THE EUROPEAN ECONOMIC AREA (EEA)

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1 THE EUROPEAN ECONOMIC AREA (EEA) UNITING 28 STATES IN THE WORLD'S MOST INTEGRATED REGIONAL MARKET REDUCING SOCIAL AND ECONOMIC DISPARITIES IN EUROPE THROUGH THE EEA GRANTS EEA STATES 28 Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden and United Kingdom.

2 WHAT IS THE EEA? The European Economic Area (EEA) unites the 25 European Union (EU) Member States and the three EEA EFTA States Iceland, Liechtenstein and Norway in the Internal Market. Governed by the free movement of goods, services, capital and persons (the four freedoms), while also ensuring equal conditions for competition, public procurement and rules on state aid between the Member States. The EEA Agreement also provides for cooperation in a variety of fields, for example within research and development, education, information technology, social policy, consumer protection, the environment, statistics and company law. In addition to harmonising national legislation, the Agreement also aims to improve efficiency and adds value by opening up for full and equal participation in a large and growing number of EU programmes and agencies. In return, the participating EFTA countries contribute around 130 million euros annually for their involvement in the different programmes. EEA EFTA countries can participate in a wide area of EU programmes: Research and Technological Development Enterprise and Entrepreneurship Environment Education Training and Youth Social Policy Consumer Protection Tourism Culture Energy Employment Information Services Civil Protection Public Health Statistics The EEA Agreement does not cover the following policy areas: Common Agriculture Policy# Common Fishery Policy# Customs Union Common Trade Policy Common Foreign and Security Policy Justice and Home Affairs* Monetary Union (EMU). # although the Agreement contains provisions on various aspects of trade in agricultural and fish products * Iceland and Norway are part of the Schengen cooperation The EEA EFTA States have not transferred any legislative competences to the EEA institutions and all decisions on the EEA EFTA side are therefore taken by unanimity.

3 THE EEA EFTA STATES In addition to the Member States of the EU, the EEA comprises Iceland, Liechtenstein and Norway, leaders in various economic sectors such as the energy sector, fisheries, machinery, financial and maritime services. Norway is one of the biggest oil and gas producers in the world, and has world-class expertise in industries such as aquaculture, aluminium production, forest industry, shipping, hydropower, telecommunications and biotechnology. Norway was the EU's 6th most important trading partner in 2003, after the United States, China, Switzerland, Russia and Japan. Iceland and Norway are leaders in fish production and maritime transport. Apart from being among world leaders in fisheries, aluminium production and utilisation of hydro- and geothermal power, Icelandic entrepreneurs in the fields of pharmaceuticals, prosthetics, IT and biotechnology have in recent year acquired international recognition. Liechtenstein is an internationally renowned financial centre and host to major companies and multinationals, in addition to being a major outward investor. Key Figures 2003 Name Iceland Liechtenstein Norway Language Icelandic German Norwegian Capital Reykjavik Vaduz Oslo Area (per km 2 ) Population Currency Icelandic Krona (ISK) Swiss Franc (CHF) Norwegian Krone (NOK) GDP (in bill USD) (1) GDP per capita (USD) (2) Exports (in bill USD) (3) Imports (in bill USD) (4) (1) (2) (3) (4) 2001 provisional calculation Due to the extremely high percentage of non-residential workers, a mere calculation of GDP per capita would yield misleading results in a comparison between countries. Only firms which are member of the Liechtenstein Chamber of Commerce and Industry. Excluding tradeflow from/through the customs union partner Switzerland.

