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Biannual address to the Storting on important EU and EEA matters

Minister of Foreign Affairs Ine Eriksen Søreide's address to the Storting on important EU and EEA matters 22 May.

Madam President,

Norway’s role in Europe is a subject that engages people and encourages debate.

Debate is a good thing. It is vital for democracy.

Our cooperation with the EU is often presented as something we have to do. The truth is that this cooperation is something we actively seek.

The EEA Agreement and the almost 70 other agreements we have with the EU bring significant benefits to Norway.

Our cooperation with the EU has been supported by all governments and by a majority in the Storting for nearly 30 years.

The reason for this is simple: it serves our national interests.

This address and the debate on Thursday provide a good opportunity to discuss precisely this.

***

The EEA Agreement is about people’s everyday lives. It is about conditions for the Norwegian business sector and for working life in Norway. And it is about our livelihoods here in Norway, now and in the future.

Its importance should not be underestimated.

The EEA Agreement gives Norwegian enterprises unique access to the European market.

We, a country of approximately five million people, have access to a ‘domestic market’ of around 500 million people.

This opens up unique opportunities for Norwegian businesses.

It gives Norwegian households access to a wider selection of goods and services at lower prices.

These are benefits that no other free trade agreement could provide.

The EEA Agreement guarantees rights and opportunities that many of us take for granted. To travel abroad to study, to do research or to work. To gain experience and inspiration.

And it enables us to meet our need for foreign labour. Foreign labour that is essential to our economy, particularly to the Norwegian agricultural sector, where foreign workers play a vital role in enabling Norwegian farmers to harvest their crops quickly.

The Government takes note when representatives of key companies all over Norway, not least in rural districts, tell us that the EEA Agreement is more important now than ever.

These companies depend on being able to sell their products without encountering barriers and varying requirements and standards.

OS ID in Østerdalen in Eastern Norway is a good example. CEO Wenche Wikan Ligård told the local newspaper Arbeidets Rett in May last year that without the EEA Agreement it would not be possible to survive as a manufacturer in Norway, especially in Os.

Her company produces livestock identification products, and the EU is its largest market.

The Norwegian company Flokk (previously HÅG), which has a production unit in Røros, is another good example. Flokk is Europe’s leading manufacturer of office furniture. On 8 May last year, Vice President Manufacturing and Site Manager Ottar Tollan and Regional Director NHO (Confederation of Norwegian Enterprise) Trøndelag Tord Lien told the same local newspaper that they feared that any changes to the EEA Agreement would have negative consequences for Flokk, the district’s largest private sector employer.

Arve Ulriksen, CEO of Mo Industrial Park in North Norway has expressed alarm at the fact that questions are now being raised about the EEA Agreement.

He feels that people are losing sight of the overall picture, and that opponents of the EEA are not considering what the consequences of not having the EEA Agreement would be for major sectors like fisheries, aquaculture and land-based export industries

Norwegian jobs, value creation and welfare depend on the EEA Agreement and European cooperation.

In March this year, 80 business leaders signed a joint declaration expressing their support for the EEA Agreement.

Their message was clear: at a time of major and difficult restructuring, it is vital to avoid creating uncertainty about the market prospects for the business sector.

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The Government welcomes debate about the EEA Agreement, but we will not do anything to jeopardise it. That is not in Norway’s interests.

And it is nothing but pure wishful thinking to believe that we could keep the EEA Agreement while negotiating alternative forms of relationship with the EU, and then make a decision at a later stage once we see where the negotiations lead.

Some people have argued that if we withdraw from the EEA Agreement, we could negotiate a tailor-made agreement enabling us to pick and choose the bits we like and reject the bits we don’t like.

The UK’s attempt to negotiate the best possible form of relationship with the EU as a non-member shows that it is not that simple.

The EU has made it quite clear that it is not possible to be half in and half out of the single market.

It is not possible to renounce one of the four freedoms and keep the rest.

It is not possible to leave the single market and continue to have a say in the development of legislation.

And it is not possible to maintain equally close trade relations without common rules and equal conditions of competition.

There are a number of different models for trade cooperation between the EU and non-EU countries.

In addition to the EEA Agreement, these include participation in the EU customs union, and trade agreements of varying scope. There is also the option of trading under WTO rules without any other form of agreement.

