The European Economic Area comprises three of four member states of the European Free
Trade Association, and 27 of 28 member states of the European Union, with Croatia provisionally
applying the agreement pending its ratification by all EEA countries. It was established on
1 January 1994 following an agreement with the European Community. It allows the EFTA-EEA
states to participate in the EU's Internal Market without being members of the EU. They
adopt almost all EU legislation related to the single market, except laws on agriculture
and fisheries. However, they also contribute to and influence the formation of new EEA
relevant policies and legislation at an early stage as part of a formal decision-shaping
process. In addition, independence and direct membership of international bodies in their
own right means the countries are able to participate in and become signatories to various
conventions, such as the Basel Convention of 1992, that are only adopted by the EU many
years later. One EFTA member, Switzerland, has not joined the EEA but has a series of
bilateral agreements, including a free trade agreement, with the EU.
Origins
In the late 1980s, the EFTA member states, led by Sweden, began looking at options to
join the then European Communities. The reasons identified for this are manifold. Many authors
cite the economic downturn in the beginning of the 1980s, and the subsequent adoption
by the European Union of the Europe 1992 agenda as a primary reason. Arguing from a liberal
intergovernmentalist perspective, these authors argue that large multinational corporations
in EFTA countries, especially Sweden, pressed for EEC membership under threat of relocating
their production abroad. Other authors point to the end of the Cold War, which made joining
the EU less politically controversial for neutral countries.
Meanwhile, Jacques Delors, who was president of the European Commission at the time, did
not like the idea of the EEC enlarging with more member states, as he feared that it would
impede the ability of the Community to complete the internal market reform and establish the
monetary union. Delors proposed a European Economic Space in January 1989, which was
later renamed to European Economic Area, as it is known today.
By the time the EEA was established, however, several developments hampered its credibility.
First of all, Switzerland rejected the EEA agreement in a national referendum on 6 December
1992 obstructing full EU-EFTA integration within the EEA. Furthermore, Austria had applied
for full EEC membership in 1989, and was followed by Finland, Norway, Sweden, and Switzerland
between 1991 and 1992. The fall of the Iron Curtain made the EU less hesitant to accept
these highly developed countries as member states, since that would relieve the pressure
on the EU's budget when the former communist countries of Central Europe were to join.
Membership The EEA Agreement was signed in Porto on 2
May 1992 by the then seven states of the European Free Trade Association, the European Community
and its then 12 member states. On 6 December 1992, Switzerland's voters rejected the ratification
of the agreement in a constitutionally mandated referendum, effectively freezing the application
for EC membership submitted earlier in the year. Switzerland is instead linked to the
EU by a series of bilateral agreements. On 1 January 1995, three erstwhile members of
EFTA—Austria, Finland and Sweden—acceded to the European Union, which had superseded
the European Community upon the entry into force of the Maastricht Treaty on 1 November
1993. Liechtenstein's participation in the EEA was delayed until 1 May 1995.
As of 2014 the contracting parties to the EEA are 3 of the 4 EFTA member states and
27 of the 28 EU member states. The 28th and newest EU member, Croatia, finished negotiating
their accession to the EEA in November 2013, and since 12 April 2014 is provisionally applying
the agreement pending its ratification by all EEA member states.
The following EFTA countries are included:
The following EU countries are included:
The following EU country is provisionally applying the EEA Agreement:
Future enlargement New EU members
Croatia acceded to the EU in July 2013, which obliged them to apply for EEA membership.
After Slovenia, Croatia has recovered best from the break-up of the former Yugoslavia
and is the second former Yugoslav state to join the EU. According to Eurostat, Croatia
has a stable market economy and its GDP per capita in 2010 was 61 per cent of the EU average,
exceeding that of four other EU member states. EU accession negotiations were concluded on
30 June 2011, and the Treaty of Accession was signed on 9 December 2011 in Brussels.
The Croatian government decided to submit their EEA membership application on 13 September
2012, and negotiations started 15 March 2013 in Brussels, with the aim of achieving simultaneous
accession to both the EU and the EEA on 1 July 2013. However, this was not achieved.
