Most British politicians have come to accept the outcome of the Brexit referendum, and that the will of the voters must now be carried out in a manner that best upholds Britain’s national interests. Because the EU’s internal market has always been a key priority for the UK, one widely discussed option, which has cross-party support, is the so-called Norway model: membership in the European Economic Area (EEA).

Under the EEA, Norway (along with Iceland) has full, unfettered access to the EU’s single market, including for financial services. But access to the internal market also requires EEA members to accept full freedom of movement not only for goods, services, and capital, but also for workers.

Would the Norway option be better for Britain than full EU membership? A simple thought experiment might help: go back four decades and assume that France had vetoed UK membership in the EU, and that the UK had joined the EEA instead. Under this scenario, the Brexit referendum would have been on whether the UK should remain in the EEA. Would the arguments offered by this hypothetical Leave campaign have been any different?

The real Leave campaign’s arguments focused on three issues: the UK’s contributions to the EU budget, free movement for workers, and national sovereignty. Let’s consider them in turn.

The campaign argued that the money the UK contributes to the EU budget as a member state could be better spent at home. This same argument would apply against EEA membership. In fact, the UK’s financial contribution to the EU is actually smaller, relative to its national income, than Norway’s under the EEA.

The Leave campaign also claimed that free movement of labour heightens the supposed dangers of terrorism and higher unemployment for British workers. But the provisions governing labour mobility in the EU apply to Norway and all EEA countries as well. To the extent that freedom of movement was the key reason for leaving the EU, the Norway model would be equally unacceptable.

This brings us to the Leave campaign’s third argument and central theme: ‘getting back control’ of the rules and regulations governing Britain’s economy. This objective would be an even stronger argument against EEA membership than it was against EU membership. Under the EEA, the UK would still have to abide by the rules and regulations set in Brussels, but it would have far less say in their creation than it does as an EU member.

In fact, within the EU, Britain had considerable influence over financial services, the most important industry in its economy.

“Getting back control” was also directed against the EU Court of Justice in Luxembourg, whose judgments, by convention, have precedence over judgments by national courts. But the EEA also has its own court, whose judgments are binding on EEA member states. In short, all the arguments against EU membership also apply, often with even more force, against EEA membership.

Still, some countries do choose this option. The Norwegians have consistently preferred to remain in the EEA, and have voted more than once, by large majorities, against joining the EU.

Denmark has been a similar case since 1992, when Danish voters rejected eurozone membership under the Maastricht Treaty. Now, the Danish krone is so tightly linked to the euro that Denmark’s central bank has effectively lost its independence. By joining the euro, Denmark would at least have gained a seat at the table. The Swiss rejected even EEA membership in a referendum; however, to do business with the EU on the level it wanted, the Swiss government later had to accept most of the EEA rules anyway, including the free movement of people and contributions to the EU budget.

As these real-world examples show, no country that wants to benefit from the European project has been able to have its cake and eat it. Open borders and economic integration require common rules.

A “spaghetti bowl” of different à la carte arrangements would not work for a continent of more than 30 small and medium-size countries and more than 500 million people. The EU provides this set of common rules, buttressed by common institutions that give every country, even the smallest, a say.

This is the balancing act of sovereignty in Europe: Each state remains formally sovereign, but if it wants to prosper economically, it must accept the common norms and regulations that enable Europe’s intensive cross-border division of labour. Of course, Europe is more than just a free-trade area; it is also a hub of shared social and cultural life. This is why freedom of movement is so appealing, not only from an economic point of view.

Some smaller countries have abdicated their role in influencing Europe’s future. But it is surprising to see a country with such a long history of global leadership as Britain suddenly withdrawing into itself. Having abandoned its historical role in shaping Europe’s future, will the UK really be content to remain on the sidelines?

Daniel Gros is director of the Center for European Policy Studies.

Norway’s property boom doesn’t look like ending any time soon. According to Real Estate Norway, average prices have increased by 7.3 percent over the past year – and as much as 13.4 percent in the capital Oslo. The association has lifted its previous predictions by a twofold and now expects nationwide prices to end 7-8 percent up in 2016.

And while the economy of western Europe’s largest petroleum producer has benefited from a partial rebound in oil prices, continental uncertainty fueled by British plans to leave the European Union suggests rates may remain at their record low for at least another year.

That all sounds like good news for Norway’s numerous mortgage owners. But with the economy so reliant on the price of crude, what about warnings from the International Monetary Fund that “a persistent low oil price could trigger a sharp correction in house prices”?

In fact, the Norwegian housing market was already predicted to burst in 2012 by the American economist Robert Schiller. Four years later, there’s little sign of weariness. Even the oil plunge of late 2014 failed to break the market, as the above chart shows. The most recent downturn in the price of oil “has not been reflected at all in house prices,” Marius Gonsholt Grov, an economist at Handelsbanken, said by phone. “The economy is adapting to sustained lower interest rates. We may therefore have higher debt growth, and stronger growth in house prices over time.”

