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Twenty-five years ago, Europe was still in the grip of the Cold War. Half of Europe was still behind the Iron Curtain, and the people living there were unable to travel and speak freely. On the night of 5–6 February 1989, a young waiter named Chris Gueffroy was shot and killed in an attempt to cross the Berlin Wall. We did not know it then, but he was to be the last person to be shot while trying to flee to the West.
Just a generation ago, but this was the start of a period of momentous events. Many of the countries that previously lay behind the Iron Curtain have developed from single party states into democracies, from planned economies into market economies. From cultural uniformity to a revival of some of the strongest elements of our diverse European cultural heritage. These countries are now our allies in NATO, members of the EU and hence our partners in the EEA.
The Government’s European policy is all about the values we believe in, the wealth creation that ensures our livelihoods, and the friends we depend on. The European cooperation is the greatest project for peace and democracy in history. The EEA Agreement, which has served the Norwegian business sector so well for 20 years, is part of this project. Norway has everything to gain from close cooperation with those who are our closest friends in the international community.
You can sometimes get the impression from the public debate in Norway that the EEA Agreement limits the rights and opportunities of Norwegian citizens and companies. This is completely wrong. Yes, the EEA Agreement sets the ground rules for important segments of our economy and society. And yes, there may at times be too much micromanagement. But the important thing is that we have a common set of rules in Europe, and that – through the EEA Agreement and our other agreements with the EU – Norwegian companies and citizens have access to the broader European community. In areas where the common European market needs regulation, it is better to have a single set of rules than 31 different sets of national rules. The fact is that common rules offer Norwegian citizens more rights and opportunities. That is why maintaining and further developing the EEA Agreement is one of Norway’s core interests. That is why the EEA Agreement is a mainstay of Norwegian European policy.
This year as we celebrate our Constitution, we should remember that in 1814 we were part of a broader European picture, as we still are in 2014. Our Constitution was inspired by European ideas: the rule of law, the balance of power and fundamental freedoms. These principles could not be taken for granted then. Nor can they be taken for granted today. But they are in many ways at the heart of what European cooperation is about: common rules for the protection of the individual, for protection against the abuse of power.
The events that have been taking place in Ukraine are a reminder that these principles cannot be taken for granted even in Europe in the 21st century. Developments in Ukraine have highlighted just how important it is to be part of a European cooperation based on peaceful coexistence, common values, principles of international law, economic integration and collective security.
Seeing tens of thousands of people protesting in the streets for hours on end in the biting cold to demand that the President signed an association agreement with the EU made a strong impression on us all. At the same time, the protests in Kiev showed that, although it is in the throes of its deepest economic and social crisis, the EU has not lost its attractiveness. This is due to the greater political freedom and economic prosperity that comes with European integration. When the Berlin Wall was torn down 25 years ago, Ukraine and Poland had approximately the same per capita gross national income (GNI); today Poland’s GNI is twice as high as Ukraine’s.
The crisis in Ukraine and Russia’s subsequent behaviour must be met with a unified European response. It is therefore more important than ever for Europe to have an effective common foreign policy. Europeans are justified in expecting the EU to guarantee democracy and the principles of international law within Europe and to promote these principles in neighbouring countries. Norway can be a useful partner in this work, which is particularly important given that the crisis in Ukraine and the Western countries’ response to Russia’s behaviour are being dealt with by EU bodies. For Norway, as a non-member, this creates certain challenges.
We are in the midst of a crisis, and it is crucial that we show solidarity with our allies in NATO and coordinate our response with our partners in the EU. Our ongoing dialogue with the EU on security and defence policy is therefore vital for keeping up to date with what is happening in EU processes in this area. This dialogue is also important for further developing the cooperation between Norway and the EU in the area of foreign and security policy. The development of defence capabilities in the EU is an important question in this context. Our close cooperation gives us a platform for defending fundamental European values. This is why Norway has aligned itself with the EU’s restrictive measures. In consultation with our partners in EFTA, we have also decided to postpone further negotiations on a free trade agreement between EFTA and the Russian-led customs union.
