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Biannual address to the Storting on important EU and EEA matters

Minister of Foreign Affairs Anniken Huitfeldt gave this address on important EU and EEA matters to the Storting 17 November.

Minister of Foreign Affairs Ms Anniken Huitfeldt in the Storting. Credit: From stortinget.no
Minister of Foreign Affairs Ms Anniken Huitfeldt giving her biannual address. Credit: from stortinget.no

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Mr President

On this date in 1939, the German occupying powers launched a major crackdown on the student community in Prague. Nine student leaders were executed by the SS. More than 1 200 students were sent to concentration camps, and all higher education institutions were closed. 

The day before, large numbers of students had joined the funeral procession of medical student Jan Opletal – who had been shot while protesting against the occupation.

The Nazi brutality on that autumn day in 1939 triggered major demonstrations in solidarity with the Czech students in several countries, including Norway. This is why 17 November is now celebrated as International Students’ Day in many countries.

Today, Norwegian students and young people are standing in solidarity with fellow students in Ukraine and the rest of the Ukrainian people.

And they are standing in solidarity with those courageous Russian students who are openly distancing themselves from the war – despite the risk of being immediately called up and sent to the front.

Young people today have not lived through the Chernobyl disaster or the Balkan wars.

But they do know about Crimea, Kharkiv and Kherson.

And they have been witnessing the continual flow of refugees from Ukraine. Many of them have been involved in the effort to welcome Ukrainian refugees to their local communities.

They have seen how essential Norwegian gas has become for more and more Europeans – both for their daily lives and to keep the wheels of society turning.  

And they are feeling – because of various incidents and threats in Norway’s neighbourhood – that the war is coming closer to home.

We have no idea how the war will evolve in the time ahead. But it could be a defining event for an entire generation. The war is dominating the present, and the ramifications are being felt in a great many areas.

As in my previous address, I will therefore be focusing primarily on the major challenges arising from the war: for Europe, European cooperation and for Norway.

Importance of European unity and resolve

Mr President

Russia’s invasion has triggered the worst security crisis since the Second World War.

The war has also led to an energy crisis with major economic and social consequences for the whole of Europe. 

Europe and our Allies in NATO are being put to the test. But our unity and common resolve have proved to be stronger than Putin had anticipated.

At the same time, the whole continent is affected by the gravity of the situation and the uncertainty caused by the war. We know that the coming winter will test us even further. Russia is preparing for a protracted conflict. The situation may deteriorate.  

We share a clear interest in ensuring that Putin’s strategy of sowing division and uncertainty is a failure.

Together with its Allies, its Nordic neighbours and the EU countries, Norway will continue to play its part in maintaining Allied and European unity and solidarity.

In certain areas, Norway’s contribution is exceptionally significant.

Over the past year, Norway has become the largest supplier of gas to the EU countries. As a result, Norway’s strategic importance in Europe has also been growing.

Continuing to be a stable and reliable supplier of energy is a key priority for Norway. 

Developments in the EU and their significance for Norway

Mr President

Crises can divide us, but they can often result in greater solidarity and closer cooperation. For example, in the EU, the pandemic has led to stronger cooperation in the area of health.

Since Russia’s invasion of Ukraine, the EU’s response to the security crisis has been swift and wide-ranging.

For the first time ever, the EU is now providing military support to a third country that is at war. There were not many people who anticipated this a year ago.    

Norway’s European policy is firmly based on the EEA Agreement and our other agreements with the EU.

As European cooperation enters new phases, Norway’s European policy will also have to be developed and adapted.

Security policy cooperation in Europe in response to the war

Mr President

While facing military setbacks on the ground, Russia has chosen the path of escalation.

Ukrainian forces have reclaimed large areas of territory. It was moving to see President Zelensky back in the liberated city of Kherson. Its liberation is an important victory for Ukraine and an equally important defeat for Russia.

Russia has responded with massive missile strikes on civilian infrastructure in an attempt to weaken Ukraine’s resistance. The serious incident two days ago when a missile hit Polish territory highlights the dangers of Russia’s unacceptable aggression.

Large parts of Ukraine’s energy infrastructure are reported to be out of operation. Millions of Ukrainians have no electricity or reliable access to hot water.

Russia has repeatedly threatened to use nuclear weapons.

