Agreement on the European Economic Area

SUMMARY OF:

Decision 94/1/EC, ECSC on the conclusion of the agreement on the European Economic Area

SUMMARY

WHAT DOES THE AGREEMENT DO?

It created a zone in which there is free movement of people, services, goods and capital across 31 European countries.
Its stated aim is ‘to promote a continuous and balanced strengthening of trade and economic relations’ between these countries.
It now covers the 28 EU countries (1) and 3 of the 4 European Free Trade Association (EFTA) countries — Iceland, Liechtenstein and Norway.

KEY POINTS

Scope

Besides the 4 ‘freedoms’ (i.e. the free movement of goods, capital, services and persons) and certain aspects of other related policy areas (e.g. education, research, social affairs, consumer protection, company law and the environment), the agreement covers competition and state aid rules.
The agreement guarantees equal rights and obligations within the EU’s single market for citizens, workers and businesses from the 3 EFTA countries. EU citizens, workers and businesses have similar rights and obligations in the 3 EFTA countries.
EU policy areas not covered by the agreement are:
- common agriculture and fisheries policies (although it includes references to trade in fish and farm products);
- customs union;
- trade policy;
- justice and home affairs (although the EEA’s 3 EFTA countries are part of the Schengen agreement — which removed internal border controls between its signatory countries);
- common foreign and security policy;
- direct and indirect taxation;
- economic and monetary union.

Joint bodies

The agreement created several joint EEA bodies which largely mirror EU institutions:

The EEA Joint Committee meets on a regular basis and takes decisions — by consensus - concerning the incorporation of EU legislation into the EEA Agreement. The EU side is represented by the European Commission (the European External Action Service (EEAS) and other departments) and EFTA by the 3 EFTA countries’ ambassadors.
The EEA Council comprises members of the Council of the European Union and the Commission (represented by the EEAS and its other departments), as well as foreign ministers from the EEA’s 3 EFTA countries. It meets twice a year to define the strategic direction of the agreement and guidance for the EEA Joint Committee.
The EEA Consultative Committee is composed of members of the European Economic and Social Committee and members of the EFTA Consultative Committee.
The EEA Joint Parliamentary Committee comprises members of the European Parliament and members of the 3 EFTA countries’ national parliaments. It is not involved in decision-making but monitors and scrutinises EEA-relevant EU policies and decisions.

In addition:

the EFTA Surveillance Authority ensures that Iceland, Liechtenstein and Norway respect their obligations under the EEA Agreement; the European Commission performs a similar role in regard to the EU countries;
the EFTA Court rules on actions brought by the EFTA Surveillance Authority against an EFTA country with regard to the implementation, application or interpretation of EEA rules, as does the Court of Justice of the EU in the case of EU countries.

How does EU legislation become EEA legislation?

EFTA countries are not formally involved in the EU’s lawmaking process. However, they may participate in preparatory work and submit comments.
When the EU adopts legislation, the 3 EFTA countries assess whether the act is EEA-relevant. If all 3 countries conclude that it is, a draft Joint Committee Decision (JCD) is prepared by the EFTA Secretariat with a view to amending the EEA agreement.
The draft JCD is then adopted by the Commission or, if it contains substantial changes, is sent to the Council for adoption.
The EFTA Secretariat and the EEAS then consult on the timing of the decision’s adoption in the EEA Joint Committee.

Participation in EU programmes and agencies

The 3 EFTA countries participate in a wide range of EU programmes and agencies. When this participation is agreed, the programme in question is incorporated into the EEA agreement and the countries commit to contributing to operating costs.

Financial aspects

Under the agreement, the EFTA members contribute towards reducing economic and social disparities between EEA regions — 16 EU countries currently benefit. These EEA grants are jointly financed by Iceland, Liechtenstein and Norway, each contributing according to their size and wealth.

In addition to the 3 EFTA countries’ contributions to EU programme operating costs, they pay towards the Commission’s administrative costs (e.g. office space, meetings, etc.).

BACKGROUND

The EEA agreement was signed in 1992 between the then 12 EU countries and 6 EFTA countries: Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland, although Switzerland later chose to reject the agreement. It entered into force in 1994. In 1995, 3 of the EFTA countries (Austria, Finland and Sweden) joined the EU. The agreement has been progressively adapted to take account of the accession of 10 countries to EU membership in 2004, of a further 2 in 2007, and lastly, of Croatia in 2013.

For more information, see:

EU relations with European Economic Area (EEA) on the EU External Action Service’s website
European Economic Area on EFTA’s website

ACT

Decision 94/1/EC, ECSC of the Council and the Commission of 13 December 1993 on the conclusion of the Agreement on the European Economic Area between the European Communities, their Member States and the Republic of Austria, the Republic of Finland, the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Kingdom of Sweden and the Swiss Confederation (OJ L 1, 3.1.1994, p. 1)

Agreement on the European Economic Area — Final Act — Joint Declarations - Declarations by the Governments of the Member States of the Community and the EFTA States — Arrangements — Agreed Minutes — Declarations by one or several of the Contracting Parties of the Agreement on the European Economic Area (OJ L 1, 3.1.1994, pp. 3-522)

Successive amendments to the agreement have been incorporated in the basic text. This consolidated version is of documentary value only.

last update 24.05.2016

(1) The United Kingdom withdraws from the European Union and becomes a third country (non-EU country) as of 1 February 2020.

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