Meld. St. 5 (2012-2013)

The EEA Agreement and Norway’s other agreements with the EU

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3 Key priorities in Norway’s European policy

Norway’s interests in the context of its cooperation with the EU are complex and diverse. They are primarily related to areas where Norway is covered by EU policy and legislation, and to the further development of the internal market. Norway is also affected by EU policy in areas that lie outside the scope of its agreements with the EU, though more indirectly.

The Government will work to safeguard Norwegian interests in all aspects of Norway’s relations with the EU. However, to achieve results, it is also important for Norway to concentrate its political efforts on priority areas. This chapter outlines some of the key policy areas that will be given particular attention in the time ahead.

A more comprehensive review of Norway’s priorities and interests is given in the annual work programme for EU/EEA issues. The Government intends to develop the work programme into a more strategic instrument of Norway’s European policy.

3.1 Norwegian companies and value creation in the internal market

Under the EEA Agreement, Norwegian companies, workers and consumers have access to the internal market on the same terms as citizens and companies in the other 29 EEA countries. This effectively increases the size of the Norwegian market from 5 million to 500 million people. Developments in the EU in this area are therefore highly significant for the Norwegian economy.

The Government will seek to influence the development of new EU/EEA legislation and implement legislation in such a way that Norwegian citizens and companies can more easily participate in the internal market. The development of common rules ensures predictability and equal conditions of competition for all actors operating in the internal market.

In the wake of the financial crisis, developing the internal market has moved higher up the political agenda once again. The internal market is seen as an important tool for stimulating new economic growth at a time when Europe is feeling the effects of the global financial crisis. This is clearly reflected in the Europe 2020 strategy. In April 2011, the European Commission presented a Communication on the internal market, the Single Market Act I, which identified 12 levers to boost growth and strengthen confidence. Revitalising and deepening the internal market is considered particularly important for enhancing the growth potential of small and medium-sized enterprises (SMEs).

The Commission carried out an extensive consultation process in connection with the preparation of the Single Market Act I. Norway participated in this process, and as part of this work the Government conducted an open dialogue with representatives of Norwegian companies and organisations. The Government intends to continue this dialogue with stakeholders when developing and preparing Norway’s input on the development of the internal market.

The European Commission presented a second Communication on the internal market, Better Governance for the Single Market, in June 2012. This Communication proposes a number of measures to improve governance of the internal market including measures to promote more effective implementation of internal market rules, to speed up procedures for dealing with breaches of EU law and to ensure smarter use of IT technology. The Commission also urges all the states to establish Single Market centres as national centres of expertise on the internal market. A European network of single market centres will also be established. The Government will consider whether to establish a centre of this kind in Norway.

In many areas it is more important to implement existing rules than to develop new legislation. For Norwegian companies and value creation in Norway, it is important that the rules are implemented at national level in a timely manner and in a way that ensures the good functioning of the internal market. A thorough knowledge of the rights and obligations of the various actors operating in the internal market is also vital if we are to make the most of the opportunities it offers. The Government will work to ensure that the relevant actors are informed of their rights and of how to make effective use of them. In this way the positive effects of the EEA Agreement can be enhanced. Putting in place tools to address these needs is part of ensuring good governance of the internal market, as is establishing effective systems for cooperation between the authorities in the EEA states.

In autumn 2012 the Commission will propose further measures to strengthen the internal market, in the form of the Single Market Act II. The Government has expressed its support for these efforts, with particular emphasis on promoting good governance of the internal market and the systematic reduction of trade barriers, and on strengthening the social dimension and consumer rights and developing the digital internal market.

Banking system and financial services

Rules regulating the banking system and financial services account for an increasing proportion of internal market legislation. This is largely due to the financial crisis. The EU recently adopted extensive new capital requirements for insurance companies and new securities legislation. The Commission has also proposed new capital requirements for banks and investment firms, a new directive on deposit guarantee schemes, a new EU framework for bank recovery and resolution, as well as a regulation on insider trading and market manipulation (market abuse). Most of these are considered to be EEA relevant.

In 2010–11, the EU established new supervisory authorities for the financial sector. The new European Systemic Risk Board is responsible for the macro-prudential oversight of the financial system, i.e. for monitoring systemic risk across the entire European financial market. Three new supervisory authorities are responsible for supervising financial activities at the micro level, i.e. for supervising individual institutions in the banking, insurance and pensions, and securities sectors. Norway’s association with these new bodies has not yet been clarified, see Chapter 5.3.3. More recently, the EU also presented plans for a banking union involving joint regulation and supervision of major banks operating in several countries, as well as a joint deposit guarantee scheme for these banks.

Norway intends to contribute to the development of effective common international rules and framework conditions for the financial sector. This is important for reducing the risk of crisis and economic collapse. However, the increasing harmonisation of legislation may reduce the options available to individual countries at national level. In the view of the Norwegian authorities it is crucial that legislation promotes the development of strong financial institutions to the greatest extent possible.

The EU’s increasing use of supervisory authorities raises issues in relation to the EEA Agreement’s two-pillar structure and the Norwegian Constitution’s provisions on transfer of powers, as discussed in Chapter 5.3.3. It does not appear appropriate to develop corresponding powers relating to the financial sector in the EFTA institutions. As long as Norway is unable to participate fully in the work of the EU’s new financial supervisory authorities, the extent to which Norwegian legal entities can be made subject to the decisions of these authorities is clearly limited. So far, contact with the EU has indicated that it will be difficult for the Norwegian authorities to gain more than limited observer status in the European supervisory bodies. The fact that the Norwegian authorities do not participate in the European financial supervisory bodies on the same footing as the EU member states, and in particular the other Scandinavian countries, may prove to be challenging. The establishment of the proposed banking union in the EU could lead to more problems of this kind. These issues are being discussed with the EU.

3.2 Key policy areas

3.2.1 Labour relations and social welfare

In the Government’s view it is essential to ensure that the Norwegian model of labour relations is maintained. This involves continuing the tripartite cooperation between employers, trade unions and the state, and retaining the ability to enforce Norwegian rules on pay and working conditions effectively.