Since the change of government in Kiev, the political part of the association agreement with the EU has been signed. Work is now underway to prepare the ground for the signing of the rest of the association agreement including the provisions on free trade. The agreement will bring Ukraine a big step closer to the EU, while also committing the country to implementing important reforms.
Ukraine is the largest country in the EU’s Eastern Partnership, but the EU is also important for the other countries in the partnership. Negotiations on association and free trade agreements with Georgia and Moldova have already been completed, and the EU has brought forward the date for the signing of these agreements to June this year.
Norway is supporting the EU in the further development of the Eastern Partnership. We are financing projects in all the partner countries and are working to coordinate our efforts with those of the EU and other donors. We are also providing project support within the framework of the Partnership, and are taking part in the Information and Coordination Group established by the EU for friends of the Partnership. Norwegian efforts and initiatives to support the countries in the Eastern Partnership will become even more important in the years to come.
It is also important to support the European Neighbourhood Policy in promoting economic, political and social development to the south of our common Schengen border. It is in our interests that the countries of the Middle East and North Africa become more stable and offer greater economic opportunities to their inhabitants. This is an area where development policy, foreign policy, security policy and European policy are closely interconnected. The Minister of Foreign Affairs highlighted the importance of North Africa in his address to the Storting earlier this spring.
North Africa presents major security challenges for Europe. Weak and unevenly distributed economic development, high unemployment rates, and, in certain countries, weak governance and porous borders are creating problems in terms of organised crime, terrorism and not least migration flows to the rest of Europe. In our view, the challenges of migration and security in the Mediterranean region require a broad, long-term international engagement in countries of origin as well as countries of transit. It is therefore in in the interests of Norway and Europe as a whole to help to build up inclusive institutions and political processes in our neighbouring countries to the south, and thus help to stabilise the region. Norway’s efforts in North Africa are closely coordinated with those of the EU, and should be seen as part of the development of a coherent Norwegian Mediterranean policy.
We are now intensifying our efforts in Tunisia in line with this coherent approach. Tunisia has led the way in implementing reforms in the wake of the Arab Spring. The country is undergoing an inclusive democratisation process, and moderate Islamists and secular forces have reached agreement on a democratic constitution unlike any we have seen in the region. A successful democratisation process in Tunisia is crucial for stability in the country and important for the rest of the region. Further developing relations with Tunisia is a high priority for the EU and its member countries in the European Neighbourhood Policy. As a member of Schengen and the EEA, Norway shares the EU’s interest in working to achieve sustainable stability in North Africa. The focus of our efforts will be on areas such as democracy and human rights, job creation, the environment and energy. Our intensified efforts vis-à-vis Tunisia will of course be closely coordinated with the EU.
The instability that we are witnessing in the EU’s neighbouring regions both to the south and to the east reminds us once again that European policy is all about the values that we believe in and the value creation that ensures our livelihoods. There is a gap in the level of both welfare and freedom between the EU and its neighbouring countries. Norway will take part in the work to increase welfare and freedom in the EU’s neighbourhood.
If we are to influence the development of EU policy, we must cooperate and participate in the arenas that are open to us. We are able to have most impact when we become involved in political processes at an early stage and can thus help to develop solutions that are good for both Norway and Europe.
It is precisely the need for early involvement that is at the heart of the Government’s European strategy, which will be presented soon. The strategy will cover the period up to the next parliamentary election in 2017. It will outline the Government’s main European policy priorities and how we will work to achieve them. It also points out that early involvement will not be possible unless there is openness and debate at an early stage in the development of EU policy.
Let me give some examples of political issues that are being given priority by the Government and that we would like to see a debate on, both in the Storting and in society as a whole.
Norway has major interests in the area of energy and climate policy. Recent events in Ukraine have pushed energy security even higher up on the European agenda. Norway is a major supplier of both renewable and non-renewable energy to the European energy market.
Through the EEA Agreement, Norway participates fully in the internal energy market. Most of Norway’s gas is exported to the European market, and it plays a vital part in ensuring security of supply in Europe. In April the UN Intergovernmental Panel on Climate Change (IPCC) drew attention to the role of natural gas as a bridge to a renewable energy future. The EU’s long-term strategy choices will be highly significant for us.