Accession negotiations were expected to be completed by the autumn of 2013, and on 20
November 2013 it was announced that an enlargement agreement was reached. The text was initialled
on 20 December 2013, and following its signature in April 2014 the agreement is being provisionally
applied pending ratification by Croatia, Iceland, Liechtenstein, Norway and the European Union.
By comparison, following the 2007 enlargement of the EU which saw Bulgaria and Romania acceding
to the EU on 1 January 2007, an EEA Enlargement Agreement was not signed until 25 July 2007
and only provisionally entered into force on 1 August 2007. The agreement did not fully
enter into force until 9 November 2011. On the other hand, the EEA Agreement was applied
on a provisional basis to the 10 acceding countries in May 2004 as from the date of
their accession to the EU. There are five recognised candidates for EU
membership that are not already EEA members: Macedonia, Montenegro, Serbia, Albania and
Turkey. Macedonia has not yet started negotiations to join, nor has the European union set any
negotiations start date for Macedonia. The remaining states in the Western Balkans are
considered potential candidates for membership. Bosnia and Herzegovina has signed a Stabilisation
and Association Agreements with the EU, which generally precede the lodging of membership
applications, while Kosovo, whose independence is unrecognised by 5 EU member states, has
finalized negotiations on a SAA. New EEA members
EEA integration, either through EFTA membership or an association agreement directly with
the EEA, has been discussed with regard to the microstates of Andorra, Monaco, and San
Marino; Israel, Morocco, Turkey, and other ENP partners; and the territories of the Faroe
Islands and the Isle of Man. In mid-2005, representatives of the Faroe
Islands hinted at the possibility of their territory joining the EFTA. However, the ability
of the Faroes to join is uncertain because, according to Article 56 of the EFTA Convention,
only states may become members of the Association. The Faroes, which form part of the Danish
Realm, is not a sovereign state, and according to a report prepared for the Faroes Ministry
of Foreign Affairs "under its constitutional status the Faroes cannot become an independent
Contracting Party to the EEA Agreement due to the fact that the Faroes are not a state."
However, the report went on to suggest that it is possible that the "Kingdom of Denmark
in respect of the Faroes" could join the EFTA. The Danish Government has stated that the
Faroes cannot become an independent member of the EEA as Denmark is already a party to
the EEA Agreement. The Faroes already have an extensive bilateral free trade agreement
with Iceland, known as the Hoyvík Agreement. European microstates
In November 2012, after the Council of the European Union had called for an evaluation
of the EU's relations with the sovereign European microstates of Andorra, Monaco and San Marino,
which they described as "fragmented", the European Commission published a report outlining
options for their further integration into the EU. Unlike Liechtenstein, which is a member
of the EEA via the EFTA and the Schengen Agreement, relations with these three states are based
on a collection of agreements covering specific issues. The report examined four alternatives
to the current situation: 1) a Sectoral Approach with separate agreements with each state covering
an entire policy area, 2) a comprehensive, multilateral Framework Association Agreement
with the three states, 3) EEA membership, and 4) EU membership. The Commission argued
that the sectoral approach did not address the major issues and was still needlessly
complicated, while EU membership was dismissed in the near future because "the EU institutions
are currently not adapted to the accession of such small-sized countries." The remaining
options, EEA membership and a FAA with the states, were found to be viable and were recommended
by the Commission. In response, the Council requested that negotiations with the three
microstates on further integration continue, and that a report be prepared by the end of
2013 detailing the implications of the two viable alternatives and recommendations on
how to proceed. As EEA membership is currently only open to
EFTA or EU members, the consent of existing EFTA member states is required for the microstates
to join the EEA without becoming members of the EU. In 2011, Jonas Gahr Støre, the then
Foreign Minister of Norway which is an EFTA member state, said that EFTA/EEA membership
for the microstates was not the appropriate mechanism for their integration into the internal
market due to their different requirements than large countries such as Norway, and suggested
that a simplified association would be better suited for them. Espen Barth Eide, Støre's
successor, responded to the Commission's report in late 2012 by questioning whether the microstates
have sufficient administrative capabilities to meet the obligations of EEA membership.
However, he stated that Norway was open to the possibility of EFTA membership for the
microstates if they decide to submit an application, and that the country had not made a final
decision on the matter. Pascal Schafhauser, the Counsellor of the Liechtenstein Mission
to the EU, said that Liechtenstein, another EFTA member state, was willing to discuss
EEA membership for the microstates provided their joining did not impede the functioning
of the organization. However, he suggested that the option direct membership in the EEA
for the microstates, outside both the EFTA and the EU, should be given consideration.