We must be prepared to face further attempts to create fear and uncertainty, here in Norway too.

But we will not be intimidated. We will continue to support Ukraine in its legitimate fight to defend itself. 

NATO’s response

Mr President                                                                    

Russia’s assault on Ukraine has been met with a forceful transatlantic response. This critical situation makes it clear just how important membership of NATO is for Norway’s security.

In a short space of time, NATO has significantly strengthened its presence in the eastern part of the Alliance, and eight multinational battlegroups have now been established along NATO’s eastern flank. Norwegian soldiers are operating in Lithuania along with soldiers from other Allied countries.

The US has strengthened its security presence in Europe. US contributions, which total over USD 50 billion, illustrate the massive scale of the US response, but should make Europeans think about their own contributions.

European NATO members must demonstrate their ability and willingness to take greater responsibility for their own security. Norway is prepared to shoulder its share of the responsibility.

Finland’s and Sweden’s accession to NATO will usher in a new era in Nordic defence cooperation. A united Nordic region in NATO will enhance predictability and raise the threshold for the use of military force in our neighbourhood. This will make all members of the Alliance safer.

Germany has undertaken a complete overhaul of its foreign and defence policy.

It has earmarked additional funding equivalent to NOK 1 000 billion for defence over the next few years.

EU-NATO cooperation

Mr President

Russia’s war of aggression against Ukraine has highlighted the continuing importance of Article 5 of the North Atlantic Treaty, NATO’s founding charter, as the cornerstone of European security.

European and Norwegian security are also enhanced by the way the EU and NATO cooperate with and complement each other.

The importance of European and transatlantic cooperation is particularly evident in Europe’s south-eastern corner. Norway will continue to cooperate with the Western Balkan countries, the EU and NATO to promote stability and support Euro-Atlantic integration processes.

Participation by Norway, the US, Canada and soon also the UK in the EU’s project on military mobility will make it easier to move military personnel and assets across borders in Europe.

This project is a concrete example of how NATO and the EU can complement each other and work together to strengthen transatlantic security.

Our participation in the European Defence Fund (EDF) is important for the Norwegian defence industry, and in paving the way for future pan-European defence procurement cooperation. 

Norwegian companies won funding for projects amounting to approximately NOK 500 million when the first round of awards was announced by the European Defence Fund in July. Norwegian companies are participating in a total of 17 projects.

These successes would not have been possible without cooperation between the parties here in the Storting in connection with the approval of the current Long-term Defence Plan.

Norway’s support to Ukraine

Mr President

So far, Norway has provided roughly NOK 2.3 billion in civilian assistance to Ukraine and its neighbouring countries. We have also provided around NOK 2 billion in military support.

In independent overviews of military support, Norway is in the top 10 in absolute figures – and only Poland and the Baltic countries have provided more in terms of total aid as a percentage of GDP.

The Government has proposed to the Storting that Norway allocates an additional NOK 10 billion to Ukraine in 2022 and 2023.

NOK 4 billion will used in 2022 for humanitarian aid, to provide budget support to the Ukrainian government administration and to assist Ukraine with gas procurement under an agreement with the European Bank for Reconstruction and Development (EBRD).

This week, the EU launched a new military assistance mission in support of Ukraine (EUMAM Ukraine) to provide military training to Ukrainian Armed Forces personnel in EU countries. The Government is in discussions with the EU about a Norwegian contribution to this mission.

Norway participates fully in the EU Civil Protection Mechanism (UCPM), and support provided through the UCPM supplements other civilian assistance provided by Norway.

Large shipments of pharmaceuticals, medical supplies, power supply equipment and other equipment have been sent from Norway to Ukraine under the UCPM.   

Norway has also made an air ambulance available to the EU for medical evacuation under the UCPM.

Norway has provided transport for the evacuation of 399 Ukrainian patients to various countries in Europe. We have also received 126 patients for treatment at Norwegian hospitals.

This means that nearly a third of the patients who have been evacuated from Ukraine under the UCPM have been transported with help from Norway, thanks to the hard work of the health services and the Norwegian Armed Forces.

Careful coordination is needed to organise the medical evacuation of patients from Ukraine. To help with this, Norway has provided three experts to the EU’s Emergency Response Coordination Centre. And two more Norwegian experts will soon be on their way to assist directly in this important work.