4 THE FOUR FREEDOMS FREE MOVEMENT OF GOODS The Internal Market strives to ensure that goods can move freely across the borders of all the 28 countries in the EEA on the basis of equal conditions of competition. Buyers and sellers of industrial goods do not have to pay customs duties when trading in most products. Prior to the Internal Market, there existed many different national technical regulations and standards. Through the mutual recognition and harmonisation of national technical standards, and through the mutual recognition of testing procedures, most technical barriers to trade have been removed. FREE MOVEMENT OF PERSONS EEA EFTA and EU nationals have the right to enter the territory of any EEA Member State in order to work or look for work. Students, pensioners and non-working persons also have a right to move and reside in another EEA State. Each category is governed by specific rules. The right to free movement is complemented and supported by a system for the coordination of social security schemes and a system to ensure the mutual recognition of diplomas. FREE MOVEMENT OF SERVICES The right to provide services in a Member State of the EEA shall not be restricted on the basis of nationality. The free movement of services is closely linked to the free movement of people and the right of establishment. Services also play an important role in many stages of the production of goods. FREE MOVEMENT OF CAPITAL The free movement of capital is essential for the free movement of persons, services and goods. Being able to move capital without incurring unnecessary delays and transaction costs is a prerequisite to the smooth functioning of the Internal Market.

5 THE FOUR FREEDOMS Since the EEA Agreement was negotiated and signed in the early 1990s, its aim has been to promote a continuous and balanced strengthening of trade and economic relations between the EEA Member States, with equal conditions of competition and common rules in the Internal Market. Through the EEA Agreement, the EEA EFTA States incorporate EEA relevant EU laws in their national legislation. This is done by the EEA Joint Committee, made up of representatives of the EEA EFTA States and the European Commission on behalf of the EU. By harmonising and adopting new EEA relevant legislation, the free movement of goods, services, capital and persons within the EEA is ensured. The four freedoms empower you - and some 470 million other citizens of the 28 EEA countries - on certain conditions to move freely throughout the EEA to live, study, work, invest, or set up business.

6 EEA: NEW OPPORTUNITIES AND NEW ARENAS FOR COOPERATION When the European Economic Area (EEA) increased to 28 on 1 May 2004 with the accession of 10 new countries, the three EEA EFTA members, Iceland, Liechtenstein and Norway established the EEA Financial Mechanism. In addition, Norway established a separate Norwegian Financial Mechanism through which it offers a substantial contribution towards cohesion within the enlarged EEA. In total, the two mechanisms are to provide 1.17 billion euros over a five-year period ( ) to projects aimed at reducing social and economic disparities. Break-down of allocations (country-by-country in millions) Poland 559 Hungary 135 Czech Rep. 111 Slovakia 70 Lithuania 67 Latvia 54 Spain 46 Greece 34 Estonia 33 Portugal 31 Slovenia 19 Cyprus 4.5 Malta 3.5 Total 1.17 billion Through the EEA Financial Mechanism, Iceland, Liechtenstein and Norway have made 600 million euros available for projects in 13 EEA member countries. Additionally, Norway has made 567 million euros available to projects in the 10 countries joining the EU as from 1 May 2004 through the Norwegian Financial Mechanism, making close to 1.2 billion euros available for projects in the priority sectors of the financial mechanisms in the period Management costs will be deducted and distribution key may be reviewed.

7 EEA: NEW OPPORTUNITIES AND NEW ARENAS FOR COOPERATION Project proposals can be submitted in a wide range of priority sectors by both the public and private sectors - including non-governmental organisations (NGOs) - operating in the public interest of the beneficiary states: protection of the environment sustainable development conservation of European cultural heritage development of human resources health and childcare The Norwegian Financial Mechanism will also make funding available for: the implementation of legalislation in the field of internal security and border control, such as for Schengen Action Plans, as well as strengthening the judiciary regional policy and cross-border activities the implementation of EU legislation through technical assistance Academic research within the priority sectors of both mechanisms may also be eligible for funding. Special grants for NGOs, technical assistance, schools/scholarships etc. will provide opportunities for co-operation and partnerships between individuals and institutions from the beneficiary states and Iceland, Liechtenstein and Norway. OBJECTIVES Through the two mechanisms, Iceland, Liechtenstein and Norway contribute towards: SOLIDARITY by reducing the social and economic disparities in the newly enlarged EEA OPPORTUNITY by helping new EEA members become fully integrated in the Internal Market COOPERATION by bringing old and new EEA members together and opening new arenas for political and economic relations

8 Find out more For more information, please visit: NORWAY LIECHTENSTEIN ICELAND Published by the Financial Mechanism Office