The main features of the Norwegian model of labour relations – legislation and agreements, wage determination, cooperation between the social partners and labour market policy – have been in place since 1994. In general, the period 1994–2012 has been one of positive development in terms of investment, employment, pay and working conditions, and the collective agreements. Cooperation between the social partners and the authorities has been strengthened. Working life in Norway is well organised; most people are in permanent employment and have written contracts of employment. The proportion of people in temporary employment in Norway is lower than in many countries in Europe. The Norwegian social model, of which the tripartite cooperation is a cornerstone, is set to last.

Since the enlargement of the EU/EEA in 2004 and 2007, Norway has been one of the countries where labour immigration from other EEA countries has been highest in proportion to the population. This is partly due to the strong demand for labour and high wage levels in Norway. These labour immigrants have contributed greatly to growth in production and employment, not least in rural districts, and thus have also played a role in safeguarding the Norwegian welfare system.

At the same time this increase in labour immigration has made it more challenging to ensure decent work and combat social dumping in Norway. The Government has taken a number of steps to deal with these issues, including producing two action plans against social dumping. It has been possible to introduce far-reaching measures, such as employer joint and several liability under the system of general application of wage agreements, within the framework of the EEA Agreement. The measures have also strengthened efforts to improve conditions in certain branches, such as the cleaning industry, that had unresolved problems relating to unscrupulous practices long before 2004. Norway’s efforts to combat social dumping are further discussed in a White Paper from the Ministry of Labour, Joint responsibility for a good and decent working life (Meld. St. 29 (2010-2011)), and in Chapter 16 of the report Outside and Inside: Norway's agreements with the European Union (NOU 2012: 2).

Given the continuing and sometimes large disparities in pay and working conditions between different EEA countries, labour migration and the associated risks of low-wage competition and circumvention of legislation must be expected to continue. In future, the level of labour immigration to Norway will depend in part on the development of the labour market in Norway and how this compares with the situation in other countries. This in turn will be affected by economic developments in Europe in the light of the financial and debt crisis. In times of economic decline, labour rights can come under pressure. The Government has worked to prevent this. Together with the social partners, the Government will maintain its efforts to combat social dumping and unscrupulous practices in Norway.

Through the EEA Agreement, Norway participates in efforts to strengthen the EU’s social dimension, which is based on the establishment of common minimum rules for the working environment and workers’ rights. In many areas these rules have also strengthened the rights of Norwegian workers.

Textbox 3.1 The Government’s initiative to ensure decent work

The Government has introduced a number of initiatives, within the framework of EEA law, to ensure decent work in Norway. These include:

  • Service centres for foreign workers in Oslo, Stavanger and Kirkenes

  • ID cards in the building and construction industry

  • The right of access to information for employee representatives

  • The duty to provide information on regulations concerning general application of wage agreements and to ensure compliance with them.

  • Requirements to observe Norwegian standards for working conditions in municipal contracts – ILO Convention no. 94

  • Joint and several liability for employers under wage agreements that have been made generally applicable

  • Regional safety representatives in the hotel, restaurant and cleaning industry

  • An authorisation scheme for cleaning companies and ID cards for the cleaning industry

In order to find a balance between conflicting considerations and interests in the labour and services markets, the EU has adopted legislation such as the Posting of Workers Directive (96/71/EC) and the Directive on Temporary Agency Work (2008/104/EC). In recent years the European Court of Justice has dealt with several cases that have had implications particularly for the free movement of services and freedom of establishment. Some of these judgments, often referred to as the Laval Quartet, have sparked controversy. They illustrate the way in which contentious issues in labour market policy in the EU and EEA are to a large extent decided through the judicial system. These decisions also have implications for Norway. National courts, the EFTA Surveillance Authority and the EFTA Court also set precedents in this area. There has been disagreement between Norway and the Authority over certain provisions of the regulations on pay and working conditions in public contracts. Some aspects of the regulations concerning general application of wage agreements in the shipping and shipbuilding industry have also been subject to judicial review.

The Government will seek to ensure that new EU rules do not obstruct measures that Norway has introduced or plans to introduce, for example in connection with the action plans against social dumping. For Norway it is particularly important to safeguard pay and working conditions for workers who are involved in business establishment and the provision of services across national borders, and to protect collective rights, including the right to strike.

There is no reason to expect that the EU will introduce extensive new labour legislation. However, in March 2012 the Commission put forward a proposal for an Enforcement Directive to correct weaknesses and inadequacies in the way the Posting of Workers Directive is applied. The purpose is to increase monitoring and compliance and to combat unfair competition and social dumping. The Government is, in principle, in favour of improving the enforcement of posted workers’ rights, but has certain concerns about the proposed directive.

A new Regulation, known as the Monti II Regulation, was proposed at the same time, with the aim of removing the uncertainty surrounding the exercise of the right to take collective action that has arisen following the European Court of Justice rulings. The draft Regulation gave equal status to the national right to strike and the freedom to provide services. The proposal met considerable resistance in many EU countries and in 2012 the Commission decided to withdraw the proposal. The Government’s view is that it is inappropriate to introduce legislation that restricts the right to strike.

Participation in working life brings with it entitlement to many welfare benefits, both for individual employees and for their family members. These apply equally to foreign and Norwegian workers.

Under the EEA Agreement, the general rule is that social security benefits are to be paid irrespective of where the person who is a member of the social security scheme or his/her family members are resident. Entitlements under Norway’s National Insurance Scheme are adapted to the high salary levels and cost of living in Norway, and the payments are therefore very generous when used abroad. For people resident in Norway the benefits are generally designed to make it more attractive to work than to collect benefits. This incentive is undermined if the benefits are paid out in countries where the cost of living is lower. However, the recorded export of benefits amounts to only a small proportion of the total expenditure channelled through the Norwegian Labour and Welfare Administration. Nevertheless, with the rise in labour immigration to Norway and the increased mobility of people between Norway and other EEA countries, the proportion of benefits that are exported is growing. The possibility that benefits will be exported is assessed when the various schemes are developed. The Government is monitoring the situation closely to ensure that benefit schemes are not abused.

