardingbudgetdeficitsandpublicdebthadnot high debts. The commonguidelinestheyallhadagreed created large budgetaryimbalances andunsustainable revealed thatsomeofthemembercountrieshad The financialcrisisthatstartedintheautumnof2008 3. 5. 4. Single Market? What istoday’s greatest challengetothe What isyour mostmemorableEEA moment? what hasgonewrong? facing itsgreatest economiccrisissince WWII; However, onitstwentiethanniversary, Europe is increased European tradeandeconomicgrowth. bringing prosperity toEurope andhowithas There is muchtalkabouttheSingleMarket 33 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page34 34 EFTA BULLETIN 2012 parliaments oftheEUMemberStates. between theEuropeanParliamentandnational various formsofcooperationthatisdeveloping countries' parliamentswillhavetoparticipateinthe interests inthecooperationwithEU,EFTA become moreimportant.Ifwearetoprotectour parliamentarians andtheEuropeanParliamenthas parliamentarians inEFTA andbetweenEFTA increased intheEU,cooperationamong As theEuropeanParliament'sroleandpowerhave 7. 6. Parliamentary Committee; AndriLútherson, EFTA Secretariat; andAndrisPiebalgs, Energy Commissioner, European Commission. Secretariat; Bilyana Raeva (Liberals, Bulgaria), Vice-President ofEEAJoint Parliamentary Committee; Quaderer (Patriotic Harry Commissioner, European Commission; Paul Rübig(ChristianDemocrats, Austria), MemberofEEAJoint Parliamentary Committee; Henr in themargins ofthemeetingEEAJoint Parliamentary Committee inMarch 2009inStrasbourg. From leftto right: Benita Two Commissioners were amongthespeakers at theEEAJoint Parliamentary Committee’s ofEnergy Forum Supplyandthe onSecurity Norway butalsoinIcelandandLiechtenstein,as been welcomedandwidelydebatednotonlyin The NorwegianReviewCommittee’s report has work oftheCommitteeinnear future? the yearsandwhatare your expectationsfor the EEA contextandhowhasitdevelopedthrough What istherole oftheparliamentariansin influence. cooperation andwethereforehavemuchless the UnitedKingdom,butweareoutsidepolitical cooperation agreements. We aremoreintegratedthan Schengen agreementandthroughover70other Market bymeansoftheEEA,butalsothrough is integratedintotheEU,notonlyinSingle shows howstronglyandcomprehensivelyNorway The mostimportantelementofthereportisthatit Member States. the threeEFTA EEA countrieshavebecomeEU Yes, Ireallyhopeso. And ifnot,Ihopeit'sbecause 8. Will wecelebratethe30 the mostimportantfindingsofreport? well ashere inBrussels. What inyour viewwere the EEA? Union, Liechtenstein), President ofEEAJoint Impact ontheFinancial Market, Impact held Ferrero Waldner, Relations External ik Olsen, European Parliament th anniversary of © Photo: European Parliament 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page35 growth process. more enhancedroleintheEuropeanintegrationand Market isacontinuousprocesswhichdeserves economic developmentsinEurope. The Single current andfutureexitstrategiesmacro- paramount tolinktheSingleMarketmoreclosely current economicandfinancialcrisis. This makesit especially importantagainstthebackdropof in theEuropeanEconomic Area (EEA). This is vehicle forsmart,sustainable,andinclusivegrowth revitalised inordertoserveasamoreefficient to bearinmindthattheSingleMarketneedsbe successful Europe2020strategy. Hereitisimportant Market isbothaprerequisiteandsupportfor integral partofEurope2020. A dynamicInternal Single Marketandtheintentiontorevitaliseitasan consumers. Iwelcometherenewedfocuson in theSingleMarketamongcitizens,workers,and while atthesametimecreatingrenewedconfidence Europe sodesperatelyneedstoexitthecurrentcrisis advantage oftheremainingpotentialforgrowththat The challengenowis,morethanever, totakefull and jobcreationforalmosttwodecades. Market hasbeenadrivingforceforeconomicgrowth rules. InmymindthereisnodoubtthattheSingle integration withasetofunparalleledinstitutionsand The SingleMarketisauniquefeatureofEuropean A DrivingForce for Decades 2. 