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Tenth anniversary of the EEA Agreement

Ladies and Gentlemen,

I would like to thank the EFTA Parliamentary and Consultative Committees for organising this conference and bringing so many distinguished speakers and guests here to Reykjavik to discuss the very relevant issue of the EEA and EFTA in a new Europe. The Parliamentary and Consultative Committees play an important role for the EFTA States and I am of the opinion that the good work done by the Parliamentary and Consultative Committees has strengthened EFTA as an organisation and our co-operation with the European Union.

This conference is held to mark the tenth anniversary of the EEA Agreement. It so happens that this year also marks the centenary of Home Rule in Iceland and the 60th anniversary of Iceland’s independence. Home Rule brought parliamentary democracy to Iceland and independence marked the establishment of the Republic of Iceland. These two events have therefore certainly given cause for reflection on the value of our independence and democratic heritage for modern day Iceland.

Since Iceland became independent 60 years ago, the overriding objective of Iceland’s foreign policy has been to actively participate in international co-operation, while at the same time defending Iceland’s fundamental interests and preserving our identity as an independent nation. Iceland has always sought close relations with its friends and neighbours. Yet, at the same time, our history has taught us the value of being able to shape our own destiny.

Iceland has gained much by its participation in EFTA. This conference will for the most part be devoted to the EEA Agreement and its future co-operation with the enlarged Union, and I will turn to that later. I would however like to start by mentioning the importance of the co-operation between the four remaining EFTA States. EFTA´s successful and numerous Free Trade Agreements with third countries is just one example of what we can achieve when we work together. The EFTA States are the EU’s second largest trading partner and account for 2% of worldwide trade, which is comparable to Mexico and South Korea and considerably more then Russia. What is even more important; Iceland, Norway, Liechtenstein and Switzerland are all among the top five of countries of the world with the highest GDP per capita.

We can therefore safely say that the EFTA States are doing very well. Although Switzerland did not join the rest of us in the EEA we very much value Switzerland’s present contribution to EFTA. In my opinion, the achievements of the EFTA States have not happened by mere chance. We all have in common strong democratic traditions, we are all internationalist in the best sense of the word but at the same time we very much value our independence. The experience of the EFTA States demonstrates that being small is no barrier to success in these times of globalisation.

When Jacques Delors, then president of the EC Commission, proposed the creation of a European Economic Area based on the four freedoms, it was a logical extension of the close co-operation that had developed between the EFTA States and the European Community. The EEA Agreement was a great operation for Iceland as it extended the EU internal market to the EFTA States, thereby creating the world largest free trade area. At the same time, policy sectors like fisheries management, agriculture and monetary policy were left outside the scope of the Agreement. As many of you realise, one reason Iceland has never applied for membership is the fact that the EU’s current policy in some of these sectors could possibly threaten some of our most fundamental interests, the Common Fisheries Policy being the most obvious example. The EEA has, therefore, allowed for an alternative way for us to participate in European integration and to secure our interests in Europe.

The EEA Agreement entails both rights and obligations – for both parties. The EEA Agreement gives businesses and citizens in the EU States all the same rights and opportunities in the EFTA States that businesses and citizens of the EFTA States enjoy in the EU. The EEA Agreement also requires the EFTA States to abide by the same rules as the EU Member States. The EFTA States adopt internal market legislation that is relevant to the EEA Agreement, just like any EU Member State. And what is the record of the EFTA States in implementing internal market law? Very good in fact and far better then some of the EU Member States, especially those that supposedly are part of EU’s inner core.

The EFTA States are also part of the EU´s pillar of solidarity and contribute more per capita than most EU Member States towards decreasing the economic and social disparities among the different regions of Europe. In the EEA context Norway and Icelandare in fact net contributors to the EU, among only eleven other countries in Europe. Iceland and Norway take part in the Schengen co-operation and Switzerland will also soon participate, making these countries a part of a common borderless area in Europe. The EFTA States have also co-operated closely with the EU in its foreign and security policy. Apart from that all the EFTA States are members of the Council of Europe, the OSCE and other international organisations that contribute to security, democracy and respect for human rights in Europe. Norway and Iceland are members of NATO and contribute to its peacekeeping missions, but also to the EU led missions in the Balkans. In short, the EFTA States are very much active participants in European co-operation and wish to continue enhanching that participation in the future.