It helps to have a $860 billion sovereign wealth fund to back the economy and support the labor market. In the meantime, Oslo has gained renewed popularity among its Nordic siblings, revamping its architecture and art scene and reshaping so-called Scandinavian “cool.”

Norwegians love their homes. Nearly 85 per cent of them own the property they live in, usually with the help of a bank. So much so, in fact, that Norway has the highest proportion of mortgages in Europe – 65.6 per cent of the population has a home loan, according to latest available data from Eurostat. This is partly the result of low interest rates, generous tax reliefs for home owners and fierce competition among commercial banks, meaning the property market has made the most of Norwegians enjoying a long spell of easy access to cheap credit.

(BLOOMBERG)

NORWEGIAN PRIME MINISTER ERNA SOLBERG & UNITED NATIONS SPECIAL ENVOY FOR GLOBAL EDUCATION GORDON BROWN TO HOST MEETING OF 25 WORLD LEADERS ON JULY 4TH IN OSLO TO MAP OUT RADICAL NEW DEAL FOR GLOBAL EDUCATION

OUTCOMES OF OSLO MEETING TO BE ANNOUNCED AT 2016 UN GENERAL ASSEMBLY AND PRESENTED TO UN SECRETARY-GENERAL, BAN KI-MOON

A PRESS BRIEFING WITH PRIME MINISTER SOLBERG AND UN SPECIAL ENVOY GORDON BROWN WILL BE HELD IMMEDIATELY PRIOR TO EDUCATION COMMISSION MEETING

Twenty-five world leaders, including five former heads of state, will meet in Oslo on July 4th to consider vital new recommendations for financing global education and to achieve inclusive and equitable quality education for all. 

Taking the lead is the Norwegian Government, which is mobilizing and focusing the international community on reaching the Sustainable Development Goals, in particular those focusing on education, that United Nations Member States have set themselves.

The International Commission on Financing Global Education Opportunity, (the Education Commission), chaired by the former UK Prime Minister and UN Special Envoy, Gordon Brown, and co-convened by the Prime Minister of Norway, Erna Solberg, along with the Presidents of Malawi, Indonesia, Chile and the Director-General of UNESCO, will finalize recommendations ahead of its presentation to UN Secretary-General Ban Ki-moon in September during the General Assembly in New York. The UN Secretary-General will receive the recommendations of the Commission and act upon them.

The work of the Commission is being closely watched around the world, and the leaders gathering in Oslo are acutely aware of the scale of the challenge. Radical shifts in technology, massive urbanization, the global mobility of labor and globalization in trade and services, mass migration, and increases in climate-induced natural disasters will demand new skills and the ability to embrace change — capabilities that only education can provide. As global spending on health has increased since 2008, spending on education has correspondingly declined. The Commissioners believe their recommendations will be crucial in helping to make education the global priority it needs to be.

Ahead of the meeting, Norway’s Prime Minister, Erna Solberg, said: “Reaching all children and young people with quality education may be a daunting challenge, but we can make significant progress if decision-makers step up to the plate, together with teacher unions, international organisations, the private sector, civil society and others. Investing in education means investing in society at large. If we put education first, our global society will reap significant gains in terms of development and prosperity”.

UN Special Envoy for Global Education, Gordon Brown added: “The United Nations and the world’s children are deeply indebted to the Norwegian Government for its commitment to and support of the Education Commission. The Oslo meeting provides the opportunity to agree on a new framework for financing global education helping us better meet the ambitious Sustainable Development Goals for education. The world’s children are looking to us. We cannot fail them.”

The former President of Mexico, Felipe Calderón added: “Education and innovation are key. We must not rely on the highly educated poles of development such as Silicon Valley and Oxford; we need innovation to be widespread and grown locally to address local problems and detect local opportunities. The only way to spark these processes is by supporting education in all corners of our world.”

United Nations Secretary-General Ban Ki-moon has previously commented: “The International Commission on Financing Global Education will offer solutions to mobilizing the resources that are needed. I look to the Commission to provide a roadmap, based on innovative, sustainable and practical solutions, to overcome the barriers to lifelong education and learning for all.”

A number of global leaders serving as Commissioners will be present for the Oslo meeting and could be available for interview. These include: Prime Minister Erna Solberg, Gordon Brown, Sheikha Lubna Al Qasimi, Felipe Calderón, Kristin Clemet, Julia Gillard, Ngozi Okonjo-Iweala, Baela Raza Jamil, Jakaya Kikwete, Ju-Ho Lee, Graça Machel, Strive Masiyiwa, Teopista Birungi Mayanja, Patricio Meller, Kailash Satyarthi, Helle Thorning-Schmidt and Theo Sowa. A full list of Commissioners may be found on the Education Commission’s website: www.educationcommission.org.

