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European Economic Area
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EFTA member countries excluding Switzerland
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| Union type | Economic market | ||||||||||||||||||||||||||||||||||||||||||||||||
| Established | 1994 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Members | |||||||||||||||||||||||||||||||||||||||||||||||||
| Governance | |||||||||||||||||||||||||||||||||||||||||||||||||
| Basis | EEA Agreement | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutions | EEA Council EU Commission EFTA SA ECJ EFTA Court |
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| Affiliated with | European Union European Free Trade Area |
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| Statistics | |||||||||||||||||||||||||||||||||||||||||||||||||
| Population(2011) | 507,761,408 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Area | 4,944,753 km2 | ||||||||||||||||||||||||||||||||||||||||||||||||
| GDP (2010) | €12.6 trillion $16.7 trillion[1] |
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The European Economic Area (EEA) was established on 1 January 1994 following an agreement between the member states of the European Free Trade Association (EFTA) and the European Community, later the European Union (EU).[2] Specifically, it allows Iceland, Liechtenstein and Norway to participate in the EU's Internal Market without a conventional EU membership. In exchange, they are obliged to adopt all EU legislation related to the single market, except laws on agriculture and fisheries. One EFTA member, Switzerland, has not joined the EEA.
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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.[3]
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 (EES) in January 1989, which was later renamed to European Economic Area, as it is known today.[3]
By the time the EEA was established, however, several developments hampered its credibility. First of all, Switzerland rejected the EEA agreement in a referendum, 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 (Norway's EU accession was rejected in a referendum, Switzerland froze its EU application after the EEA agreement was rejected). 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 and Eastern Europe were to join.[3]
The EEA Agreement was signed in Porto on 2 May 1992 by the then seven states of the European Free Trade Association (EFTA), the European Community (EC) and its then 12 member states.[4][5] On 6 December 1992, Switzerland's voters rejected the ratification of the agreement in a constitutionally-mandated referendum,[6] 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 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.[7]
At present, the contracting parties to the EEA Agreement are the EU and its 27 members plus Iceland, Liechtenstein and Norway.
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 EFTA countries that are part of the EEA enjoy free trade with the European Union.
As a counterpart, these countries have to adopt part of the Law of the European Union. These states have little influence on decision-making processes in Brussels.
The EFTA countries that are part of the EEA 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 (€1167 million over five years).
EFTA countries do not receive any funding from EU policies and development funds
The non EU members of the EEA (Iceland, Liechtenstein and Norway) 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 "first pillar" of the European Union).
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.[8][9]
A Joint Committee consisting of the EEA-EFTA States plus the European Commission (representing the EU) 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, which parallel the work of the EU's European Commission and European Court of Justice. See EEA institutions for further information.
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 2004– 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 (EEA), which brings together the EU, Iceland, Liechtenstein and Norway in the Internal Market.
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