Recent events have clearly illustrated that the EEA Agreement enjoys broad political support on both the EFTA and the EU sides. This was evident when the Commission tried unsuccessfully to get the EU Member States to endorse its plan to demand from the EFTA States an increase of almost forty times their contribution to the EU Structural policy - and this increase was to be a precondition to EEA enlargement! Fortunately, with the support of the Member States, we managed to get the negotiations back on a more sensible track and conclude the EEA enlargement. This outcome was a clear signal that the political leadership of the European Union had every intention of honouring the EEA Agreement.

We can see recent examples that demonstrate that the EEA Agreement is functioning very well. Just one example is the EU regulation on civil aviation security. This regulation was clearly relevant for the EEA Agreement. However, while it was important for our international aviation sector that we would adopt these rules, fully enforcing them in our domestic airports would have been far too expensive and unnecessary in the light of Iceland’s geographical position. While it is uncommon that individual countries get exemptions of this sort to internal market rules, the Commission nevertheless agreed with our reasoning that there were no grounds for applying this regulation to Iceland’s domestic airports.

Ten years after the EEA Agreement entered into force, Europe has indeed arrived at a junction. The recent enlargement of the Union is still being digested so to say but its impact on the Union will be without president. Further enlargement of the EU is anticipated and will include countries that until recently were at war with each other, underlining that the goal and greatest achievement of the European Union, to preserve peace in Europe, is still valid.

It will be interesting to follow the next steps. Will Romania and Bulgaria join in little more then two years? How will the issue of Turkey’s membership be dealt with? And when will the countries of the Western Balkans be ready to fulfill the criteria for membership? How will the proposed Constitution for Europe fare in referendums across Europe? And further on, what will the reaction be in Brussels if voters in one or more Member States decide to reject the Constitution?

The European Union is truly faced with important decisions that will have major consequences for the whole of Europe in the years to come. Iceland as other EFTA states will follow these developments with interest since the outcome of it will affect us in many ways, despite the fact that we are not part of the decision making process. Some might say that the same goes for the most of Europe, and that the integration is too much driven by the few in Brussels. The Constitution is an attempt to give more say to the people of Europe and its elected representatives, both in Strassbourgh and in the national parliaments in the EU. The foreseen changes will give the national parliaments a role, which they did not have before. This underlines the fact that parliamentarians in the EFTA states have a limitied chance to follow, let alone influence, the decision making in the EU, even when these decisions will be felt in the EFTA countries just as much as in the EU countries. It is therefore important, and I urge you, to seek ways to consult with collegues in the European Parliament and in the national parliaments on issues of concern to us. The same applies to the social partners, who also need to be active in presenting our interests and views to their counterparts in the Union.

Without question, the European Union has changed and developed greatly since the EEA came into force only ten years ago, much more than we thought possible at the time. The driving force did not always come from within the Union, its development was very much shapen by the events that changed Europe and the world and has become evident in the latest enlargement of the EU. A process very much supported by the EFTA states.

Looking back, the EEA agreement has from Iceland’s point of view stood the test of time, even if it started off with the bulk of the EFTA countries eloping to the other side. With only a few of us remaining outside the EU the odds seemed against us. The ones who predicted that the EEA thus would be shortlived were however proven wrong. I’m convinced that the Agreement has every potential to remain the firm basis for our relations with the EU provided that the EFTA/EEA side remains the same. It will however continue to be a demanding task and an uphill battle. We should therefore focus our efforts on strengthening the foundations that have made the co-operation between the EFTA States the success that it is. A conference as this one today hopefully does just that, strengthen the ties and co-operation between the EFTA states themselves but also –looking at the list of participants – between the EFTA and the European Union.

I look forward to our interesting and important talk today and at dinner tonight, and I am confident that there is room and a role to play for the EFTA countries in the new Europe taking shape today.

Thank you.

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