Opinion / Politics

Is the ‘Norwegian Model’ Still An Option?


Brexit negotations just keep rolling on. We’re all sick of them. Despite Theresa May insisting that Britain must make its own arrangements, the Canadian, Swiss and Norwegian models still act to some as blueprints for a post-Brexit UK. But are they still viable? JON HENLEY and WOLFGANG MÜNCHAU aren’t sure…

Image result for wolfgang munchau     Wolfgang Münchau Associate Editor of The Financial Times

Related image 

The Norwegian option is also the realistic political path for moderates among the former Leave campaigners. It is the only one they may be able to deliver without destroying their divided parties. It is also the best that former Remainers can hope for, many of them are backing the idea of another referendum.

The EEA, of which Norway is a member, has a large number of technical advantages. The first is that it exists. It does not need to be invented. There are draft treaties. It would be the least damaging to the British economy and would minimise the transitional costs of Brexit. No British company would have to leave Europe. No City firm would have to transfer employees to Dublin or Paris. The City of London would keep its EU passport, the ability to do business throughout the Union from London. The Norwegian option – in the EEA but not the EU – is the economically most benign of all. It is economically almost neutral.

And it would also reduce Scotland’s appetite for another independence referendum. That desire could be reduced if the EU made it clear to Scotland, as I expect it will, that if it were independent it would have to apply for membership under Article 49 of the Lisbon Treaty. This means it would not inherit any of Britain’s opt-outs. In particular, Scotland would be expected to join the eurozone.

But, of course, the Norwegian option also has drawbacks. It would compromise several key messages of the Leave campaign. It would not allow Britain to curtail free movement of labour from the EU. The UK would still pay into the EU budget. That mythical £350m a week would not be available to spend on the NHS. The economic impact would be greater. But it is the solution if the priority is to get out of the EU and throw away the key.

Whatever the choice, you could impose a time limit — say, ten years. Towards the end of that period Britain could decide, by referendum or parliamentary vote, whether to continue the arrangement indefinitely, opt out of the EEA and seek a bilateral trade agreement, opt back into full EU membership under Article 49 or back into the EU under another form of an associate membership that might exist by then. For any of this to work, speed matters.

      Jon Henley European Affairs Correspondent for The Guardian

Related image

In principle, EEA-EFTA membership would give Britain access to the single market and to selected EU programmes in exchange for a financial contribution, but without the additional burdens of being a full EU member. The UK could benefit from the aspects of European integration it chooses, but avoid those it dislikes, such as political integration.

But, for its membership of the European single market and the EU programmes and agencies it takes part in (mainly research, education, social policy, culture, criminal justice and home affairs), Norway makes an annual total contribution of about €870m. It does not pay into the central EU budget, but transfers money directly to poorer EU states and contributes to specific programmes.

Norway’s net contribution is difficult to work out because it does not publish figures for its gains from the EU, such as research grants. The group In Facts estimates that Norway and the UK pay about the same per person: about £96 per head. But other analysts have reached different conclusions: Open Europe suggests the UK contribution is €139 per person, compared to Norway’s €107.

If it is indeed willing to make a financial contribution, can agree on the amount, and other EFTA members approve (which is not guaranteed – Norway has expressed misgivings), there is no reason why Britain could not join the EEA through EFTA to obtain preferential single market access.

Doing so, however, would entail accepting EU immigration, which Theresa May has said it is the government’s top priority to curb, and abiding by a large number of EU rules and regulations, which would seem to be at odds with the government’s other key objective of regaining full judicial control for UK courts and judges.

Politically, it may be hard to convince pro-Brexit ministers, MPs and voters that continuing to make payments to the EU (albeit not into the main budget), accepting free movement of people and becoming a law taker rather than a law maker is compatible with the referendum vote.

WOLFGANG MÜNCHAU is an associate editor of The Financial Times. JON HENLEY European Affairs Correspondent for The Guardian.

For the latest Nordic news, follow @FikaOnlineBlog on Twitter.

Sections of this article have also been published in The Financial Times and The Guardian.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s