None of the alternatives removes trade barriers in the same way as membership of the single market.

That is why we intend to protect the EEA Agreement and the 70 or so other agreements we have with the EU.

***

Madam President,

As I mentioned in my foreign policy address, and as is highlighted in the Government’s new strategy for our cooperation with the EU, we are working systematically, in partnership with European countries and the EU, to build a secure, free, economically strong and responsible Europe.

A secure Europe

Our membership of Nato and the transatlantic cooperation are the cornerstones of our security and defence policy.

At the same time, it is important that we follow developments in this area in the EU closely. EU member states are now showing a greater willingness to strengthen the EU’s capacity to counter and respond to both internal and external security threats.

The Government’s strategy for cooperation with the EU in the period 2018-2021 has identified three key tasks for our security and defence cooperation with the EU in the years ahead.

We will further develop political dialogue and coordination with the EU, strengthen Norway’s practical cooperation with the EU, and promote favourable conditions for the Norwegian defence industry.

Through close dialogue with the EU on security policy issues, we are seeking to ensure a common understanding of the security situation at any given time, to promote political unity in Europe and to enhance coordination of efforts.

It is in the interests of both Norway and the EU that Norway is involved in the EU policy development process as early on as possible in order for us to be able to contribute appropriately and constructively in areas of common interest.

The EU Global Strategy calls for more targeted cooperation between the EU and partner countries like Norway. The Government welcomes this and will put forward proposals for strengthening our practical cooperation.

We will promote favourable conditions for the Norwegian defence industry in the European market. Norway’s agreement with European Defence Agency provides a good basis for doing so, but we must also make sure that we are able to participate in new initiatives.

A European Defence Fund has been established to support collaborative research in the area of defence and to promote the joint development and acquisition of defence capabilities. Through the EEA Agreement, Norway is participating in the Preparatory Action on Defence Research (PADR) under the research strand of the European Defence Fund, and is the only non-EU member state to do so.

We are positioning ourselves to ensure that we can also take part in projects under the Fund’s other strand, which is aimed at promoting multilateral cooperation on the joint development and acquisition of defence equipment and technology.

Since last summer, the Government has been working actively vis-à-vis EU institutions and bodies and a number of EU member states to ensure Norway’s participation. This work is continuing.

The Government will also consider whether Norway should seek to participate in projects of particular interest under the Permanent Structured Cooperation (Pesco) on security and defence.

In our work to ensure the security of Europe, we must also promote closer cooperation between Nato and the EU. The two organisations have different tools at their disposal. And both these organisations are vital if we are to meet the complex security challenges Europe is facing.

We consider it important to ensure a clear division of responsibilities between Nato and the EU and to avoid unnecessary overlap.

It is vital that EU initiatives are developed in an open and inclusive way, and that they do not weaken our transatlantic ties.

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Madam President,

We must work to eliminate dividing lines and continue to promote good relations throughout Europe. Stability in the Western Balkans is fragile and the reform process could still be undermined.

Weak economic development, unemployment and corruption are contributing to ethnic and political tensions. Illiberal forces that are intent on sowing divisions, slowing down reforms and halting Euro-Atlantic integration are gaining ground.

It is positive that the EU and several of its member states have indicated that they intend to increase support for, and strengthen cooperation with, the Western Balkan countries, precisely to counter stagnation and setbacks. This is also highlighted in the European Commission’s new enlargement strategy for the Western Balkans, which was adopted in February.

Norway is participating in the common European effort to promote reform in the Western Balkans. The Government significantly increased its funding to the Western Balkans in 2018, from NOK 175 million to NOK 319 million.

The aim is to promote stability and the rule of law through regional cooperation, reconciliation, increased prosperity and good governance.

Providing support to these countries is an important investment. A democratic and stable Western Balkan region, with states governed by the rule of law, economic progress and adequate welfare provision, is important for the whole of Europe.

***

For a long time, the EU accession process was also an important driver of reform in Turkey. Today, the process is at a standstill, and Turkey’s relations with several of the EU’s member states are difficult.

The situation in Turkey gives cause for concern not only because of developments in the areas of human rights and freedom of expression, but also because of the conflict in neighbouring Syria and the flows of refugees and migrants.