1. [10] Deputy Secretary-General oftheIcelandic Confederation Secretary-General ofLabour.Deputy Single Market? What istoday’s greatest challengetothe greatest achievementsoftheSingleMarket? the signingofEEA agreement, whatare the since theinaugurationofSingleMarketand Looking backover the20yearsthathavepassed Committee EFTA Consultative Halldór Grönvold [10] maximise thepotentialofSingleMarket. take ”ownership”ofthenew Act andinthisway membership organisations areready, willingandableto Market. The social partnersthroughtheirnetworkof to recognisethiswhenfurtherdevelopingtheSingle partners intheeconomyandurge the relevantauthorities Finally, Iwouldliketostress the specificroleofsocial Market cover30EEA StatesandnotonlyEU-27. Market andthattherightsobligationsinSingle EFTA StatesarefullyintegratedpartnersintheSingle constantly remindourEUpartnersthatthethreeEEA For theEEA EFTA Statesthechallengeisalsoto professional qualifications. reform thesystemofmutualrecognition mismatches, improvelifelonglearningmeasuresand equality innewjobs. We mustaddressskills quality, sustainability, andperspectiveofgender is crucialnotonlytoconsiderthequantity, butalsothe especially inthecurrenteconomicandsocialcrisis.It development andjobcreationintheSingleMarket, Here Iwanttoemphasisetheimportanceofskills for thesocio-politicallegitimacyofSingleMarket of industrialrelationsystemsiscrucial.Itimportant are essential. At thesametimerespectfordiversity and therightswell-beingofworkerscitizens social developmentsinEurope. The socialdimension four freedomsenablehigherlevelsofprosperityand social systemsandsafeguardingimplementingthe rights areessentialfeaturesofEuropeaneconomicand Europe. Economicfreedomsandsocialfundamental instrument toachieveeconomicandsocialprogressin As Ihavealreadysaid,theSingleMarketisakey sure thatwewillsucceed. at EFTA and EEA leveltofightforsuch ideasandIam mind itisinthecommoninterestsofsocialpartners within anEUandpossiblealsoEEA framework.Inmy the MontiIIprovisiontoharmoniserightstrike I fullyagreewiththosewhohavecriticisedandoppose 3. rights ofbusinessinmindrather thanthecitizens? Single Marketbeenestablishedmore withthe by influentialpolicyshapinggroups. Hasthe within anEUframework. This ismuchopposed discussed, thatisharmonisingtherighttostrike Currently theMontiIIprovision isbeing 35 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page36 36 EFTA BULLETIN 2012 of theSingleMarket. labour marketsdonotunderminethesocialdimension that anyreformsatEuropeanlevelorofnational standards ofsocialprotectionbyapplying prevent socialdumpingandencouragehigh ensuring thatlabourmarketrulesaredesignedto “Furthermore, Icelandemphasisestheimportanceof the EUonsocialpolicyandemployment: by theIcelandicgovernmentinaccessiontalkswith would liketoquotefroma“GeneralStatement”made Norwegian governments. To showwhatImean, This hasbeenemphasisedbothbytheIcelandicand Member State. the protectionofworkerspostedtoanother should gohandinwithguaranteeing of servicesbycompaniesinanotherMemberState rights, iscrucial.Facilitatingthetemporaryprovision while reconcilingeconomicfreedomsandworkers’ social dumping.Improvingcross-borderservices, and wehavewitnessedmanyseriouscasesof rights ofworkersinatleastsomeEuropeancountries threat totheindustrialrelationssystemsand It istruethatcross-borderserviceshaveposeda 4. Radmann, Director oftheNHOBrusselsOffice. Søilen (NHO-Confederation Enterprise) ofNorwegian exchange viewswith Trine -Federation(Virke Commercial Enterprises) ofNorwegian andEspen andService reviewNorwegian oftheEEAAgreement. Committee members Thomas Angell In March 2012inBrussels, theEFTA Consultative Committee discussedtherecent in NorwayandIceland? in themore affluentolder Member States-and Member Statestounderminenationalworkers exploited workershavearrivedfrom thenewEU have merely enabledsocialdumping,as not sothatthethrustofregulations inthisfield efficiency intheSingleMarketfor services.Isit Much hasbeensaidaboutincreasing the enforcement ofworkers’ rights.” contractors andsub-contractorsinordertoensure introduction ofjointresponsibilityandliabilityfor application ofcollectiveagreements,andthe include, interalia,aneffective systemforgeneral standards intheworkplace.Suchmeasuresmay and postedworkers’ rightsandmaintaininghigh appropriate measuresaimedatprotectingdomestic EFTA Secretariat inourwork. have alsohadgoodandimportantsupportfromthe the bestsenseofthatwordwithinthisCommittee. We develop aconstructiveandprogressivecooperationin many years. The socialpartnershavemanagedto has characterisedtheworkwithinCommitteefor Committee’s successisthegoodandfriendlyspiritthat One importantexplanationfortheConsultative EFTA sideconcerning