This year, once again, there are millions of war refugees on our own continent. Providing refuge to displaced Ukrainians is another important contribution Norway is making to European solidarity and cooperation.

According to the UN Refugee Agency, well over 7 million Ukrainians have fled their home country, and more than 6.5 million are internally displaced in Ukraine. Ukraine’s neighbouring countries are bearing the brunt of the refugee outflow.

So far, more than 32 000 Ukrainians have come to Norway. Local communities, schools and the health services are working very hard to welcome and help them.

What could turn out to be a very difficult winter is just starting. We can expect to see more people displaced in the time ahead, depending on how the war and the situation in Ukraine evolve.  

Mr President

Our support to Ukraine is the result of a major, concerted effort.

Staff in Norwegian ministries, directorates, agencies and enterprises are working quickly and efficiently to provide support to Ukraine and its neighbouring countries.

Refugees are being taken in. Equipment for repairing electricity infrastructure has been sent, materials for bridge repairs are to be sent, and this will shortly be followed by other assistance. The Ukrainian state is paying salaries to teachers, nurses and doctors with the help of funding from Norway.

Highly competent Norwegian health care personnel are working on the SAS plane that is collecting Ukrainian patients in Poland and transporting them quickly and safely to other European countries for treatment.

When there is capacity in the Norwegian health system to receive Ukrainian patients, it often takes less than 24 hours from the time of receiving a request to accept a patient until Norway makes an offer to provide treatment. This is a fast turnaround time.

In addition to the efforts of the Norwegian public sector, there is considerable engagement by voluntary organisations and groups throughout the country.

And standing here today, I would like to say how proud I am to be a part of this team. I can see nothing but hard work, determination and constructive cooperation.   

We will need more of all of this in the time ahead. Together with our partners and allies, we will stay the course for as long as necessary.

Reconstruction

Mr President

Ukraine will need support for reconstruction on a scale we have not seen since the aftermath of the Second World War.

When I visited Ukraine in May, I saw schools and apartment blocks that had been bombed to ruins. Since then, the scale of destruction has become far greater.

Russia’s attack on Ukraine is also an attack on democracy. We must work together to ensure that democratic principles are upheld during the reconstruction process.

The needs are enormous. Overall planning and coordination of these efforts is vital.

The EU and Ukraine, working in cooperation with other donors and the development banks, have taken on an important leadership role in this respect. An international platform – the Ukraine reconstruction platform – is expected to be established to coordinate reconstruction efforts.

We are now sending two Norwegian experts to assist the European Commission in setting up the reconstruction platform.

Ukraine is already in need of extensive assistance in the form of budget support and funding for the repair of critical infrastructure.

At a conference hosted by the German G7 Presidency on 25 October, there was consensus on the need to speed up this work. The support to Ukraine should be seen as the first phase in the reconstruction of the country. 

And Norway must also speed up its response. We intend to make a significant contribution to the effort to rebuild Ukraine.

Sanctions and their impact on the Russian economy

Mr President

Sanctions are the most important tool we have for reducing Russia’s ability to finance the war in Ukraine. The Government has maintained a clear policy from the outset that Norway will stand together with the EU and other allies in imposing sanctions against Russia.

As the President of the European Commission has emphasised, sanctions come at a high cost, but freedom is ‘priceless’. The EU’s latest package of sanctions – the eighth in the series – was implemented in Norwegian law on 28 October.

It is difficult to put an exact figure on the impact of the sanctions on the Russian economy. But there are some things we do know. 

According to recent estimates by the Russian authorities themselves, the country is now experiencing a recession. Independent experts have estimated that Russia’s economy will shrink by about 5–10 % in 2022 – despite continued substantial revenues from energy exports.

Russia’s international trade is declining rapidly.

Some USD 300 billion of the Russian Government’s currency reserves are frozen. More than 1 000 international companies have pulled out of Russia, completely or partially.

But perhaps the most significant impacts are those that are most difficult to measure. Russian companies’ value chains rely largely on imports of goods and services that are no longer available.

It will take time for the full extent of these effects to be seen. But it has been established beyond any doubt that Russia is now excluded from the global economy to an extent that will have far-reaching consequences, which will only increase as time goes by.