Norway is far from enthusiastic about the prospect of the UK remaining a member of the EEA via EFTA.
The reason for this is that only Norway, Iceland, and Liechtenstein have membership in the EEA thanks to the EFTA agreement.

By comparison, the UK is a giant and would most likely run the show, thus reducing Norway’s influence.

Membership of the EEA makes Norway and the other two countries that access the single market via EFTA “three-quarter” members of the EU.

When the Norwegian people said “no” to full membership for the second time, in a referendum in 1994, the EEA agreement was an argument that Eurosceptics used to justify voting “no”.

EEA membership would allow Norwegian businesses access to the European single market without the country having to join the Euro or agree to a closer union.

Neither the Norwegian Parliament nor the government were aware of just how extensive the EEA agreement would become when it came into force in January 1994.

What did Norway sign up to?
Norway agreed to accept all EU legislation regarding the single market, and to accept all future legislation that the EU might adopt for the single market, regardless of what this might be.

Parliament approved this while revoking any Norwegian legislation, regulations, and administrative decisions that might be in breach of the basic principles of the EU Treaty or any EU legislation on the single market.

Norway has effectively renounced the right to adopt national legislation that may be in violation of the single market’s legislation.

In return, Norwegian businesses and people get free access to the European single market.

In Spain, for instance, Norwegian companies compete for contracts on equal terms with Spanish companies. Norwegians can travel to and work in other EEA member states, while citizens of the EEA can travel to and work in Norway.

Since 1994, Norway has had to swallow over 10,000 EU laws. At the library of the University of Oslo’s Faculty of Law, this amounts to more than six metres of shelf space.

The EEA agreement does not come free of charge either.

The three countries support the 15 economically weakest EU member states by way of a membership fee for access to the single market.

In the 2014-2021 agreement period, Norway will pay a total of almost EUR 2.8 billion.

In addition, there is a separate Surveillance Authority and Court of Justice to ensure that the three countries fulfil their obligations under the EEA agreement.

Norway has also acceded to other agreements, including the Schengen Agreement.

Norway is a lobbyist
Although Norway has no voting rights in EU bodies, it does attend certain informal ministerial meetings.

The Norwegian government is, in reality, a lobbyist – in the same vein as Statoil and Shell.

Like all other lobbyists, Norway can provide input before the Commission puts forward its proposals.

If the UK leaves the EU, Norway will lose a political ally in a variety of issues. It will make the task of influencing the EU considerably more difficult.

Theoretically, Norway can say “no” to new legislation if Norway feels it conflicts with its national interests or is irrelevant to the EEA. Until now, this has not happened.

The reason is simple: If Norway, Iceland, or Liechtenstein prohibit the implementation of an EU law, they can be punished.

This means that the EU can revoke entirely unrelated elements of the agreement. For example: Norway threatened to reject the EU directive on additives in baby food, to which the EU responded by threatening to throw Norway out of the agreement on veterinary co-operation. This would be a disaster for Norwegian exports of fish.

Ultimately, Norway always gives in.

Undemocratic, but little resistance
The EEA is undemocratic and not without constitutional problems. Norway has waved goodbye to much of its sovereignty to gain access to the single market.

It would be ironic beyond measure if the British were to end up in the same boat. They voted to leave in order to have more control over their legislation, yet membership of the EEA via EFTA would only serve to reduce this control.

There has been surprisingly little debate in Norway about the agreement.

The reason is that it forms part of Norway’s national compromise on its relationship with the EU. The most recent opinion poll shows that more than 70 per cent of Norwegians are against full membership. Meanwhile, 61 per cent continue to agree with the EEA agreement.

Norway’s National Assembly has put up little resistance.

Although two Norwegian parties are vocal opponents of the agreement – the Centre Party and the Socialist Left Party – both have been in government and administered it. The two parties hold 17 of the Norwegian Parliament’s 169 seats.

How does Norway influence the EU?
There is growing scepticism about the agreement within the Norwegian trade union movement.

The free movement of labour has led to social dumping in some industries, such as construction. It is primarily workers from Eastern Europe who pose this threat.

The Norwegian Confederation of Trade Unions (LO) currently supports the EEA agreement, but this is likely to be a hotly debated topic at its next congress in light of social dumping.

It means that those opposed to EU membership and who are increasingly sceptical of the EEA agreement, will be following Brexit particularly closely.

If the UK gets a good deal, this may turn the tide in Norway.

It may strengthen opposition to the EEA agreement, for such a deal may prove that it is possible for individual countries to negotiate a deal with the EU that is a worthy alternative to membership in the EEA.

Alf Ole Ask is Foreign Affairs Correspondent for Aftenposten and co-author of the book: “EU kontrollen – jakten på det egentlige EU” (in English: “EU control – the pursuit of the true EU”)