Why Norwegians now want a referendum on quitting the European Economic Area

Why Norwegians now want a referendum on quitting the European Economic Area

When Norway signed the European Economic Area Agreement, we were told by both the EU and our then Labour government that Norwegian sovereignty would be respected. Instead, the agreement – which makes Norway, Iceland and Liechtenstein part of the EU single market – has resulted in EU governance in several areas.

It was 25 years ago last week – 2nd May 1992 – that the controversial EEA agreement was signed, before parliamentary approval in the autumn of that year. The agreement was never put to a referendum and 25 years on, Norway is in the middle of an EEA debate that is more intense and more fundamental than ever.

The heated debate is partly due to Brexit, which is of course a game changer in European politics, offering new opportunities on how to handle trade and international co-operation. For Norway this is the time to reconsider our relations with the EU, as well as developing future bilateral trade relations with the UK, Norway’s main market for exports.

Most importantly, there is a growing national concern about our subordinate relationship with the EU. The EEA is controversial because the never-ending tide of new EU legal acts threatens Norwegian working standards, while costs for businesses in rural areas have increased because of EU rules and sovereignty is being transferred to the EFTA surveillance authority (ESA) and EU agencies such as the financial regulators. At the same time, the EU Treaty and other EU / EEA rules are interpreted more strictly and affect Norwegian interests even more and with a broader scope.

The cost of the EEA for Norway has increased ten-fold since 1992. Without any formal obligation in the agreement itself, the Norwegian government has time and again accepted to finance support programmes for EU countries (EEA Grants and Norway Grants). Including the EU programmes (research etc.) and the cost of EFTA/EEA institutions, Norway pays around £650 million (gross) each year to the EU and EU states.

Nei til EU (No to the EU) last week published a report that reviews the impact of the EEA agreement. Nearly 12,000 EU directives and regulations have been implemented through the EEA agreement, which have changed Norwegian society in a number of areas, including sectors that were supposed be outside the agreement, such as fisheries and agriculture.

The EEA agreement has turned out to be exactly the “pay, obey and no say” deal which Nei til EU warned about when Norway signed up 25 years ago.

In the Brexit debate, some have advocated the EEA as an alternative for the UK, including the EU Commission. But one lesson to be learned from Norway, after a quarter of a century’s experience, is that in the EEA, a country isn’t able to take control. And what may be intended as a temporary arrangement could turn out to last for decades. The EEA agreement was actually built to prepare Norway for EU membership – which the people then rejected in a 1994 referendum.

We at Nei til EU want to replace the EEA agreement with a modern trade agreement, and we are demanding a referendum on leaving the EEA. We are certain it would better to trade on even terms with the EU than being integrated into the single market and its four “freedoms”, the free flow of goods, services, capital and labour.

Two recent opinion polls, commissioned by Nei til EU and conducted by Sentio, confirm public support for these vital demands. Firstly: there is a strong majority wanting to have a say on the EEA agreement: 47% are in favour of a referendum on Norway leaving the EEA, with only 20% rejecting such a referendum.

Norwegians are also more critical of the EEA itself. Polls over the last few years have shown a majority supporting Norway remaining in the EEA, but this is now changing. There is still a large number who are uncertain – 46% – but among those who take sides, only 23% support the EEA and 31% want a trade agreement instead. Eliminating the doubters, this is a majority against the EEA of close to 60-40.

There is a vast majority against EU membership, which has remained steady at around 70% for several years. Our Labour Party, which is Norway’s largest political party, recently amended its manifesto and deleted the goal of bringing Norway into the EU. Now our Conservative Prime Minister, Erna Solberg, is last woman standing promoting EU membership in her party’s manifesto. Their junior coalition partner in government, the Progress Party, is against EU membership and wants to renegotiate the EEA agreement (but does not want a referendum on the EEA).

The EEA Agreement should respect Norwegian sovereignty, and Norway should be able to reject the rules we would not have. 25 years later, it is evident that Norway on several occasions has given away national authority. The formal right of Norway and our EFTA partners to reject new EU legislation is written into the EEA agreement, but has since been put to sleep. For a while Norway rejected the EU’s Third Postal Directive, but the current Conservative government withdrew the reservation. It has never been used to ensure Norway’s lasting exceptions.

In the Norwegian EEA debate, there is much talk about using the “space of national freedom”, that is, finding arrangements to circumvent or mitigate the negative effects of the EU acquis we implement. This says something about how contradictory to common sense – and inefficient – the EEA agreement has proven to be.

A key finding in the new report “25 Years of EEA” is how the EEA Agreement in particular is causing harm to Norwegian working life. The EEA report documents how Norwegian laws, collective agreements and ILO conventions (of the International Labor Organization) are subordinate to EU/EEA rules.

In a controversial verdict at the end of last year, the Supreme Court followed the advice of the EFTA Court and put EU rules on the right of free establishment before national workers’ rights and even international ILO Convention number 137 on the preferences of port workers. Several labour unions are now demanding that Norway leave the EEA.

Norway is, of course, a major producer of energy. The European Commission wants to link Norway as closely as possible to the EU Energy Union, aiming for a fifth freedom: free flow of energy. Most of the EU energy legislation is considered relevant to the EEA, making the agreement a tool of the EU for integrating Norway into the Energy Union.

Hardly anything matters more to the backbone of Norwegian industry than long-term access to electric power at competitive prices. More and more cables for exporting electricity to the continent and the UK may result in Norway importing higher electricity prices the other way. When the cables are built, it is only in the case of a national energy crisis that Norway could prevent exports and take national control of the distribution. Everything else is governed by EU/EEA competition rules.

EEA supporters are still embracing the same “Project Fear” message as in 1992: that we must have the EEA agreement to sell goods to the EU. This argument was highly misleading in 1992 – and it just as misleading today. Norwegian industry had duty free access on all exports to the EU before the EEA – and this free trade agreement would still apply if the EEA agreement were terminated. In fact, a larger proportion of Norwegian mainland exports went to EU countries (the then EU12) before the EEA agreement than is the case today. If anything, this clearly shows that the EEA agreement is not necessary for trade.

More than 150 countries outside the single market sell goods to the EU. None of them have to change their legislation or transfer sovereignty to sell their goods to the EU. This only applies to Norway, Iceland and Liechtenstein and it is this submission to EU law which makes the EEA agreement so intolerable. 25 years with the EEA has been more than enough.

Photocredit: Statsministerens kontor