theEEA. continue tomakeimportantcontributionsthe regards thefutureIamsurethatCommitteewill the decisionmakingatEFTA andEEA levels. As have astrongerinfluenceinthedecisionshapingand in itsworkalthoughwewouldoftenhavelikedto Consultative Committeehasinprinciplesucceeded the EUaccessioncountries.Ithinkthat countries, andalinktosocialpartnersintheEU dialogue betweensocialpartnersfromallEFTA that affect thesocialpartners. Itshallbeaforumfor and EEA agenda,andinfluencepoliciesintheareas Committee istotakepartintheshapingofEFTA The aimandmissionoftheEFTA Consultative side andwhatkindofEEA willwehavethen? will beontheEFTA sideandwhowillbeontheEU Yes. Iamsurethatwewill.Butthequestioniswho 5. 6. the near future? expectations for theworkofCommitteein through theyearsandwhatare your in theEEA contextandhowhasitdeveloped What istherole oftheConsultativeCommittee Will wecelebrate the30 EEA? th anniversary ofthe 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page37 opinions.aspx The documentsaboveare allavailableinelectronic formonwww.efta.int/advisory-bodies/reports-resolutions- Resolution ontheEEA andNorwegianFinancialMechanisms-16May2007 Resolution andreport onEurope 2020-18May2010 Resolution andreport onFinancialreform intheEEA -19May2010 Resolution andreport onTheSingleMarket Act -12May2011 Resolution andreport ontheEnterpriseDimensionofInternalMarket-4May2012 Resolution andreport ontheEEA review -4May2012 EEA ConsultativeCommittee The European Neighbourhood andNewChallengesforEFTA -27 April 2005 A NewStrategy fortheInternalMarket-26 April 2006 Opinion onTheTreaty ofLisbon andtheEEA -12March 2008 Opinion onasinglemarketforthe21stcentury-30June2008 Opinion onTheCitizen’s Approach totheSingleMarket-12December2011 EFTA ConsultativeCommittee Report on:‘TheimplementationofEEA legislation’'-4October2006 Report on:‘Enlarging theEEA:ExperiencesandPerspectives’ -4October2006 Report on:‘TheOpenMethodofCoordination andtheEEA’ -7November2007 Report on:‘HealthServicesintheEuropean Economic Area’ -29 April 2008 Report on:‘Future PerspectivesfortheEuropean Economic Area’ -4November2008 Report on:‘TheEEA andtheGlobalFinancialCrisis:Promoting Recovery’ -28October2009 Report on:‘EEA andRegionalCooperation:NewChannelsforDialogue’ -29March 2010 Report on:‘Europe 2020:InnovationandtheEEA’ -25November2010 Report on:‘EUDigital Agenda andtheEEA’ -26October2011 Report on:‘TheReviewoftheEEA’ -3May2012 EEA JointParliamentaryCommittee andOpinions Reports Selected 37 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page38 38 EFTA BULLETIN 2012 Iceland’s merchandise imports: 1995-2011(millionEUR) trade forthethreeEEA EFTA countrieswiththeEU,restofEuropeandworld. provides forhomogeneouslegislationremovaloftechnicalbarrierstotrade.Figures16showmerchandise The EEA Agreement ensuresfreemovementofgoodsbetweenIceland,Liechtenstein,NorwayandtheEU Merchandise Trade EEA INFIGURES Source: Eurostat (DS_043227) Iceland’s merchandise exports: 1995-2010(millionEUR) Source: Eurostat (DS_043227) 1 000 1 500 2 000 2 500 3 000 3 500 1 000 1 500 2 000 2 500 3 000 3 500 500 500 0 0 9519 9719 9920 0120 0320 0520 0720 0921 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 9519 9719 9920 0120 0320 0520 0720 092010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-27 EU-25 EU-15 Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-27 EU-25 EU-15 Fig. 1 Fig. 2 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page39 Liechtenstein’s merchandise exports: 2009-2011(millionEUR) Liechtenstein’s merchandise imports: 2009-2011(millionEUR) Source: Eurostat (DS_043227) Source: Eurostat (DS_043227) 1 000 1 200 1 400 1 600 1 800 1 000 1 200 1 400 1 600 1 800 200 400 600 800 200 400 600 800 0 0 Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-27 Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-27 0921 2011 2010 2009 0921 2011 2010 2009 Fig. 3 Fig. 4 39 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page40 40 EFTA BULLETIN 2012 Norway’s merchandise exports: 1995-2011(millionEUR) Norway’s merchandise imports: 1995-2011(millionEUR) Source: Eurostat (DS_043227) Source: Eurostat (DS_043227) 100 000 100 000 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 0 0 9519 9719 9920 0120 0320 0520 0720 0921 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-27 EU-25 EU-15 Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-27 EU-25 EU-15 Fig. 5 Fig. 6 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page41 Source: Statistics Norway Source: StatisticsIceland (number ofpersons, annualaverage) Migration to andfrom Iceland: 1996-2010 (number ofpersons, annualaverage) Migration to andfrom Norway: 1996-2010 the lastyears,butahighnumberofimmigrantsarealsocomingfromEU15andrestworld. For Norway, asubstantialincreaseinimmigrationfromthenewEUMemberStates(EU12)hasalsotakenplaceover immigration tothecountryfromnewMemberStates(EU12),especiallysinceenlargement oftheEUin2004. While Icelandhasobservedanetemigrationtothe“old”EUMemberStates(EU15),therebeen movement ofcitizenstoandfromIcelandNorwayintheperiod19962010(dataforLiechtensteinisnotavailable). Free movementofpersons(workers)isanessentialparttheEEA Agreement. The statisticsbelowillustratethe Migration Figures for Iceland andNorway 1000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 20 000 30 000 40 000 50 000 60 000 70 000 0 0 Immigration 1996-2000 Immigration 1996-2000 EU-15 States) EU-12 (newMember Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) EU-15 States) EU-12 (newMember Rest ofEurope (Russiaincluded) Rest of World (Europe excluded) Emigration 1996-2000 Emigration 1996-2000 Immigration 2001-2005 Immigration 2001-2005 Emigration 2001-2005 Emigration 2001-2005 Immigration 2006-2010 Immigration 2006-2010 Emigration 2006-2010 Emigration 2006-2010 Fig. 7 Fig. 8 41 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page42 42 EFTA BULLETIN 2012 at thetimeofsigningin1992andsubsequentadditions) intheEEAAgreement:EU legalacts ofacts 1992-2010(numberandtype implementation. effect intheEUMemberStates(althoughnotEEA EFTA States),ensuringsimultaneous andharmonious This ispartlyduetoatrendwherebydirectivesarebeingrevisedandreplacedbyregulations,asthelatterhavedirect While inthebeginning,directivesweremorenumerousthanregulations,reversehasbeencasesince2005. figure 10). and 400.ByDecember2010,theEEA Agreement contained7464acts,ofwhich4179weretheninforce(see The figurebelowshowsthatforthelastdecade,numberofactsincorporatedannuallyhasbeenbetween200 incorporated in1998and1999aspartofthe“veterinarypackage”. in theEUbetween1992and1994,whenEEA Agreement enteredintoforce. A large numberofactswerealso were incorporatedin1994,mostofwhich(479)partasupplementarypackagethatreflecteddevelopments At thetimeofsignaturein1992,EEA Agreement’s annexesandprotocolsincluded1875legalacts. Another 530 the EEAAgreement Incorporation ofEULegal into Acts Source: EFTA 1 000 1 200 1 400 1 600 1 800 2 000 200 400 600 800 0

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2010 Fig. 9 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page43 December 2010 (shares ofthe4179 incorporated inforce) acts intheEEAAgreement:Breakdown areas ofEUlegalacts by policy Source: EFTA Other: (0.7%), Consumer liability andproduct protection energy (0.6%), rights(0.6%), property intellectual procurement (0.6% * 2000), mainlyveterinaryactsofshort-livednature,arenotincludedhere. several oldactshavebeenreplacedbynewonesorrepealed. Acts takenoverbysimplifiedprocedure(847since lower thanthenumberofallactsthathavebeenpartorincorporatedinto Agreement since1992(7464),as number of“active”EUlegalacts(inforce)inthe Agreement’s annexesandprotocols. The totalnumber(4179)is The figurebelowgivesasnapshotofthesizevariouspolicyareasinEEA Agreement, representedbythe Legal intheEEAAgreement Acts by Policy Areas qualifications (0.3%), andfree movement ofworkers (0.2%). Cooperation inprogrammes andagencies(3.6%) Environment (4.8%) Statistics (7.2%) Transport (8.6%) Veterinary matters andphytosanitary (28.0%) (33.6%) certification Technical regulations, standards, testing and Other (2.9%)* Other Competition andstate aid(1.2%) Company law (1.4%) (1.5%) Social policy of capital(2.3%) Financial andfree movement services (2.4%) society Audiovisual services, ICTandinformation (2.5%) Social security ), recognition ofprofessional Fig. 10 43 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page44 44 EFTA BULLETIN 2012 and Agencies: 1995-2012(millionEUR) Financial contributions from theEEAEFTA States to EUProgrammes Source: EFTA EFTA States’ grossnationalproduct(GDP)relativetothetotalGDP oftheEUMemberStates. The EEA EFTA StatescontributefundstotheEUprogrammesandagenciesinproportionsizeofEEA programmes representthelargest budgetcontributions,witharound85%oftotalannualexpenditure. 