In 2009, the Government appointed the Welfare and Migration Committee, chaired by Professor Grete Brochman, to assess the elements in the Norwegian welfare model that influence and are influenced by increasing migration. The committee presented its recommendations in June 2011 in Official Norwegian Report NOU 2011: 7 Welfare and Migration. As part of the follow-up to the committee’s recommendations, the Ministry of Labour has initiated an internal process with a view to carrying out a comprehensive review of current rules for membership of the Norwegian National Insurance Scheme and the export of benefits received under the scheme. This will involve an assessment of the existing rules for the various pension schemes, such as the retirement pension and the disability pension, as well as for temporary benefits, such as sickness benefits and unemployment benefits and other forms of cash payment under the National Insurance Scheme. The review will also look at rules for exporting benefits to other EEA countries, countries with which Norway has a social security agreement and countries with which it has no such agreement. The purpose of this work is to provide a basis for achieving the best possible understanding of the problems associated with increased mobility across national borders and the legal options open to Norway, and to identify areas where adjustments are needed.

The Government takes a broad approach in its efforts to promote Norwegian views and interests in the area of employment and social affairs vis-à-vis the EU. Norway participates in various working groups, expert groups and meetings within the EFTA/EEA, for example concerning the free movement of workers, health, safety and environment, and labour law. Norway is also involved in relevant Nordic working groups and committees where topics relating to EU/EEA are discussed. Norway cooperates with its Nordic neighbours in areas where the Nordic countries have common interests. Like Norway, several EU countries have been sceptical to aspects of the Commission’s work on labour legislation. Norway is therefore in a good position to continue to work together with like-minded countries to influence developments so that they take the desired direction.

Labour rights are also safeguarded through other international conventions by which Norway is bound, including several human rights conventions and labour conventions.

Cooperation on cross-border health threats and health preparedness

Safeguarding health and welfare and ensuring adequate emergency preparedness and response are important goals of international cooperation. Over the past few years our emergency preparedness and response systems have been put to the test in situations that have varied widely in nature and in scope. Major incidents such as the terrorist attack on the government offices in Oslo and the island of Utøya on 22 July 2011, the earthquake and tsunami in Japan in March 2011, the volcanic eruption in Iceland in 2010 and the 2009 flu pandemic have led to new demands for civil protection and emergency preparedness and response, and have demonstrated the need for cooperation at both national and international level.

Norway cooperates with the EU in the area of health security, in particular through the EU’s Health Security Committee, the European Centre for Disease Prevention and Control and the European Food Safety Authority. The cooperation encompasses information exchange, prevention, monitoring and risk assessment, and the development of early warning and response mechanisms for dealing with incidents that may pose cross-border health threats. This cooperation is particularly important for ensuring that national measures and plans are adequately coordinated with those of our neighbouring countries and the rest of the world. It also enables us to learn from other countries’ experiences and solutions.

Norway’s cooperation with the EU in the field of security and emergency preparedness and response

Norway’s cooperation with the EU in the area of civil protection is regulated primarily through the EEA Agreement. Norway has participated actively in the Community Mechanism for Civil Protection, which coordinates the response to incidents both inside and outside Europe. The main function of the EU’s Monitoring and Information Centre, a tool under the Mechanism, is to monitor potential and actual emergencies, receive and distribute requests for assistance and coordinate the member states’ offers of assistance. The Norwegian Directorate for Civil Protection and Emergency Planning is responsible for following up the work of the mechanism on behalf of the Ministry of Justice and Public Security and is the national contact point for requests from both NATO and the Monitoring and Information Centre.

In recent years the Community Mechanism for Civil Protection has developed considerably, particularly in terms of its operational role. Initially an emergency preparedness and response mechanism for dealing with incidents within Europe, it has now become a relevant and much needed resource for responding to natural disasters outside Europe too. There is also focus on ensuring close coordination between civil protection and humanitarian aid efforts, as well as on areas such as critical infrastructure, environmental contamination, major accidents etc.

As part of the EU Action Plan on combating terrorism the EU has initiated a process to regulate and limit access to explosives and chemical, biological, radiological and nuclear materials. Norway has followed this process closely. The proposed measures fall within the scope of the EEA Agreement.

3.2.2 Energy

As a major net exporter of energy, Norway is in a unique position in the EEA, with interests, resources, needs and opportunities which may differ from those of other countries. The Government gives priority to managing Norway’s interests in such a way that its energy resources benefit the entire Norwegian population.

The EU has expanded regulatory measures for energy and developed a more comprehensive energy policy over the years, particularly as a result of the desire to create a more integrated internal market. The EU has not, however, challenged the right of individual countries to control their own energy resources, and the member states continue to develop their own energy policies based on national interests. Under the EEA Agreement, Norway has implemented all the most significant EU energy legislation related to the internal market.

Under the Lisbon Treaty, the EU now has the authority to develop a more integrated energy policy, which has heightened ambitions of developing a common European energy policy. Resource management still remains a national responsibility. The 2007 climate and energy package established what are known as the 20–20–20 targets, (a 20 % reduction in EU greenhouse gas emissions, raising the share of EU energy consumption produced from renewable resources to 20 %, and a 20 % improvement in the EU’s energy efficiency). Legislation intended to achieve these targets has also been introduced. In March 2011, as a follow-up to 20–20–20 targets, the EU adopted the Energy Efficiency Plan 2011 for the period up to 2020. The Energy Efficiency Plan is in principle not part of the EEA Agreement, but contains measures supported by EU legislation that may be EEA relevant. It is therefore in Norway’s interests to follow the implementation of the Energy Efficiency Plan closely.