The principles of the rule of law and legal safeguards are being steadily undermined.

The state of emergency has recently been extended, and the snap presidential and parliamentary elections to be held at the end of June will now take place under the state of emergency.

Developments in Turkey are being closely monitored by the EU, the Council of Europe, the UN and others. The EU plays a key role in the international dialogue with Turkey. Maintaining strong ties to the EU is an important priority for Turkey.

Membership of Nato and close links to other organisations such as the EU strengthen Turkey, not least economically and in terms of security.

The Government wants Turkey to be part of the European community of values, and cooperates actively with other countries to this end. For example, when we wish to raise issues concerning developments in Turkey, we coordinate our efforts with the EU in the OSCE.

A free Europe

Madam President,

Respect for basic democratic rights is essential in a free Europe.

The Government’s foreign policy is based on liberal values and is designed to promote strong civil societies, the rule of law and sustainable democracies.

We are concerned about the dwindling respect for fundamental rights, the rule of law and democracy that we have seen recently in some of the beneficiary countries of the EEA and Norway Grants.

Any viable state based on the rule of law needs a strong civil society that can act as a corrective to the national and local authorities. In our negotiations with the beneficiary countries on the use of the EEA and Norway Grants, we highlight the importance of ensuring that the grant funds are managed independently of the country’s authorities.

We have now signed MoUs with 12 of the 15 beneficiary countries.

An economically strong Europe

Economic growth in the euro area and the EU was high in 2017, and is testimony to Europe’s increasing economic strength.

There has been broad-based growth across sectors and countries, and unemployment has gradually declined over the past five years.

The youth unemployment rate is still high, but here too the trend is positive. According to the IMF, economic growth is set to continue in 2018, but is likely to slow somewhat in 2019.

The global financial crisis in 2008 and 2009 highlighted the need for a stronger and more stable financial system in Europe. It triggered action by the EU and at national level. This included the proposal to establish a banking union, the main aim of which is to ensure that public funds do not have to be drawn on to rescue failing banks.

Key elements of the banking union are now in place, but discussions on the remaining elements, for example the establishment of a European Deposit Insurance Scheme (EDIS), are continuing.

The further development of the European Stability Mechanism, the crisis resolution mechanism for countries in the euro area that was established during the European debt crisis in 2012, is also being discussed.

Several of the proposals are expected to be on the agenda of the meeting of the European Council in June, but there is still a considerable lack of agreement between the member states, particularly when it comes to striking a balance between risk reduction and risk sharing.

For Norway it is important that growth in the EU continues, that the EU’s financial system is as robust as possible, and that the Norwegian financial sector has good access to the EU market and is well placed to continue to provide financial services to Norwegian companies.

Madam President,

We are witnessing a very worrying escalation of trade tensions between the world’s two largest economies. If dialogue and negotiations between the US and China are replaced by trade barriers, the consequences will be serious. It is positive that the talks between the two countries so far appear to have prevented a further escalation, but tensions remain high and it is unclear how this situation will develop.

The US is now introducing additional duties on imports of steel and aluminium. Although only around 0.2 % of Norwegian steel and aluminium exports go to the US market, we have made our position clear, namely that Norwegian exports must be exempted from these tariffs in the same way as EU exports. At the same time, we will continue to argue for these measures to be reversed in their entirety.

New US trade barriers on steel and aluminium originally intended for export to the US market may result in additional imports to Europe. This could prompt the EU to introduce its own protective measures. If it does and if these measures apply to Norway, the Norwegian business sector could soon be in a difficult position, given that exports to the single market are so much more important than those to markets outside Europe.

We are in close contact with the European Commission and with EU member states to try to prevent Norway, as an EEA country, being affected if the EU decides to introduce its own protective measures.

Norway and the EU share a common commitment to maintaining a rules-based economic world order.

We must work to ensure that the trade tensions between the US and China do not endanger the multilateral system and increase macroeconomic risk.

No one will benefit, particularly not countries like Norway, if this situation escalates and international trade becomes less open and predictable.

A responsible Europe

Madam President,

A responsible Europe means a Europe where countries cooperate to address challenges that individual countries are unable to tackle alone.