In addition to the work to complete the internal energy market, two other important and partially related processes are underway in the EU this spring.
In March, the European Council requested the Commission to draw up a plan to reduce EU dependence on energy imports. The plan, which is to be presented next month, will examine diversification of energy sources and transport routes, energy efficiency and the development of infrastructure, in the EU as well as in third countries. Energy markets operate on commercial principles. However, as an important energy producer and major exporter to the EU, Norway will, in practice, be affected by measures taken by the EU. Besides, there are some proposals being discussed in Europe that may be inconsistent with the open, market-based approach taken in Norway and the other Nordic countries. It is therefore important that we follow these developments closely, consider their significance for us and put forward our points of view.
The other important process is the development of the 2030 policy framework for climate and energy. The final decision on this policy framework is due to be taken at the latest in October this year, so that the EU has an ambitious policy in place before the UN Climate Change Conference in Paris in 2015.
We submitted our views on the policy framework ahead of the European Council meetings in December and March. The Government welcomed the Commission’s proposals for reducing greenhouse gas emissions and emphasised the importance of further strengthening the EU Emissions Trading System.
The Government agrees with the Commission on the need to complete the internal energy market and to strengthen integration between the countries concerned. This will improve utilisation of resources and energy security.
With regard to the new targets set out in the 2030 policy framework, Norway has emphasised the importance of well-functioning energy markets. European energy policy must be designed to ensure that the necessary investments are actually made. We have also pointed out that Norwegian hydropower can play a useful role in the European power supply system, and that natural gas can be used to ramp up energy production to balance variable output from new energy sources and as a replacement for coal.
EU targets are not binding for Norway, but they determine the framework for our most important trading partners, and the subsequent EU legislation may be incorporated into the EEA Agreement. Therefore, the Government will continue to follow these processes and consider on an ongoing basis whether there is need for further input from Norway. We intend to provide any new input straight away, and not at some later stage.
Another issue that the Government wishes to raise for discussion is the export of social security benefits. The free movement of persons is a key principle of the European community we are – and want to continue to be – part of: where each and every one of us has the freedom to seek employment in a community of 31 countries and 500 million people. In two days’ time, we will be celebrating the 60th anniversary of the common Nordic labour market, which is a cornerstone of the Nordic cooperation. On 1 May, it was ten years since the EU gained ten new member countries. Since this eastward enlargement of the EU – and hence the EEA – Norway has been one of the countries in the EEA that has received most labour immigrants in relation to its population from the new member countries.
Labour immigration from the rest of Europe has benefited Norway, and continues to do so. The rural districts in particular have benefited from this new source of labour. However, high levels of labour immigration also give rise to certain challenges.
There are several indications that the export of social security benefits will increase in the years ahead. Our strong economy and Norwegian companies’ need for labour, combined with continued high unemployment rates in other parts of Europe, suggest that people from other EEA countries will continue to come to Norway to find jobs. At the same time, there is an increasing number of Norwegians who want to spend parts of their lives abroad.
The principles of the free movement of persons and of non-discrimination on the basis of nationality are crucial for ensuring that the internal market functions well to everyone’s benefit. Against this backdrop, we must consider whether we have struck the right balance in our welfare system, so that it both supports the right to freedom of movement for persons within the EEA and is sustainable in the long term. The Government is therefore examining issues relating to the export of welfare benefits in a European context.
It is important to underline that the Government does not intend to stop or reduce pensions that are paid to people resident outside Norway. Pensions are benefits that are normally earned over a long period of time on the basis of paid contributions. We are looking into the possibility of making changes in other areas, such as child benefit, cash-for-care benefits and unemployment benefits.
This debate is not just taking place in Norway. It is therefore important that we consider these questions now, at the same time as our partners in other European countries. Moreover, this is an area where Norway has useful experience and knowledge that we can contribute to the European debate.
Let me also mention a third area where early involvement is important – the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US. This partnership is currently under negotiation and could represent a quantum leap in transatlantic economic ties. It can have huge implications for us; 70 % of Norway’s imports are from the EU and the US, and they receive 86 % of our exports.