According to the Energy Roadmap 2050, which was under discussion in the Council in 2011–12, the primary objective for the EU’s energy policy is to ensure a secure, sustainable and competitive energy supply. The long-term strategic choices the EU makes in the period up to 2050 will be important for Norway as a major supplier of oil and gas to the EU and part of the EU internal energy market. The roadmap focuses on the need to cut CO2 emissions to 80–95% below 1990 levels by 2050, but also identifies security of supply and reduced import dependency as additional incentives for transforming the energy system. The EU’s efforts to increase renewable energy production must be seen in this light. It is difficult to estimate how much renewable energy production will grow in the period up to 2050, but it seems clear it will increase. An increase in renewable energy production in the EU will make production more unpredictable and irregular, which will increase the need for flexibility in the rest of the power system. Hydropower and gas could be important in this context and may open up new opportunities for Norway.

More than 60 % of the gas and more than 80 % of the oil used by the EU is imported. Given the large volumes of energy imported by the EU, it will not be enough to develop a common internal energy market. Relations with countries outside the EU are also important for achieving the EU’s primary energy policy objectives. In this context Norway is an important partner for the EU.

Norway is a major supplier of energy to the EU, in the form of natural gas, electricity and oil. Some 20 % of the EU’s natural gas consumption comes from Norway. Norway therefore plays an important role in ensuring security of supply in the EU. At the same time, as an export nation Norway is dependent on well-functioning and predictable markets for its energy products. EU policy affects the Norwegian energy sector both directly through EEA legislation and indirectly as a result of the impact it has on the gas and electricity markets. This is particularly important in the case of gas. In this context, indications from the EU that natural gas has a long-term place in the future European energy mix are very significant.

Norway has been an integral part of the EU’s internal electricity market for a long time. The Norwegian electricity grid is physically connected to the other Nordic countries and the Netherlands through a number of power lines and cable links. Work is currently underway to establish two new cable links in the near future, first to Germany and then to the UK.

Through the EEA Agreement, Norway participates fully in the internal energy market. This has included close cooperation with the EU on energy efficiency, renewable energy and the development of new energy technologies within the framework of the EEA Agreement, for example through relevant EU programmes. Norway has a clear interest in participating in the development of EU legislation and in EU programmes. EU legislation in the area of energy is important for Norway, as energy is an area in which Norway has strong economic interests. Close follow-up is required throughout the entire legislative process, from the early decision-shaping phase to the work on EEA adaptations and implementation in Norway.

The EU aims to have a fully functioning energy market in place in 2014. Three internal energy market packages, the most recent of which was adopted in 2009, have resulted in market opening and increased integration of the energy markets in the EU. The Government will work actively to enable Norway to participate in the bodies and joint structures that are developed in Europe as far as possible on an equal footing with the EU member states, within the framework of the EEA Agreement. Norway participates as an observer in the EU’s committee on cross-border trade and in the forums for national regulatory authorities and member states under the Commission – the Electricity Regulatory Forum (Florence Forum) and the Gas Regulatory Forum (Madrid Forum).

In the area of energy technology Norway participates in the EU’s Seventh Framework Programme for Research and Technological Development as well as in the European Community Steering Group on Strategic Energy Technologies and subsidiary groups under the Strategic Energy Technology Plan, which establishes guidelines for future EU research and technology cooperation. Norwegian participation in the new EU Framework Programme for Research and Innovation, Horizon 2020, which is due to be launched in 2014, will be a key priority in the future. Norway also participates in relevant initiatives and cooperates with the EU on carbon capture and storage.

Norway maintains close dialogue with the EU on energy issues. In 2002, as a complement to the EEA Agreement, a regular dialogue on energy policy with the EU’s Commissioner for Energy was established. Over the course of 10 years this has been an important channel for raising issues of particular significance to Norway’s relations with the EU. The dialogue is an important instrument and has enhanced understanding both of EU political processes relating to energy and of Norway’s energy situation. The dialogue addresses issues relating to key topics such as energy infrastructure, energy development in the period up to 2050, natural gas, renewable energy and the internal market. The Government attaches great importance to cooperation with the EU in the area of energy and regards the energy dialogue as extremely important in this context.

3.2.3 The environment, climate change and food safety

The major environmental problems we are facing transcend national borders and make binding cooperation and common rules essential. Norway and the EU base their environmental policy on the same fundamental principles and an understanding that environmental considerations must also be an integral part of other areas of policy. As set out in the EEA Agreement, Norway and the EU share the same aims: to ensure a high level of protection concerning health, safety and the environment and to preserve, protect and improve the quality of the environment. Since the EEA Agreement was signed, it has therefore been a political aim to maintain close, binding cooperation with the EU on environmental policy, and much of the EU’s legislation on environmental issues has been incorporated into the EEA Agreement. Norway therefore participates actively and extensively in the development of common EU environmental rules. This participation is also important in terms of developing knowledge and ensuring effective implementation of relevant legislation in Norwegian law.

EU environmental legislation has developed considerably since the conclusion of the EEA Agreement. Nowadays the tendency is towards framework directives and cross-sectoral policy instruments and objectives. Like legislation in other policy areas, new environmental legislation must be independently assessed to determine its EEA relevance and the consequences for Norway if it is incorporated into the EEA Agreement. This is further discussed in Chapter 5.

Norway will continue to be a leading nation in environmental and climate policy and will work to secure ambitious and binding multilateral environmental agreements. Norway cooperates with the EU with a view to establishing ambitious climate targets at the international level and cost-effective, market-based instruments to reduce emissions in the EEA. The further development of the EU emissions trading system will be particularly important for Norway. With the extension of the system in 2013, it will apply to approximately 50 % of Norway’s greenhouse gas emissions. A further tightening of the cap (reducing the total number of emission allowances) is being discussed by the EU and is supported by Norway. Norway will cooperate with the EU on establishing stricter standards for vehicles and encouraging the use of more environmentally friendly fuels to reduce emissions in the transport sector, as discussed in the most recent White Paper on Norwegian climate policy (Meld. St. 21 (2011–2012). The EU’s work on these issues is also important for reducing emissions in Norway.