Developments in the European economy

Mr President

Russia is deliberately using its position as a major energy supplier to disrupt the European economy.

High energy prices are greatly worsening the economic outlook for Europe. According to a recent economic forecast, the European Commission expects GDP to grow by only 0.3 % next year.

This is considerably weaker than the July forecast. At the same time, high inflation – as much as 7 % – is expected in the EU in 2023.

Several countries, including Germany, may enter into recession next year.

In September, the inflation rate in Germany, which is Norway’s most important trading partner in the EU, reached 11.6 %. This is the highest level for over 70 years.

However, Germany also has the fiscal muscle to counter a major economic downturn. The country accounts for about one quarter of total EU GDP. It is therefore crucial for the European economy as a whole that Germany prospers.

European public authorities and central banks are facing difficult economic choices. Inflationary pressures are having an impact on households, businesses and industry. At the same time, the central banks are having to tighten monetary policy.

Several European heads of state are now describing the situation in their countries as ‘a wartime economy’. If the coming winter is a cold one, a number of countries will have to ration electricity and natural gas.

The war is affecting the European economies unevenly. Not all EU member states have the same fiscal room for manoeuvre in response to the situation as Germany. Solidarity and coordination between European countries will therefore be crucial.

Norway has large revenues from the petroleum sector and robust government finances. However, if our closest allies experience an economic downturn, this will have a negative impact on the Norwegian economy too.

The EU is by far the most important export market for Norway. Both we in Norway and our partners face considerable challenges when there is growing uncertainty and important value chains are disrupted.

The energy crisis and the green transition

Mr President

Norway is currently the largest exporter of natural gas to the EU.

Earlier this autumn, Norway’s Prime Minister and President of the European Commission Ursula von der Leyen established a task force to strengthen the dialogue between Norway and the EU and explore ways of reducing instability in energy markets.

The task force has played an important role in the exchange of information, particularly on the market mechanisms for natural gas.

The European Council meeting on 20–21 October authorised the European Commission to continue to work on ways of stabilising energy markets and ensuring lower gas prices.

The aim is to adopt measures at the meeting of EU energy ministers on 24 November. So far, the signals from the Commission are largely in line with Norway’s view that expansion of production capacity for renewable energy will be crucial in solving the problems we are facing.

Mr President,

It is in Norway’s interests for Europe as a whole to find solutions to the energy crisis. This was the Prime Minister’s main message when he met European heads of state and government from 44 countries at the European Political Community meeting in Prague on 6 October.

The most important contribution Norway can make to enabling Europe to find a way out of the acute energy crisis is to maintain natural gas production at the highest possible level. The Norwegian authorities are in close dialogue with the gas producers to this end.

We have made the gas transport system more flexible, so that gas can be delivered where the need is greatest. A new gas pipeline has recently been opened from the Norwegian continental shelf to Poland. Its capacity is equivalent to the volume of gas Poland was previously receiving from Russia.

The pipeline sabotage in the Baltic Sea has highlighted the need to secure critical infrastructure on the Norwegian continental shelf and in the North Sea. This has always been a high priority, but we have now introduced further measures in response to the current situation. We are working closely with our allies and partners on this issue.

New elements in Norway’s cooperation with the EU on energy and the green transition

Mr President

In response to the energy crisis, it is a high priority in the short term to ensure that sufficient gas is available to fill storage sites for both this and next winter. At the same time, the EU is also working to ensure adequate natural gas supplies to Europe in the longer term. In June, Norway and the EU issued a joint statement on closer energy cooperation.

In the EU, Russia’s use of energy deliveries as a political weapon is being used as an argument for speeding up the pace of the green transition. This view has also been clearly expressed during the COP 27 climate summit in Egypt.

The EU institutions have also been working under pressure to complete as much as possible of the ‘Fit for 55’ package of climate measures before the end of COP27.

Difficult international negotiations are now in progress in Egypt on a range of topics including strengthening global mitigation and adaptation efforts and expanding climate finance.

Norway and the EU also share a strong interest in the development of energy infrastructure and industry for the future. Specifically, we are now working to make use of opportunities for closer partnerships and Norwegian value creation in areas linked to carbon capture and storage (CCS), hydrogen, offshore wind, raw materials, batteries and green shipping.