Both Norway and the EU have undertaken to reduce greenhouse gas emissions by at least 40 % by 2030. Developing and phasing in new technology and carbon pricing will be our main instruments for achieving this goal.

The Government will make use of the flexibility offered by the EU emissions trading system (EU ETS) and the opportunity to enter into bilateral agreements with EU countries under the EU climate policy, with a view to meeting our commitments for non-ETS emissions. At the same time, our ambition is to meet as much as possible of our commitments through domestic emission reductions.

In this connection, Norway has proposed incorporating the envisaged agreement on joint fulfilment of the climate commitment for 2030 into the EEA Agreement.

We hope to reach agreement with the EU on this matter as soon as possible. We have set the ambitious goal of concluding an agreement before the next climate summit (COP24), which is being held in Poland in December this year.

With a view to shouldering our share of the burden in a responsible Europe, the Government will contribute to a common European and comprehensive approach to migration that makes use of a wide range of instruments.

Norway has voluntarily contributed to efforts to resettle asylum seekers from Greece and Italy. The Government will make strategic use of its efforts in this area to contribute both to burden-sharing and to resolving protracted refugee situations.

In our efforts to deal with large flows of migrants and asylum seekers, the Government attaches importance to ensuring that applications are processed properly and efficiently, and that those who are not eligible for residence or entitled to protection are returned.

In Greece we are engaged in constructive cooperation financed by the EEA Grants to address challenges relating to asylum and migration.

This work started in the previous funding period of the grants scheme, and we have now increased the funding framework to EUR 33 million for the current period, which will continue until 2024.

We are making use of a range of instruments in our work in this area, and we are seeking to cooperate more closely with migrants’ countries of origin and transit. The Schengen cooperation is an important arena for exchanging experience in this field.

Norway will continue to support the EU’s work to develop and implement a sound integration policy. Carefully targeted integration efforts help to prevent marginalisation. Successful integration will also boost economic growth in Europe.

***

Madam President,

Brexit is high up on the agenda, and will continue to be in the time ahead.

The Government’s approach to Brexit remains unchanged. We will strive to maintain as close cooperation as possible with the UK after Brexit.

This goes for our economic cooperation as well as for our cooperation in other areas, such as justice and home affairs and security.

At the same time, we will maintain our agreements with the EU. They will not be affected by Brexit.

The UK and the EU have agreed on the terms for the Brexit transition period, which were given the go-ahead by the European Council on 23 March.

The parties still need to agree on the final withdrawal terms before the transitional arrangements can come into force.

The key issues of the border between Ireland and Northern Ireland and the settlement of disputes have not been resolved, and both these issues could still derail the negotiations.

However, the risk of a breakdown in the negotiations and of the UK having to leave the EU/EEA without an agreement is now considered to be lower than previously.

If the transitional arrangements are put into place as we hope, they will apply from 29 March 2019, the date on which the UK leaves the EU, until the end of 2020.

During this period, the UK will continue as if it were still a member of the EU.

British people will no longer be represented in EU institutions and decision-making processes, but the UK will still be bound by EU agreements with third countries, including the EEA Agreement, and the entire body of EU law will still apply to the UK.

This is a solution that we welcome. We hope that it will ensure equal treatment for Norwegian citizens and predictability and equal conditions for Norwegian businesses, and that it will give us time to put in place a new set of agreements on our future relations with the UK.

With regard to Norwegian citizens who have acquired rights in the UK, Prime Minister Theresa May has confirmed that the UK will offer the same rights to Norwegian citizens as to citizens from EU countries.

There is also greater clarity regarding the UK’s position on the future relationship between the EU and the UK: Prime Minister May confirmed in March that the UK will leave the single market and the customs union, but that it wishes to remain closely tied to the EU in certain areas. This includes still being able to participate in several EU agencies, such as the European Medicines Agency, the European Chemicals Agency and the European Aviation Safety Agency.

The guidelines on the framework for the future EU-UK relationship adopted by the European Council indicate that the EU is willing to work towards a free trade agreement with the UK. This could be along the lines of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. Such an agreement could be supplemented with cooperation agreements in selected areas such as aviation and research, justice and home affairs and foreign and security policy.

At the same time, the EU has made it clear that, when the UK leaves the single market and the customs union and no longer accepts the free movement of people, the EU will not be able to give the UK the level of market access that Norway has through the EEA Agreement. This would not be compatible with an agreement based on the CETA model and the limited obligations that this would entail.