In accordance with the precautionary principle, Norway attaches importance to the further development of EU chemicals legislation to ensure risk assessment of new substances, including nanomaterials and endocrine disruptors, as well as to ensure better consideration of the combined effects of chemicals (the cocktail effect). Norway also considers it important that legislation governing articles imported from outside the EEA is strengthened. Norway intends to play an active role in further developing the EU chemicals legislation, the REACH Regulation, both because it is part of the EEA Agreement and as such has a direct impact on Norwegian chemicals policy, and because it can be used to gain acceptance for Norway’s proposals on raising the level of ambition in this area in Europe. In the current economic situation it is important to support REACH and promote its further development and improvement. This legislation is also helping to raise global standards, since countries outside Europe are also adapting to it. The Norwegian authorities were actively engaged in lobbying efforts vis-à-vis the EU in connection with the development of the REACH Regulation during both the preparatory and the adoption phase of the legislative process. This work is now continuing in the implementation phase as the scope of the regulation is continually being expanded to encompass new substances.

In the area of waste management countries have considerable flexibility in implementing the rules as the EU’s waste legislation only establishes minimum standards, allowing countries to introduce stricter rules in their national legislation. One example is the rules on take-back schemes for waste electrical and electronic equipment under the WEEE Directive, which have now been revised by the EU. Norway’s experience and expertise in waste management has made it possible to exert an influence on the development of EU legislation, and the EU’s new WEEE Directive is closer to Norwegian waste legislation. Norway has long had a high profile in this area and has taken a proactive approach throughout the entire process, both by providing written input at the political level and through meetings with senior EU officials.

Marine and inland water management in the EEA is a key area for Norway. Norway has a particular responsibility here in its capacity as steward of vast sea areas and of the environment and natural resources in the High North. Both the management plans for sea areas and the management plans drawn up under the Water Management Regulations are important tools for achieving a more integrated approach to the various types of environmental pressure. Norway has played a pioneering role in the development of integrated marine management plans, and the EU’s Marine Strategy Framework Directive has been developed largely along the same lines as the plans for Norway’s sea areas. In 2011 the Government decided that the Marine Strategy Framework Directive was not to be incorporated into the EEA Agreement on the grounds that it applies largely to areas outside the geographical scope of the EEA Agreement. A decision was also taken to further strengthen the already close cooperation with the EU on management of the marine environment. The implementation of the Water Framework Directive in the EEA, the implementation by the EU countries of the Marine Strategy Framework Directive and the ongoing reform of the EU’s common fisheries policy are important in this context.

The EU is developing comprehensive strategies for climate and environmental policy through what are known as roadmaps and environmental action programmes. In 2012 the EU is due to establish a new strategy in the form of a seventh Environmental Action Programme, which will set out important guidelines for environmental and climate policy in the EEA for the next decade. The EU’s Roadmap to a Resource Efficient Europe is a tool for promoting a green economy and the sustainable use of resources. The roadmap contains a number of initiatives and proposals for new legislation. Key themes include waste as a resource, the value of ecosystem services and green public procurement. Norway has wide experience of using environmental taxes and of integrating environmental considerations into all sectors of the economy.

High priority will be given to cross-sectoral efforts, as new environmental and climate legislation, such as maritime spatial planning and revised air pollution legislation, will primarily be cross-sectoral in nature. Norway will continue to cooperate with the other Nordic countries at all levels to build alliances and coordinate input into decision-making processes.

Food safety

Legislation relating to food safety accounts for by far the largest proportion of legislation under the EEA Agreement. Norway and the EU share many common interests and values in this area, including an interest in ensuring a high level of consumer protection and effective controls at all stages of the food production chain. Food safety legislation is constantly being further developed and revised. It is therefore essential to maintain a focus on this area. Priority will be given to ensuring active Norwegian participation and involvement in the development of EU policy and legislation. Norway will work to ensure that food is safe and wholesome, and will give priority to preventing food safety problems by taking an integrated approach to environmental considerations, intermediate inputs, animal health and human health. It is important that we use the options available to us under the EEA Agreement to ensure that Norway’s food legislation is as flexible as it is in the other EEA countries. Caution must be exercised when new technologies are harnessed and the focus must be on production methods that are considered safe. We will continue to pursue a restrictive policy with regard to genetically modified organisms.

Figure 3.1 The Norwegian company Pharmaq has received funding under the EU’s Eurostars Programme to develop new salmon vaccines, together with the Swedish company Isconova. The Eurostars Programme provides funding to research-performing small and medium-sized e...

Figure 3.1 The Norwegian company Pharmaq has received funding under the EU’s Eurostars Programme to develop new salmon vaccines, together with the Swedish company Isconova. The Eurostars Programme provides funding to research-performing small and medium-sized enterprises.

Photo: Kjetil Malkenes Hovland

3.2.4 Cooperation on research and education

An integrated policy for the internationalisation of research and education is essential for ensuring quality, increasing competitiveness and access to new knowledge, and for strengthening cooperation on societal challenges and in policy areas that are important for Norway. Participation in the EU framework programmes for research and technological development and EU programmes for education and training is crucial in this context. The EU’s Seventh Framework Programme for Research (FP7) is the largest programme in which Norway participates under the EEA Agreement. It accounts for close to 70 % of Norway’s total contribution to EU programme cooperation.

Norway has taken part in the EU framework programmes for research and in EU education and training programmes since the 1980s and 1990s respectively. Through the EEA Agreement, Norway participates on an equal footing with the EU member states. Norway has observer status in most of the committees that administer the programmes and in other advisory bodies, and is regularly invited to participate at informal ministerial meetings.

The need for a common research effort in priority policy areas has led to a strengthening of research cooperation across national borders in Europe. Under Article 179 of the Lisbon Treaty, the EU countries have undertaken to work towards the achievement of a European Research Area (ERA). The ERA is described as an open space for research within the internal market in which there is free movement of knowledge – the “fifth freedom”. The ERA is discussed in more detail in Box 6.2.