26 programmesand13agencies.ParticipationintheEUresearchframeworkeducational by theirfinancialcontributionstotheEUbudgetfrom19952012.In2012,thiscooperationincluded The EEA EFTA StatesareparticipatinginagrowingnumberofEUprogrammesandagencies,asillustratedbelow Participation inEUProgrammes andAgencies 100 150 200 250 300 350 50 0 9519 9719 9920 0120 0320 0520 0720 0921 012012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Fig. 11 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page45 (2004-2014) (millionEUR) The jointcontributions oftheEEAGrants Grants (1994-2014)and Norway Source: EFTA institutions, andthepublicprivatesectors. justice andhomeaffairs. Grants areavailablefornon-governmentalorganisations, researchandacademic climate change,civilsociety, childrenandhealth,culturalheritage,researchscholarships,decentwork, Poland, Portugal,Romania,Slovakia,SloveniaandSpain.Keyareasofsupportincludeenvironmentalprotection Beneficiary countriesareBulgaria,CzechRepublic,Cyprus,Estonia,Greece,Hungary, Latvia,Lithuania,Malta, around 1%. The NorwayGrantsarefinancedbyaloneandamounttoEUR800millioninthisperiod. million setasideforthe2009-14period,Norwayrepresentsaround94%,Icelandcloseto5%andLiechtenstein Iceland, LiechtensteinandNorway, whocontributeaccordingtotheirsizeandeconomicwealth.OftheEUR988.5 two parallelgrantsschemesfinancialmechanismshavebeeninplace. The EEA Grantsarejointlyfinancedby A substantialincreaseofthecontributionstookplacewithenlargement oftheEUin2004.From1May2004, cooperation inprogrammesandprojects. The currentgrantsschemesalsoaimtostrengthenbilateralrelationswiththe15beneficiarycountriesthrough EFTA StateshavecontributedtoEuropeancohesionefforts eversincetheEEA Agreement enteredintoforce in1994. EEA Agreement includesagoaltoreducesocialandeconomicdisparitiesintheEuropeanEconomic Area. The EEA Despite muchprogressinEuropeoverrecentyears,gapseconomicdevelopmentandlivingstandardspersist. The ofEconomicReduction andSocialDisparities 1 000 1 200 1 400 1 600 1 800 2 000 200 400 600 800 0 9419 9920 0420 2009-2014 2004-2009 1999-2003 1994-1998 EEA Grants Grants Norway Fig. 12 45 EFTA BULLETIN 2012 2548-EEA singlemarket-09_EFTABULLETIN23/08/1216:03Page46 46 EFTA BULLETIN 2012 and Norway: 2000-2010(numberofstudents) Outgoing Erasmus studentsfrom Iceland, Liechtenstein Source: European Commission Source: European Commission and Norway: 2000-2010(numberofstudents) Incoming Erasmus studentsto Iceland, Liechtenstein tripled forbothIcelandandNorway. categories, themostnoticeabledevelopmentissharpincreaseinnumberofincomingstudents,whichhas incoming Erasmusstudentshavedevelopedoverthelastdecade. While thenumbershaveincreasedforboth students fromEEA countriestocometheiruniversities. The figuresbelowshowhowthenumbersofoutgoingand Norway tostudyinanotherEEA countryundertheErasmusprogrammeanditspredecessors,aswellallowing EEA EFTA participationinEU’s educationalprogrammeshasallowedstudentsfromIceland,Liechtensteinand Erasmus Student Mobility 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 500 500 0 0 2000/2001 2000/2001

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The European Free Trade Association (EFTA) is an intergovernmental organisation for the promotion of free trade and economic integration, to the benefit of its four Member States: Iceland, Liechtenstein, Norway and Switzerland. The Association is responsible for the management of:

• The EFTA Convention, which forms the legal basis of the organisation and governs free trade relations between the EFTA States; • EFTA’s worldwide network of free trade and partnership agreements; and • The Agreement on the European Economic Area (EEA), which enables three of the four EFTA Member States (Iceland, Liechtenstein and Norway) to participate fully in the Internal Market of the European Union.

The EFTA Bulletin is intended to serve as a platform for discussion and debate on topics of relevance to European integration, as well as the multilateral trading system. In this endeavour, the EFTA Bulletin draws on the experience and expertise of academics, professionals and policy makers alike.

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