The various ministries have carried out a preliminary study of the potential consequences of this partnership for Norway. I would like to emphasise that there are strong grounds for optimism: TTIP will probably lead to significant economic growth in our two most important markets, and this will be beneficial for the Norwegian economy.
However, we cannot deny that we may face challenges. Under TTIP, exporters in the EU could have better conditions in the US than Norwegian exporters. At the same time, Norwegian exporters could lose advantages that they have enjoyed in the EU compared with US competitors. Norway’s seafood exports, in particular, could be badly affected. The competitiveness of Norwegian fish exports is likely to be considerably reduced, given that Norway does not have tariff-free access for its fish exports to either the EU or the US. Seafood is our second most important export industry, and the potential for growth is considerable. Therefore Norway considers it crucial to increase its market access for seafood. This is a matter that the Government takes very seriously. We will endeavour to improve our market access for fish, for example under the EEA Agreement, and we will consider every opportunity for gaining the best possible access to the US market.
Norway’s formal rights in the EEA would not be affected by a partnership between the EU and the US. Norwegian companies will still be subject to a common regulatory framework for the whole of the EEA. However, we must be aware that TTIP could affect the further development of this framework. The EU and the US have different views on the precautionary principle, and rules in areas of importance for health and the environment, for example on chemicals, also differ. At the same time, both parties emphasise that the partnership will not affect the current level of protection. Tackling barriers such as differences in technical regulations and approval procedures is an important part of the TTIP negotiations. These are also key areas in the EEA Agreement.
It is too soon to say how the Commission will involve its expert groups and committees, which Norway participates in under the EEA Agreement, in this process. But there is reason to believe that they will be drawn in as the TTIP negotiations progress. It will therefore be important for us to take full advantage of our opportunity to participate in these groups, and to make use of all the other channels available to us for obtaining information and putting forward our views.
At the meeting of the EEA Council on 13 May, we pointed out the significance of TTIP for the EEA/EFTA countries and the need for ongoing information about the process from our colleagues in the EU. Ultimately, this is also a question of Norwegian welfare, Norwegian jobs and Norwegian competitiveness.
Increasing Norway’s competitiveness is one of the Government’s main priorities. When it comes to production costs, Norway will never be the cheapest country, so we have to be smart. That is why the Government attaches so much importance to knowledge, research and innovation.
The EU Framework Programme for Research and Innovation, Horizon 2020, and the EU programme for education, training, youth and sport, Erasmus+, are designed to promote the achievement of the goals set out in the EU’s overall strategy for enhancing Europe’s competitiveness. Norway participates in these two programmes and makes a significant financial contribution: at today’s exchange rate, Norway’s contribution will amount to some NOK 23 billion during the period 2014–20. The Government therefore considers it important to ensure that we make the most of Norway’s participation in these programmes. We need to make sure that teachers, students, researchers and business leaders across the country are aware of the opportunities for project funding that are available from the EU, and help them to succeed in the competition for funding. This will help to both enhance the quality of Norwegian research and education and strengthen Norwegian competitiveness and value creation.
The EU market is by far the most important market for the Norwegian business sector. The Government is seeking to secure the best possible access to the EU market for Norwegian companies, by promoting harmonisation of rules and stable and predictable framework conditions. It is important for Norwegian companies that the process of incorporating new legislation into the EEA Agreement and of implementing new legislation in Norwegian law is speeded up. The number of legal acts that have been adopted by the EU but that have not yet been incorporated into the EEA Agreement is currently close to 600. We are working with our EFTA partners and the EU to reduce this number. It is worth noting here that we are increasingly finding ourselves waiting for the EU to complete its legislative process and that the ball is not in our court. The number of cases still waiting to be dealt with by Norway has been reduced significantly since the Government took office. Joint efforts are being made under the auspices of EFTA, as well as at national level in each of the EFTA countries, to reduce the backlog of outstanding cases in the somewhat longer term. We should start seeing the results of these efforts later this year.