The EU research programmes have served as important instruments for promoting concrete steps towards the development of the ERA, which is also a key element of the Commission’s green paper on a new strategic framework for EU research and innovation funding, Horizon 2020, to be launched in 2014. Participation in the ERA is therefore closely linked to participation in EU research programmes.

Horizon 2020 will focus on three priority areas: excellent science, competitive industries and better society. The programme will provide the basis for innovation and policy development in a number of sectors, with a view to meeting common societal challenges relating to the environment and climate change, energy, health and food security, transport and civil protection.

Textbox 3.2 About the ERA

The Commission launched the idea of a European Research Area in 2000. The aim was to create a space for the free movement of knowledge, by strengthening cooperation and the integration of research policies in Europe. The development of the ERA therefore involves establishing a framework for integrating research policy at the European level and identifying ways in which Europe can address common priorities and challenges through joint programmes. Concrete examples of this are the joint programming initiative to meet the challenges regarding European seas and oceans (JPI Oceans) and cooperation on the establishment of an integrated pan-European infrastructure for state-of-the-art research on technologies enabling CO2 capture, transport and storage (CCS). In 2007–08 the idea of the ERA was further defined and five areas for further development and cooperation were identified: joint programming initiatives; policies to safeguard working conditions and career development opportunities for mobile researchers; common European research infrastructures; policies to promote access to and transfer of scientific knowledge; and international research cooperation with countries outside Europe. Under the Lisbon Treaty, the EU countries are committed to working towards the realisation of the ERA. Norway participates in the ERA, both in specific programmes and in advisory committees and cooperation bodies. This participation enables us to encourage initiatives in areas that are politically important to Norway (for example on marine and maritime issues and in areas such as climate change, energy, health and food).

Norway’s contribution to the programme budget is calculated on the basis of the ratio between Norway’s GDP and the combined GDP of all the EU countries. For the period 2014–20 the Commission has proposed a budget of approximately EUR 88 billion. It has been challenging for Norway to obtain as much in project funding from the EU as it contributes to the programme budget, despite the fact that Norwegian research groups have a high profile in Europe and contribute to policy development in the EU in fields such as the environment, climate, polar issues, and the marine and maritime sector. Health research groups are also increasingly focusing their efforts on EU research initiatives, and Norway plays an active role in several joint programming initiatives on health policy issues. However, project funding received from the EU is only one of the benefits Norway gains by participating in EU research cooperation. Norwegian research groups are able to build valuable networks and gain access to all the knowledge generated in the projects in which they participate. Continued Norwegian participation in EU research programmes must be assessed from a societal, business, budgetary and broader foreign policy perspective. Horizon 2020 will be discussed further in the forthcoming White Paper on research policy.

The EU’s growth strategy, Europe 2020, provides the political framework for the next period of education and research programmes.

The proposed new EU programme for education, training, youth and sport, Erasmus for All, is broader in scope than the current education programmes. The main motivation for developing the Erasmus for All programme is to strengthen the links between the development of education and training policy and education programmes at the EU level, from early childhood to adult education. The programme will also promote a knowledge-based economy in the EU – for example by creating a solid foundation for innovation. There will be a new focus on strengthening partnerships between the education sector and employers. The programme will promote innovation, entrepreneurship, growth and employment, as well as democracy-building, active citizenship and multicultural understanding in Europe. In addition it will have a greater and more visible international dimension and will promote cooperation beyond Europe’s borders.

The Government intends to follow the processes in the EU closely and will revert to the Storting about Norway’s participation in Erasmus for All and Horizon 2020 once the programmes have been adopted by the EU.

The Government will also follow the development of the ERA and work to ensure close cooperation in priority policy areas.

3.2.5 Rural and regional policy

The objectives of the Government’s rural and regional policy are to ensure equal living conditions, to maintain settlement patterns, and to promote value creation, employment and welfare throughout the country.

The population of Norway is relatively small, and settlement is dispersed. Overall, Norway has a high rate of population growth, high levels of employment, low levels of unemployment and a high standard of living. The positive population growth in many municipalities in recent years can largely be explained by immigration.

However, some regions of Norway face considerable challenges. These relate primarily to population decline (an aging population and outward migration) and a lack of job opportunities. Domestic net migration towards the central regions of Norway is in part due to the greater number of jobs that are attractive to young people to be found in these areas. However, these challenges must be said to be moderate in comparison with those faced by the other Nordic countries and the rest of Europe.

A characteristic feature of interactions between urban and rural areas in Norway is that natural resources and production tend to be located in less central regions, whereas the head offices of companies serving national and international markets are located in the larger cities, as is most of the public administration. The Norwegian export sector is largely located in the coastal counties of Norway. The Norwegian economy, based as it is on raw materials and exports, is dependent on the existence of good, stable international framework conditions for foreign trade. International framework conditions are therefore very important for Norway’s rural and regional policy.

Economic growth in Norway in recent years is largely due to improvement in its terms of trade, in other words between export prices for products such as oil and fish on the one hand and consumer goods that Norway imports on the other. Market access and the economic situation in our trading partner countries are two key factors that affect the overall Norwegian economy. Because of the structure of the Norwegian economy, these factors are also highly significant for Norway’s rural and regional policy.

The links between regional development in Norway and developments in the rest of Europe have become increasingly clear in recent years. Parts of the Norwegian public and private sectors are experiencing a shortage of labour. Labour immigration therefore has a positive impact on business development and the provision of public services. Following the enlargement of the EU to include the countries of Central and Eastern Europe, there has been considerable labour immigration to Norway from the EU. Many of these labour migrants come from the Baltic countries and Poland, as well as from Sweden. It will be important in the future to follow the further development of this labour immigration and to assess the consequences for local communities and companies in Norway of a possible return migration.