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Our own preparations for Brexit are continuing unabated.

The Government has frequent talks with both the EU and the UK, and we are following the various processes as closely as possible with a view to safeguarding Norwegian interests. We are aiming to find good solutions that replicate the arrangements that the EU and the UK settle on.

Norway needs clarification of how the European Commission views the question of whether the UK needs authorisation in order to start negotiations with us. I will follow this up with Michel Barnier, the EU’s chief negotiator, at the meeting of the EEA Council tomorrow.

The Government is continuing its work on the mandate and the practical arrangements for the forthcoming negotiations. The work of the interministerial Brexit Task Force is also continuing. The Task Force is following the current negotiations and developments closely, identifying Norwegian interests that will be affected by Brexit, and coordinating our dialogue with the EU and the UK. I will continue to keep the Storting up-to-date through the Storting’s European Consultative Committee.

In connection with this, another important task is maintaining our dialogue with actors in Norway that will be particularly affected, for example through the two reference groups that have been established for the fisheries sector and for key stakeholders in the Norwegian business sector respectively. This in turn will help us in the process of developing future cooperation structures.

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Madam President,

I will now turn to some current EEA matters of particular relevance for Norway.

In 2016, the EU adopted the new General Data Protection Regulation (GDPR), which is a significant revision of the rules in this field. Technology is developing rapidly, and we must ensure that we have adequate rules for data protection that take account of new challenges in this field. The GDPR sets new requirements for businesses and organisations on the collection and processing of personal data, and gives citizens new rights regarding control of their own data. The result is stronger and more effective protection of personal data.

The GDPR will enter into force in EU countries on 25 May. It is important for the Government that the new Personal Data Act, which implements the GDPR in Norwegian law, enters into force as soon as possible after that date. The Storting held its initial debate on this legislation today.

Entry into force of the new legislation will, however, depend on the incorporation of the GDPR into the EEA Agreement following a decision by the EEA Joint Committee. Any constitutional requirements of the EEA/Efta states will also have to be met. The information we have received from the EU, Liechtenstein and Iceland indicates that this legislation cannot be expected to enter into force until July at the earliest.

When it comes to the financial sector, we are working closely with our partners in the EEA to reduce the backlog of legal acts to be incorporated into the EEA Agreement as quickly as possible.

The Markets in Financial Instruments Directive II (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR) are important in this connection. We are working towards the incorporation of MiFID II/MiFIR into the EEA Agreement. We have incorporated the new regime into Norwegian law, and have received approval from the EU that this is sufficient to allow for our full participation in the single market in this area for a transitional period.

There are several other initiatives in the pipeline. The European Commission is continuing to develop its plans for a capitals market union and measures to increase stability in the European market. The Commission has also presented proposals for revising the governance structure of the European Supervisory Authorities.

The Norwegian authorities are working to ensure that the current balanced arrangement for the EEA/Efta states’ participation in the European system of financial supervision can continue during the revision process.

Most of our energy exports go to the EU, and Norway currently meets about a quarter of the EU’s demand for gas.

In the area of energy, our starting point is in many ways different to that of our neighbours. Nevertheless, it is a great advantage for us to take part in the European energy cooperation.

The Storting has approved the incorporation of the EU’s third energy package into the EEA Agreement and Norway’s participation in the EU Agency for the Cooperation of Energy Regulators (ACER). This means that we can take part in and influence this energy cooperation. The opportunity to exert an influence in this area is important for Norway.

As you are aware, Norway will retain full sovereignty over its energy resources.

The EU’s energy policy is closely related to its climate policy. Energy supply is the largest source of greenhouse gas emissions in the EU. The main objective of the EU’s energy policy is to ensure that the sector can provide competitive, sustainable and secure energy.

This is reflected in the legislative proposals that were presented in autumn 2016 in the Clean Energy for all Europeans package, sometimes referred to as the ‘winter package’.

European countries are putting a lot of effort and resources into reforming their energy sectors. The goal is to increase the share of renewable energy in the EU countries’ energy mix to 20 % in 2020, and to increase this further in period up to 2030. This will require considerable expansion of renewable power generation in Europe.