Alongside these developments, we are continuing our important work on current EEA matters. I would like to mention a few of these:
The EU’s new Posting of Workers Enforcement Directive was adopted a week ago. The Enforcement Directive will play an important role in ensuring that the rules set out in the Posting of Workers Directive are properly applied, and will help to prevent social dumping. It is good that the EU countries have managed to reach agreement on a joint platform for better enforcing EU rules on the posting of workers. The text, as adopted, allows states to impose additional control measures at national level over and above those listed in the Directive. This is in line with what we have been seeking to achieve in this area, and will allow us to maintain and further develop our own rules for posted workers from EEA countries.
I would like in particular to say a few words about the important issue of the EU’s new guidelines for regional aid, which regulate Norway’s scheme for differentiated employers’ national insurance contributions. The development of the new rules clearly revealed just how important it is for Norway to follow such processes closely, to respond to developments and to put forward our views. The new regional aid rules were adopted last summer and will enter into force this July. They will restrict the extent to which Norway can reduce employers’ national insurance contributions in several sectors. Since the new Government took office, we have been in dialogue with the EFTA Surveillance Authority and in contact with the Commission on the sector limitations in the new rules. Our aim is to promote our views on how the rules can be interpreted, seek clarification as regards a number of specific effects, and to agree on other possible solutions. We are seeking the narrowest possible definition of the sector limitations in the rules, and a distinction between horizontal and more sector-specific instruments. The Minister of Finance and the Minister of Local Government and Modernisation wrote to the Commission about the sector limitations on 28 April. Last week I met representatives of the Commission and was told that the decisions made in summer 2013 still stand. At the same time, the Commission invited us to take part in a further expert-level dialogue on the interpretation of the rules and on what other forms of aid will be possible under the new rules. As the Minister of Finance has announced, the Government will submit a separate proposition on the matter.
The Government has noted that on 8 April this year the European Court of Justice declared the Data Retention Directive to be invalid on the grounds that it severely interferes with our right to respect for private life and to the protection of personal data.
It is now up to each individual country to consider which legal acts to introduce in this area, within the framework of the European Convention on Human Rights and the EEA Agreement. In a letter dated 11 April to the Presidium of the Storting, the Prime Minister made it clear that Norway will not incorporate legislation in this area into Norwegian law before the matter has been considered by the Storting again.
There are also a number of important matters relating to the energy sector, Mr President. The EU’s aim of establishing a fully functioning internal energy market by 2014 is to be achieved through the implementation of three legislative packages. We are currently considering the details of how to incorporate the third package into the EEA Agreement. Further discussions with the Commission are planned on the question of Norway’s participation in the Agency for the Cooperation of Energy Regulators (ACER) and on other adaptations to the legislation. Our aim is for Norway to have clarified the necessary adaptations by the summer so that we can return the matter to the EU with a view to reaching agreement on the incorporation of the third energy package into the EEA Agreement.
I would also like to mention the internal market for electronic communications, a growth industry in which Norway is a significant player. Last autumn the Commission presented a package of measures aimed at establishing a European internal market for electronic communications. We want to see harmonised rules for electronic communications and their uniform application throughout the EEA. The Body of European Regulators for Electronic Communications (BEREC), an independent, advisory EU body made up of representatives of the national regulatory authorities for electronic communications in the EU member states, has a key role to play in the development and implementation of the rules. We are therefore seeking full participation rights in BEREC for the EEA EFTA countries, equal to those of the EU member states, with the exception of the right to vote.
EU agencies and supervisory bodies are playing an increasingly important role in policy development and the implementation of legislation in the EU, and Norway participates in a number of them.
There is an increasing tendency for these agencies and supervisory bodies to be given direct decision-making authority, which raise questions in relation to both the two-pillar structure of the EEA Agreement and the Norwegian Constitution. Under the two-pillar structure, the basic principle is that it should be an EFTA body that exercises authority vis-à-vis an EEA EFTA state. As regards the Norwegian Constitution, the practice since the EEA Agreement entered into force has been to deal with new EEA legislation under Article 26, second paragraph, of the Constitution, which requires the consent of the Storting. This provision of the Constitution has been interpreted as meaning that powers may be transferred to an international body enabling it to make decisions that have a direct effect on legal entities in Norway, provided that the transfer of powers is considered not to encroach too far on constitutional powers. If the powers given to agencies or supervisory bodies are considered to encroach too far on constitutional powers, adaptations will be required before the legislation can be incorporated into the EEA Agreement. Such adaptations are not intended to give the EEA EFTA states special treatment, but to adapt the EFTA/EU cooperation to the fundamental principles of the EEA Agreement and Norway’s constitutional framework.