These efforts are being carried out partly within the framework of an established energy dialogue and work on EU legislation according to procedures under the EEA Agreement. There are also new initiatives such as the task force appointed by the Prime Minister and the President of the European Commission. In addition, there are plans to develop a strategic industrial partnership between Norway and the EU.

The aim is to promote green industrial development, increase export opportunities, create jobs and achieve greater climate benefits.

Through the North Seas Energy Cooperation, Norway is cooperating with other countries on the development of offshore wind power in the North Sea.

Hydrogen is receiving considerable political attention in the EU, and may in the longer term become an important energy carrier. Norway intends to play a part in the development of a hydrogen market in Europe. We are supporting domestic developments in various ways and are taking part in a range of EU initiatives relating to hydrogen.

Norway can play a key role in a European market for the whole CCS value chain, and we are working to establish agreements that will make it possible to store CO2 from other countries on the Norwegian continental shelf.

Mr President

The legislation included in the Clean Energy Package and the later amendments introduced in the ‘Fit for 55’ package and the REPowerEU plan will be of key importance in achieving the EU’s energy and climate targets for 2030.

Norway already has ambitious targets for renewable energy. Our renewables share, as most recently calculated under the rules of the Renewable Energy Directive, is more than 75 %.

The Government is now assessing the new EU legislation and the implications it may have for the Norwegian energy sector. We consider it important to take constitutional issues properly into account and to fully safeguard Norwegian interests.

It is therefore too early to say when the package will be presented to the Storting for consideration.

Rule of law and democracy

Mr President

European cooperation is dependent on well-functioning democratic states governed by the rule of law.

Regrettably, there have been ongoing setbacks in the development of democracy and the rule of law in a number of European countries. This has been confirmed in a recent report from the High-level Reflection Group set up after the meeting of the Committee of Ministers of the Council of Europe in May 2022.

On the recommendation of the Ministry of Foreign Affairs, the Reflection Group included Ms Ine Eriksen Søreide, who is chair of the Standing Committee on Foreign Affairs and Defence in the Storting.

The report describes the situation in Europe, and points out that Russia’s war on Ukraine is not the only challenge facing Europe.

There is serious backsliding on democracy, the rule of law and respect for human rights in many countries.

The report provides important input to the planned Council of Europe summit to be held in Iceland in May next year. The purpose of the summit is to reaffirm, at the highest political level, our support for European values and willingness to take action to defend democracy, the rule of law and human rights.

New steps taken by the EU vis-à-vis Hungary

Mr President

On 15 September, the European Parliament adopted a resolution stating that Hungary has become ‘a hybrid regime of electoral autocracy’. Hungary is still formally a democracy, but is not considered to meet the necessary conditions to be classed as a fully functioning democracy.

In the resolution, the Council calls on the European Commission to put more pressure on Hungary and to make full use of the tools available.

Shortly after the European Parliament adopted the resolution, the European Commission put forward a proposal to withhold a total of EUR 7.5 billion in funding for Hungary.

The Hungarian Government has proposed the introduction of 17 measures to meet the Commission’s concerns.

No final conclusion has been reached in the matter.

Norway has for a long time followed a clear line vis-à-vis both Hungary and other countries as regards the development of democracy and the rule of law. We will continue to do this.

Closer cooperation with the EU on health preparedness

Mr President

The first confirmed case of COVID-19 has been traced back to this exact date three years ago, in Wuhan in China.

Throughout the pandemic, Norway has been cooperating closely with the EU and has been an integral part of the EU’s health preparedness and crisis response system.

The pandemic brought out the best in relations between Norway and its close partners in the EU. For example, Norway was able to participate in the EU’s procurement of personal protective equipment and vaccines, even though it was not automatically entitled to do so.

The EU is now strengthening its cooperation on health preparedness, for example through the establishment of HERA, the Health Emergency Preparedness and Response Authority. The aim is to better equip the EU to deal with health crises in the future.

Under the EEA Agreement, Norway is in a special position as regards cooperation with the EU. Relevant legislation in various fields including health is incorporated into the Agreement. However, assessments by Norway and the EU agree that this will not be sufficient for cooperation on health preparedness.

The Government is therefore seeking full participation rights for Norway in closer EU cooperation on health preparedness and response. This is also in line with the clear recommendations of Norway’s Coronavirus Commission.