One of the objectives of Norway’s rural and regional policy is, as mentioned above, to maintain the main features of present settlement patterns. To achieve this goal, the Government is seeking to promote local and regional growth in areas where economic growth is relatively low, distances to markets are long, the economy is poorly diversified and the population is stagnant or declining.

The challenges Norway’s regions are facing differ somewhat from those seen in EU regions. In Norway wealth is relatively evenly distributed, but low population density and long distances between communities and economic centres pose problems for companies in peripheral regions. It in is Norway’s interests to continue to be able to pursue a vigorous policy to meet the challenges Norway’s regions are facing. Key instruments of rural and regional policy, covered by the EEA Agreement, are regional investment aid and the differentiated employers’ national insurance contribution scheme. It is important for Norway to continue to be able to use schemes such as these to support business development and thereby population growth in sparsely populated areas. Positive economic and social development in the EU is also very important for Norway’s rural and regional policy in terms of providing a solid basis for Norwegian exports.

Textbox 3.3 Differentiated employers' national insurance contributions

The Norwegian scheme for differentiated employers’ national insurance contributions is an important instrument of regional policy. Under the scheme, the country is divided into different geographical zones with varying rates of national insurance contributions. Employers in more peripheral areas pay lower national insurance contributions than employers in central areas. State aid schemes that existed when the EEA Agreement came into force in 1994 had to be submitted to the EFTA Surveillance Authority for approval. Norway did not consider the scheme for differentiated employers’ national insurance contributions to be state aid, and so did not submit it for approval. The Authority disagreed with this assessment and opened an investigation procedure in 1995. In 1997 the Authority concluded that aspects of the Norwegian scheme must be regarded as state aid and required Norway to amend the scheme. In 1999 the Norwegian authorities brought the case before the EFTA Court. Norway lost the case, but the Court ruled that the scheme involving different zones and rates could be continued, if amended in accordance with the decision of the Authority. In 2002, following a similar case in the EU, the Authority required Norway to make further amendments to the scheme. With broad backing from all the political parties, Norway received support from Iceland and Liechtenstein to invoke an exemption clause in the Surveillance and Court Agreement and continue parts of the scheme, i.e. the zero rate in Finnmark and Troms. The Authority’s decision was thereby set aside. In 2004 the Commission carried out a further revision of the guidelines for regional aid. Norway cooperated closely with Sweden and Finland to achieve the desired adjustments to the guidelines. In 2005 the Commission adopted new regional aid guidelines that allowed for aid to be provided to regions with low population density to prevent outward migration. As a result Norway was able to reinstate the system of regionally differentiated employers’ contributions of 2007. There has been broad political agreement about the scheme in Norway and the Norwegian authorities will give priority to ensuring that the current scheme can be continued after the next revision of the guidelines for regional aid in 2013.

The Government will monitor EU processes that may have implications for the range of options available to Norway in pursuing an active and targeted rural and regional policy. EU competition legislation is very important in this context, in particular legislation on state aid and regional aid. Public procurement legislation is of crucial importance for Norway’s municipalities and counties in their role as purchasers of goods and services, and compliance with the legislation requires significant resources and expertise. In connection with the ongoing revision by the EU of the existing public procurement directives, a review of Norwegian legislation will also be carried out. A committee will be appointed to review the specifically Norwegian aspects of public procurement legislation, including an assessment of the national threshold value and the need for national rules of procedure over and above those arising from Norway’s international obligations. Experience of the legislation in the municipal sector and in Norwegian companies will be important in this work.

Norway has gained acceptance for continued support for business development in the form of regional investment aid and differentiated employers’ national insurance contributions in areas of low population density and population decline. EU legislation is revised periodically. The Government will seek to participate in formal and informal arenas to discuss and obtain information on developments in this field.

The Government will also make use of Nordic arenas for discussion and will seek to cooperate with countries that are facing similar challenges as regards rural and regional policy. Experience has shown that cooperation at Nordic level is important for making views heard and for obtaining information in the EU.

The Government will also promote training and development in rural districts and regions through participation in regional development programmes together with EU member states. Through the INTERREG programmes, which support interregional cooperation across Europe, Norwegian participants have gained new inspiration and ideas for solutions to concrete issues, in areas ranging from business development to environmental problems. This cooperation has also enabled the Norwegian municipal sector, the research and consultancy community, private companies and public institutions to expand their networks, acquire knowledge on different approaches to regional development and achieve better results than they could have done working alone.

3.2.6 Market access for Norwegian seafood

Norway and the EU are partners in the management of living marine resources, and are mutually dependent on one another as regards the management of common stocks. Norway is the EU’s most important supplier of seafood and the EU is Norway’s most important market for the export of seafood. Some 60 % by value of Norwegian seafood exports go to the EU, and Norway is the country that supplies the largest share of seafood imports to the EU (20 %). Norway alone has a total annual catch of approximately 2.5 million tonnes, whereas the total annual catch for all the 27 EU member states combined is no more than around 5 million tonnes (figures for 2011 from Eurostat).

Norway is one of the world’s leading fisheries nations, and Norwegian fisheries and aquaculture management are highly respected in EU institutions. Norway is therefore an important partner for the EU when it comes to addressing common challenges and promoting common interests within marine resource management. Norway’s cooperation with the EU in this area is based on a common approach to some of the major issues relating to the sustainable management of living marine resources. It is in the interests of both parties to maintain and further develop this cooperation.

Market access for Norwegian seafood in the EU is not satisfactory and over time a complex system of over 50 bilateral tariff quotas has developed, while at the same time the EU has retained customs duties on important fish species. The EU has introduced restrictions on the import of Norwegian fish on several occasions. The Norwegian authorities will continue to work to improve market access for Norwegian seafood in the EU.

3.3 The Nordic countries and Europe

There are many examples of how Nordic cooperation has contributed to wider European cooperation and put its imprint on policy developments in Europe. This is particularly evident in areas such as social and health issues, gender equality, the working environment, environmental protection, electricity supply and transparency and access to information.