The EEA cooperation is unlikely to be able to function effectively if the EFTA countries are not able to formally participate in EU agencies and supervisory bodies. In the last instance, this could mean a loss of market access and unequal conditions of competition for Norwegian companies and other affected parties. Moreover, participation in various EU agencies and bodies gives us an opportunity to be involved in the development of EU policy, to participate in expert networks and also gives us access to information that is vital for the implementation of legislation at the national level. The Government therefore gives high priority to finding solutions that enable us to participate in new EU agencies within the framework of the EEA Agreement.
There are also agencies in the area of justice and home affairs in which it would be useful for Norway to participate. There are not many of them at present, and none of them has decision-making authority of the type I have just described. The Government therefore attaches importance to developing arrangements for Norwegian participation in relevant agencies in this area.
People move more and more freely across borders within the EU and EEA, and this unfortunately applies to criminals as well. There is an increasing number of foreign citizens serving sentences in Norwegian prisons. A bilateral agreement with the EU on association with the framework decision establishing a system for the transfer of sentenced persons would make it possible for Norway to transfer foreign prisoners to their home country more quickly than is currently the case under the Council of Europe convention. At present, we are giving high priority to concluding bilateral agreements with relevant countries, following the same principles as the framework decision.
Let me return now to the situation in Europe. I am pleased that we are now seeing signs of economic recovery, although there is still a significant degree of uncertainty. In the last quarter of 2013, the economy of the euro area grew by an annual rate of 1.1 %. This was the third quarter in a row that the economy of the euro area showed positive growth. Moreover, in contrast to the growth in previous quarters, growth in the fourth quarter was broad based. For the first time since the first quarter of 2011, economic activity increased in all the major countries in the euro area simultaneously. Even in countries such as Italy, Spain and Portugal, the economy is now showing signs of recovery. And last month, when Greece issued government bonds for the first time in four years, the market reaction was more positive than expected. A series of tough austerity measures have put public finances on a more sustainable footing. This year fiscal policy will continue to have the effect of reducing demand for goods and services, but to a much lesser extent than in previous years.
But unemployment remains high, and it will take time to achieve the level of growth necessary to significantly reduce unemployment. The social challenges look set to last much longer than the economic ones.
In several countries the financial crisis has highlighted the need for structural reforms. The reforms that have been implemented have been designed to strengthen competitiveness and stimulate growth, as well as to make it easier to service and reduce the high debt burden in both the private and public sectors. The EU has also strengthened political and economic cooperation. One example of this is the creation of a banking union, involving the establishment of the Single Supervisory Mechanism, the Single Resolution Mechanism and the gradual development of a Single Resolution Fund. Agreement has also been reached on common EU rules for dealing with failing banks.
Several of the reforms that have been implemented affect the internal market and as such go straight to the heart of our cooperation with the EU. Three new financial supervisory authorities have been established, for example, and this has implications for the Norwegian authorities and our financial institutions. We want to be involved, but we need to find a way of participating that is compatible with Article 26 of the Constitution and the EEA Agreement’s two-pillar structure. Finding a solution that meets our needs as well as those of the EU is no easy task. It is important however that we agree on a solution to this matter as soon as possible. Until we have done so, the legislation establishing the supervisory authorities cannot be incorporated into the EEA Agreement. Nor can legislation that transfers further powers to these authorities.