The Storting will be involved in this process in line with normal procedures.

Status of negotiations on a new funding period for the EEA and Norway Grants

Mr President

For 28 years, Norway has played a part in reducing social and economic disparities in Europe through the EEA and Norway Grants.

Together with Iceland and Lichtenstein, we have made funding available for the EU’s least prosperous countries.

During the most recent seven-year period, total funding equivalent to NOK 28 billion has been made available, and 97 % of this has been provided by Norway.

The negotiations with the EU on a new funding period for the EEA and Norway Grants started in June. During the negotiations, we must reach agreement on the amount of funding to be provided, focus areas and priorities.

In Norway’s view, it is also important that the funding is used to promote and protect core European values such as the rule of law and democracy.

We have announced that we will give priority to support for projects on the green transition, promoting democracy, building inclusive societies and preparedness for new crises.

Negotiations on market access for fish and seafood

Mr President

Norway has also started negotiations with the EU on market access for fish and seafood.

Norway is the EU’s largest supplier of seafood, accounting for 27 % of total imports of seafood to the EU. There is a demand for safe, healthy Norwegian fish among EU consumers. Norway’s sustainable seafood production also ensures security of supply in the EU.

The negotiations on the EEA and Norway Grants and on market access for fish and seafood are challenging. It will take time to reach agreement. The Storting will be kept informed of how the negotiations are progressing in the normal way.

Selected current EEA matters

Directive on adequate minimum wages

Mr President

The EU has now formally adopted the Directive on adequate minimum wages, and it has been published in the Official Journal. It has not been identified as EEA-relevant. This is in line with Norway’s views, and we therefore welcome the conclusion.

Railways

Norwegian railways are not governed from Brussels. However, parts of the key framework for our railway policy are incorporated into the EEA Agreement.

The Norwegian railway sector is taking part in research and innovation cooperation under the EU’s Horizon Europe programme. This enables us to make use of new solutions and innovation in order to use the current railway system better and more effectively.

However, the situation also poses challenges. Mandatory competitive tendering for passenger transport services is not our instrument of choice for ensuring good passenger rail services.

The remaining tendering processes for rail services in Norway were therefore cancelled last year. The Norwegian Railway Directorate is now working on direct awards for the important contracts in the Oslo region.

For the time being, the EU Regulation on public passenger transport services by rail and by road includes exemptions allowing for the direct award of certain contracts.

However, the unconditional rules allowing for direct awards will cease to apply in December. We consider it important to retain the option of awarding direct contracts for passenger rail services in Norway after this date as well. In Norway’s view, the legislation provides for this possibility.

The ambitions set out in the current Government’s political platform have been clearly communicated to the EU.

Review of the EEA Agreement

It is now 30 years and one month since the Storting gave its consent to the EEA Agreement.

This spring, the Government appointed a broad-based committee to review Norway’s experience of cooperation under the EEA Agreement over the past ten years. This has been a decade of major change in Europe, involving first a full-scale health emergency and then a dramatic crisis triggered by war on our continent.

The committee’s work is now well under way. It will produce its conclusions in the form of an Official Norwegian Report towards the end of next year. This will provide important input to the public debate in Norway and to the Government’s efforts to safeguard Norwegian interests.

Conclusion

Mr President

I began this address by talking about Nazi brutality against Czech students on 17 November 1939.

This date also commemorates another incident of brutal suppression in Czech and European history.

On 17 November 1989, the authorities violently broke up a peaceful student demonstration in Prague intended to mark the 50th anniversary of the Nazi atrocity.

The 1989 demonstrations triggered the beginning of what we now know as the Velvet Revolution in Czechoslovakia. In a very short time, and without any further violence, power was transferred from the Communist dictatorship to the people.

Young people played a key role as the Central and Eastern European countries struggled for freedom from Communist dictatorship.

Mr President

Today, we can witness history repeating itself once again.

Now, on 17 November 2022, freedom and democracy on our continent are once again in jeopardy.

And this at a time when the Czech Republic, a country that knows only too well the true meaning of oppression, holds the EU Presidency.

Yet again, the task of rebuilding a better Europe will fall to a new generation of Europeans.

I hope that we will be able to make this task easier through the choices we make today.