The Government gives priority to strengthening the contacts and information exchange on the EU and European issues that takes place under the Nordic cooperation in a wide range of areas. The Government is seeking to maintain close Nordic cooperation on important European issues and will make active use of bilateral ties and networks. Norway has enjoyed particularly fruitful cooperation with the EU Presidency when it has been held by a Nordic country, most recently by Denmark in the first half of 2012. It is important that issues that are to be dealt with in the EU and EEA and that have relevance for all the Nordic countries are discussed in a Nordic context at an early stage. Nordic cooperation enables Norway to follow legislative developments in the EU more closely than would otherwise be possible. Much of this cooperation focuses on what the Nordic countries can contribute to the development of EU legislation in terms of input and expert documentation, as well as on supporting work on global conventions. At the same time it is also important to be informed at an early stage of cases where the Nordic countries do not have common interests.

Norway chose the welfare state in a Nordic perspective as the main focus area for its presidency of the Nordic Council of Ministers in 2012. This theme was chosen against the backdrop of the current situation in Europe, including the continuing impact of the financial crisis, the debt crisis and the economic, social and political challenges the EU and a number of EU member states are facing. The economic situation in Europe and its consequences have also affected the Nordic countries. The Nordic countries can bring experience and examples of political solutions reached across national borders to the EU cooperation as concrete contributions to policy development in Europe. Thus, policy development in the Nordic countries and Europe are closely intertwined in a process where dialogue and exchange of experience are crucial.

In the Government’s view, the Nordic countries are well placed to become a pioneer region within Europe, particularly in the field of green growth, i.e. economic growth and development within safe ecological limits. During its Presidency of the Nordic Council of Ministers the Government will also focus on the links between education, research and innovation, green growth and sustainable health and welfare systems.

In certain areas the Nordic countries should seek to develop models of cooperation and solutions that can later be implemented in the EU and the EEA. The Nordic countries deregulated their electricity markets long before the other European countries, for example, and have established the Nordic electricity exchange Nord Pool Spot. Institutionalised Nordic cooperation under the Nordic Council of Ministers has also proved effective in various areas. It is perhaps particularly beneficial for small countries to develop meeting places such as these to establish close contact and learn more about each other and about other groups. This could also have a positive impact on our cooperation with the EU and EEA.

Border barriers and mobility

The removal of border barriers between the Nordic countries is a key area of cooperation under the Nordic Council of Ministers. The free movement of labour, goods and services is essential for the development of a well-functioning internal market. One of the priorities of the Norwegian presidency in 2012 is the removal of existing border barriers and the prevention of new ones. Efforts are underway to draw up an overview of existing border barriers and ensure that new barriers are not created as a result of new EU legislation.

The Nordic countries, the international community and Europe

Due to the close Nordic cooperation in international forums and processes, our Nordic neighbours are also close partners in an EU context. Close Nordic cooperation on international and security policy issues, for example in the UN, is an important supplement to the cooperation that takes place between Norway and the EU within the framework of the EU Common Foreign and Security Policy. The further development of cooperation between NATO and its partner countries, including in Afghanistan, Libya and towards Syria and other Arab Spring countries, offers opportunities for a Nordic approach to European cooperation. The involvement of the Nordic countries in peace and reconciliation efforts, for example in Myanmar, is another important contribution to European foreign and security policy cooperation.

The Nordic countries have particular advantages in that they have developed stable democratic institutions and promoted human rights, in particular women’s rights, over the course of many years. Many countries are therefore seeking to learn from their experience. The Nordic countries have a common message, share the same values and employ similar policy instruments, and as a result reinforce each other’s positions.

The Government will present a White Paper on Nordic cooperation in autumn 2012.

3.4 Summary of actions the Government intends to take

The Government will:

  • Promote the development of a well-functioning internal market that ensures good framework conditions for Norwegian companies, value creation and welfare. In this work emphasis is placed on maintaining close dialogue with stakeholders in Norway.

  • Make use of the opportunities and available options provided by the EEA Agreement when implementing EEA legislation in Norway, so as to promote the development of a well-functioning internal market and safeguard the Norwegian model of labour relations, the needs of Norwegian companies and Norwegian value creation.

  • Ensure that the Norwegian model of labour relations is maintained. This involves continuing the tripartite cooperation between employers, the trade union movement and the state, safeguarding pay and working conditions in connection with the establishment of companies and the provision of services across national borders, and protecting collective rights, including the right to strike.

  • Cooperate with the EU in the areas of health security and civil protection.

  • Promote the development of well-functioning and predictable energy markets in Europe and safeguard Norwegian interests in connection with the development of EU policy and legislation, particularly that relating to natural gas, electricity, oil and renewable energy. The Government attaches importance to continuing Norway’s energy dialogue with the EU.

  • Continue its close, binding cooperation with the EU on environmental policy. This involves safeguarding Norway’s environmental interests and promoting a sound environmental policy in Europe.

  • Seek to ensure that the EU’s new programmes for 2014–20 are developed in line with Norway’s views and priorities, particularly in the fields of education and research. Norwegian participation in the EU’s new framework programme for research and innovation (Horizon 2020) must be assessed not only in terms of its research and innovation dimension, but also from a societal, business, budgetary and broader foreign policy perspective.

  • Continue to pursue an active regional policy within the framework of the EEA Agreement. It is particularly important that support for business development in the form of regional investment aid and differentiated employers’ national insurance contributions can continue to be provided to areas of low population density and population decline.

  • Work to secure improved market access for Norwegian seafood in the EU market and further develop cooperation on joint management of the marine environment and living marine resources.

  • Promote the development of a sound European regulatory framework for the financial sector as well as strong financial institutions, and thereby reduce the risk of crisis and economic collapse.

  • Seek to maintain close Nordic cooperation on important European issues. The Government considers it important that issues to be dealt with in the EU and EEA and that have relevance for all the Nordic countries are discussed in a Nordic context at an early stage.

  • Further develop the annual work programme for EU/EEA issues so that it becomes a strategic instrument in Norway’s European policy.

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