The revised Directive on Deposit Guarantee Schemes was adopted by the EU in the middle of April. Full harmonisation of the level of coverage for national deposit guarantee schemes at EUR 100 000, which was introduced in 2009, is continued in the latest revision of the Directive. A transition period up to the end of 2018 has been agreed for countries that provide higher coverage than EUR 100 000. In practice this arrangement only applies to Norway. The revised Directive also establishes a transition period of 10 years for building up funds to the target level and reducing repayment periods. This means that it will be ten years before a fully harmonised deposit guarantee system is in place in Europe. Because the revised Directive makes the European Banking Authority the competent authority, the necessary adaptations must be agreed on before it can be incorporated into the EEA Agreement. Once a solution has been found, we will consider how the Directive is to be incorporated into the EEA Agreement. The Government will keep the Storting informed of developments in this matter.
It is clear that restructuring in the wake of the financial crisis will take time. One of the reasons is that it also raises some fundamental questions about international solidarity, the sustainability of the welfare state, and how the social consequences of the crisis should be addressed. These are important questions that can only be answered through comprehensive political processes, both in the individual countries and at the European level. It is important that the effects of the restructuring measures do not undermine confidence between governments and citizens. This week’s elections to the European Parliament will give us an indication of where we stand in this respect. Many people have predicted increased support for the less mainstream parties that are critical of the EU. This should be a reminder of the importance of ensuring that key decisions have the support of the general public. We must not allow the economic crisis to be replaced by a crisis of confidence.
The financial crisis has also highlighted the need for a robust European market. The EEA and Norway Grants have a role to play here.
Negotiations on the new funding period for the EEA and Norway Grants scheme and on market access for seafood after 30 April 2014 began on 22 January. The EU is demanding a significant increase in Norway’s contribution to the scheme compared with the previous period. The EU has proposed that much of this increase should come in the form of a separate contribution aimed at reducing youth unemployment in a range of EU countries, including some that do not qualify for support under the EEA and Norway Grants or from the EU Cohesion Fund. Norway cannot accept this. We support the idea that, in the future, some of the funding under the scheme can be used to stimulate innovation and growth so that more young Europeans are able to find work, but only within the framework of the established criteria for the EEA and Norway Grants.
So far in the negotiations we have indicated our willingness to continue to provide funding at the current level. We have referred to the fact that in the EU budget for the period up to 2020, the EU’s contribution to reducing economic and social disparities in Europe is lower in real terms. We have also pointed out that several of the beneficiary states have seen positive economic development in recent years. The EEA and Norway Grants are intended to promote economic and social development and reduce disparities in Europe. Only countries that receive support from the EU Cohesion Fund are entitled to receive support under the Grants scheme.
Negotiations on the continuation of tariff quotas for fish and fishery products are taking place in parallel with the negotiations on our contributions to the scheme, and the two processes are being dealt with together.
An important task in the time ahead will be to find a way of bringing the process forward. It is the Government’s view that the EU needs to change its approach. We have conveyed this message, most recently in the meeting of the EEA Council on 13 May, and will continue to do so at meetings with representatives of the EU and EU member states, at both political and senior official level.
As I mentioned at the beginning of this address, the EEA Agreement is 20 years old this year. But it was originally conceived in 1989. That was the year when the then President of the European Commission Jacques Delors launched the idea of establishing a large European Economic Area with common rules. And it was also the year when courageous people took to the streets in the autumn darkness and tore down the Wall. It was about choosing the path for the future. It was about becoming part of the European family.
The EEA Agreement is our gateway into the European family. Conceived in the 1980s, born at the beginning of the 1990s, it was a child of its time. But I would like to stress, as I draw to a close, that the EEA Agreement has worked well for Norway for 20 years and it continues to do so. One of Norway’s objectives when negotiating the Agreement was to be able to continue on a course that we had followed through much of the 20th century – close integration into European affairs, an open economy, and acceptance for the principle of free trade as a basis for our welfare state. And we have succeeded in this. The advantages have been greater than many had hoped, and the disadvantages fewer than many had feared. The Government will build further on this.
The EEA Agreement has allowed Norway to fulfil its main objective, namely to ensure that Norway can participate in the internal market, and benefit from the free movement of goods, services, capital and persons. We see the results of this every day in our daily lives, in our work and in our business activities. The freedoms and rights we are guaranteed under the EEA Agreement are all about both the values we believe in and the wealth creation on which we all depend.