In Norway, 98 % of electricity production is already from renewable sources. This means that, although we cooperate closely with Europe in the energy field, we need to take the unique situation of the Norwegian energy sector into account.

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Madam President,

The Prime Minister has proposed to the EU that closer cooperation should be established within the EEA on combating work-related crime.

The Government’s goal is to promote a labour market characterised by security and flexibility for employees, responsible employment practices, and well-functioning and effective tripartite cooperation.

The Government supports the principles set out in the European Pillar of Social Rights: equal opportunities and equal access to the labour market, fair working conditions, and social protection and inclusion.

Transnational work-related crime, in the form of undeclared work and other criminal offences, prevent the labour market from functioning properly. There is a need both for joint efforts at European level and for specific measures involving individual countries. The EEA and Norway Grants scheme provides opportunities for establishing operational cooperation between the Norwegian Labour Inspection Authority and labour inspectorates in various countries in the EEA.

The EEA and Norway Grants act as a door opener and are an important instrument of our European policy. Bilateral cooperation to combat work-related crime under the grants scheme is being developed in Lithuania, Estonia, Poland, Bulgaria and Romania.

The Norwegian authorities are currently participating in a number of European arenas for cooperation on labour mobility, which the European Commission has now proposed bringing together under a new European Labour Authority (ELA).

One of the objectives of the ELA will be to strengthen European cooperation on fighting work-related crime.

Norway has expressed its view that the ELA should respect national competences.

It is important to ensure that Norway can continue to take part in the committees and bodies once they are brought under the ELA.

The proposal to establish the ELA is now being discussed by the relevant EU bodies, and the Government is following the process closely.

The Government is working to promote acceptance in the EU of the need to adjust social security benefits in the various countries to take account of purchasing power differences. The Storting gave its approval to these continued efforts in connection with the debate on the white paper on the export of Norwegian social security benefits.

The European Commission’s proposed revision of the EU legislation on social security coordination, which was presented in 2016, does not include changes that would allow for the indexing of benefits to the conditions in the country in question or changes to the rules governing export of family benefits.

The Government is now working with like-minded EU countries to lobby relevant EU bodies and push for changes in this field.

The ministers concerned are raising the issue of indexing benefits in their meetings with relevant parties.

We have also been in contact with the Efta Surveillance Authority to clarify what options are available, in line with the white paper on this policy area.

Madam President

The Government wants to make the Nordic region more visible.

Our aim is to further enhance Nordic cooperation in the European policy arena in Brussels, and to submit joint Nordic input more often in policy areas where we have common interests.

This could include areas such as digitisation, green technology, climate change and the environment, energy and the labour market.

The white paper on Nordic cooperation will be discussed in the Storting next week. It sets out many examples of joint Nordic initiatives that are of significance in a European policy context.

The close bilateral relations we have with our partners in Europe are important when we are seeking to gain acceptance for our interests and visions.

The Government takes a targeted approach to cooperation with Norway’s European allies and partners. We identify common interests on a case-by-case basis to ascertain which member states we should seek to cooperate with to promote Norway’s interests most effectively.

In some areas, and with certain member states, we are in the process of building more systematic, long-term relations, for example with the other Nordic countries, France, Germany and the Netherlands.

Similarly, the German Government has expressed an interest in closer cooperation with Norway in its new policy platform.

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Madam President,

The destiny of Europe and the EU is also Norway’s destiny.

On 9 May, we presented a new strategy for our cooperation with the EU. In it we emphasise that it is in Norway’s interests to maintain a secure, free, economically strong and responsible Europe.

Our security, freedom and economy depend on our closest allies, on our trade partners and on those who share our values. This means that we must also contribute where we can.

For the last 60 years, our form of relationship with the EU has provided us with a stable and predictable framework.

Our new strategy marks a change in pace. It is a vigorous defence of the EEA Agreement and our other agreements with the EU.

The fact is that Norwegian foreign policy begins in Europe.

Europe is our continent. What do we want our part of the world to look like? What role are we ourselves to play? What responsibility do we have for developments in Europe?

The Government’s strategy for cooperation with the EU and the associated work programme answer precisely these questions.

I look forward to further discussion of these matters in the debate on Thursday.

Thank you.

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