Norway’s financial contribution
Article | Last updated: 02/02/2022 | Ministry of Foreign Affairs
Like the other EEA Efta states, Iceland and Liechtenstein, Norway makes financial contributions to the budgets of those EU programmes and agencies it participates in. Norway and the two other EEA Efta states also provide funding to reduce social and economic disparities in Europe.
Norway does not pay to participate in the European internal market. However, Norway is required to make a financial contribution to participate in EU programmes and agencies and in the Schengen cooperation. In addition, Norway provides funding through the EEA and Norway Grants to reduce social and economic disparities in Europe.
Norway recoups much of its financial contribution to the EU in the form of funding for Norwegian participation in projects under the various EU programmes. At the same time, participation in EU programmes and projects gives Norwegian students, researchers, organisations, institutions and the Norwegian authorities access to valuable knowledge and European networks.
The EEA and Norway Grants
Since 1994, the EEA Efta states, Norway, Iceland and Liechtenstein, have provided funding to reduce social and economic disparities in Europe under the EEA Agreement. The EEA Efta states do not contribute directly to the EU budget, but have established a separate financial mechanism, the EEA and Norway Grants, which is administered in cooperation with the beneficiary countries.
Funding under the Grants scheme is channelled directly to programmes, funds and individual projects in the least prosperous countries in the EEA. In addition to reducing social and economic disparities, one of the main objectives is to strengthen bilateral cooperation between Norway and the beneficiary countries.
A total of EUR 2.8 billion in funding was provided under the EEA and Norway Grants during the period 2014–2021. Norway provided approximately 97 % of this funding; the remainder came from Iceland and Liechtenstein. This means that Norway’s average annual allocation in the period 2014–2021 was roughly EUR 391 million. The annual amount varies greatly as the disbursement of funds for projects carried out under the Grants depends on progress in their implementation.
Participation in EU programmes
In the period 2021–2027, Norway will participate in a range of EU programmes. Some of the largest and best-known of these are Horizon Europe (the framework programme for research and innovation), Erasmus+ (the programme for education, training, youth and sport), and the EU Space Programme.
Norway contributes to the annual budgets of the programmes it chooses to participate in. While the participation of EU member states in EU programmes and agencies is covered under the EU budget, the contributions of Norway and the other EEA Efta states are usually calculated according to the proportionality factor as defined in the EEA Agreement. The proportionality factor for each of the EEA Efta states is based on the relative size of their GDP compared to the total GDP of all 27 EU member states. For 2022, the proportionality factor for Norway has been calculated to be 2.33 %.
In addition, Norway participates in various programmes under Interreg, the EU’s programme for enhancing cross-border social and economic cohesion through regional cooperation. Norwegian participation in Interreg programmes is funded under the Ministry of Local Government and Regional Development’s budget and by contributions from county, municipal and private stakeholders participating in the projects.
Participation in EU cooperation on justice and home affairs
Norway participates in key aspects of EU cooperation in the area of justice and home affairs. The Schengen cooperation is the most important in this context. Under the Schengen cooperation, Norway participates in several EU agencies, including Frontex, the European Border and Coast Guard Agency.
How much do EU member states pay to participate in the EU cooperation?
National contributions to the EU budget by EU member states are calculated according to a distribution key that is primarily based on their gross national income (GNI). In addition, part of the revenues member states receive in the form of customs duties and value-added tax are transferred directly to the EU budget.
The EU budget cannot exceed 1.23 % of the total GNI of all the member states. The long-term EU budget for the seven-year period 2021–2027 amounts to a total of EUR 1 074 billion (in 2018 prices). In addition to this, NextGenerationEU, the EUR 750 billion temporary recovery instrument, will offer grants or loans to member states in the period 2021–2024 to help repair the immediate economic and social damage brought about by the coronavirus pandemic.