IAFEI Quarterly - 34th Issue

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Iceland and Liechtenstein, together with the European
Union, formed EEA, the European Economic Area.
Switzerland stays out of the European Economic Area.
Today the European Economic Area encompasses the 28
EU member States plus the 3 countries Norway, Iceland
and Liechtenstein.
The EEA Treaty extends the 4 basic freedoms of the
European Community to all EEA members:
Freedom of movement of services,
Freedom of movement of capital,
Freedom of movement of goods
Freedom of movement of workers
The European Economic Area is an intensified free
trade zone. There are only restricons as to agricultural
goods. The laws within the EEA are to be interpreted in
conformity with the EU legal regulaons.
Praccally speaking, Norway, Iceland and Liechtenstein
have full access and are part of the Internal Market of
the EU. But this is not for free:
Norway, Iceland and Liechtenstein contribute annually
money to the EU – Budget. For the 8 years of 2014 to
2021, an amount of 2.8 bill €. The bulk of it, 2,7 bill €, is
paid by Norway.
By contrast , the annual net financial contribuon by
Britain to the EU, aer deducng payments into Britain
from the many EU incenvaon programs, are at
around 4.9 billion € in 2014. Of this, Britain would have
to pay 83 % under the Norway model, as per a study of
the Brish House of Commons of 2013.
However, an essenal of the Brexit decision is, that
Britain wants to stay out of the European Union´s free
movement of workers regime, that it further wants
to determine alone its immigraon policy ( whether it
wants immigraon at all, and if so, at which terms), and
that it does not want any more to make payments to
the EU.
Such a Brish posion is presently being called “ hard
Brexit ”. So it is therefore doubul, whether the Norway
model can be watered down to comply with the Brish
wishes.
To Switzerland:
A neutral country since centuries. The most compeve
country in the world, as per the Global Compeve
Report 2016 – 2017, of the World Economic Forum. A
country of great economic wealth, of freedom, of the
rule of the law, of order, of direct democracy unmatched
by most other democracies in the world. All of this
achieved without being a member of the European
Union.
Switzerland, did not join the Norway-model, by way of a
referendum in 1992, and did not become a member of
the European Economic Area and not of the European
Union.
Unl 1999, Switzerland has negoated 7 sectorial
treaes with the European Union on:
-the freedom of movement of persons and workers
-the removal of technical trade tariffs
-the public government procurement purchasing
schemes
-research and technical cooperaon
-trade with agricultural products
-land traffic
-air traffic
This first package of treaes was completed by a second
round of treaes unl 2004, relang to the food industry,
tourism, taxing of interest, as well as polical areas such
as security, fight against fraud, asylum, environment
and culture. But there exists no treaty about financial
services, which is a fundamental business field of
Switzerland. And which it likewise is also for Britain.
And Switzerland has no vote or veto over the creaon of
EU rules and regulaons.
Recently, all Swiss Treaes with the EU have a new
queson mark, as the Swiss by another referendum
have decided to curtail mass immigraon, which must
be put in place by February 2017, and which may also
have an impact on the present free movement of
workers between Switzerland and the EU. Switzerland
wishes to find a peaceful negoaon soluon with the
EU. Any offer by the EU to Switzerland of compromise
as to the free movement of workers with the EU, if any
by the EU, will then be called for by Britain as well.
Also Switzerland is paying for its access to the internal
market of the EU. But because of the complexity of the
treaes, the total number so far is not made known.
Given that Switzerland
is a not far from twice as large economy as Norway,
it is fair to assume that the payments to the EU are
proporonately larger as well.
An imaginable final outcome
Given the great economic and business interdependence
of Britain and the other 27 member countries of the
European Union, it would not be surprising, and is to
be expected, that, in view of what is at stake, common
sense will prevail, and a fair compromise and co-
habitaon of the two sides will be negoated at the end
of a tedious and burdensome negoaon process. This
in spite of all the noise which orthodox policians will
connue to make on both sides.
Should this then so happen, then one shall speak of a “
so Brexit “.
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