On 18 November 2013 the EU Commission concluded that "the participation of the small-sized
countries in the EEA is not judged to be a viable option at present due to the political
and institutional reasons", and that Association Agreements were a more feasible mechanism
to integrate the microstates into the internal market.
Rights and obligations The EEA is based on the same "four freedoms"
as the European Community: the free movement of goods, persons, services, and capital among
the EEA countries. Thus, the EEA countries that are not part of the EU enjoy free trade
with the European Union. As a counterpart, these countries have to
adopt part of the Law of the European Union. However they also contribute to and influence
the formation of new EEA relevant policies and legislation at an early stage as part
of a formal decision-shaping process. Agriculture and fisheries are not covered
by the EEA. It has been important for Norway and Iceland to protect themselves from the
Common Fisheries Policy, which would be very negative for them, a major reason not to join
the EU. The EEA countries that are not part of the
EU do not bear the financial burdens associated with EU membership, although they contribute
financially to the European single market. After the EU/EEA enlargement of 2004, there
was a tenfold increase in the financial contribution of the EEA States, in particular Norway, to
social and economic cohesion in the Internal Market. Non-EU countries do not receive any
funding from EU policies and development funds. Legislation
The non EU members of the EEA have agreed to enact legislation similar to that passed
in the EU in the areas of social policy, consumer protection, environment, company law and statistics.
These are some of the areas covered by the European Community.
The non-EU members of the EEA have no representation in Institutions of the European Union such
as the European Parliament or European Commission. This situation has been described as a “fax
democracy”, with Norway waiting for their latest legislation to be faxed from the Commission.
Institutions
A Joint Committee consisting of the EEA-EFTA States plus the European Commission has the
function of extending relevant EU law to the non EU members. An EEA Council meets twice
yearly to govern the overall relationship between the EEA members.
Rather than setting up pan-EEA institutions, the activities of the EEA are regulated by
the EFTA Surveillance Authority and the EFTA Court. The EFTA Surveillance Authority and
the EFTA Court regulate the activities of the EFTA members in respect of their obligations
in the European Economic Area. The EFTA Surveillance Authority performs the European Commission's
role as "guardian of the treaties" for the EFTA countries, while the EFTA Court performs
the European Court of Justice's role for those countries.
The original plan for the EEA lacked the EFTA Court or the EFTA Surveillance Authority,
the European Court of Justice and the European Commission were to exercise those roles. However,
during the negotiations for the EEA agreement, the European Court of Justice informed the
Council of the European Union by way of letter that they considered that giving the EU institutions
powers with respect to non-EU member states would be a violation of the treaties, and
therefore the current arrangement was developed instead.
The EFTA Secretariat is headquartered in Geneva, Switzerland. The EFTA Surveillance Authority
has its headquarters in Brussels, Belgium, while the EFTA Court has its headquarters
in Luxembourg. EEA and Norway Grants
The EEA and Norway Grants are the financial contributions of Iceland, Liechtenstein and
Norway to reduce social and economic disparities in Europe. In the period from 2004 to 2009,
€1.3 billion of project funding is made available for project funding in the 15 beneficiary
states in Central and Southern Europe. The EEA and Norway Grants were established
in conjunction with the 2004 enlargement of the European Economic Area, which brings together
the EU, Iceland, Liechtenstein and Norway in the Internal Market. The EEA and Norway
Grants are administered by the Financial Mechanism Office, which is affiliated to the EFTA Secretariat
in Brussels. See also
EudraVigilance European integration
Free trade areas in Europe Central European Free Trade Agreement
EFTA
EU enlargement to EFTA states Accession of Iceland to the European Union
Liechtenstein–European Union relations Norway–European Union relations
Switzerland–European Union relations
National identity cards in the European Economic Area
Parallel importation Passports of the European Economic Area
Schengen Agreement Trade bloc
References
External links Text of the EEA Agreement
Information about the EEA on the website of the Mission of Norway to the EU
EEA Grants and Norway Grants The EU and the European Economic Area Europa:
External Relations