Ms Mann, Mr Brok, distinguished members of the European Parliament

On the road from the European Communities of the 6 to the European Union of the 25 the prospect of membership has been one of the EU’s main policy tools in dealing with its neighbours. Through this policy tool the European Union, and before that the European Communities, has played a fundamental role in shaping Europe of today. It is clear that the prospect of membership will continue to be a powerful incentive for neighbours for some years to come, but it is equally clear that the EU is nearing the point where it will need a new approach of inclusiveness towards its neighbours.

A European Neighbourhood Policy is therefore timely and much rests on its success. Despite the wide geographical coverage there are several neighbours of the EU, which are, and will continue to be, dealt with separately. Being a little self-centred I would first like to mention the EEA/EFTA countries. Through the EEA Agreement we are already a part of the European family and in most aspects deeply integrated participants in the Internal Market.

Closer political and economic links with the new neighbours will benefit the whole of Europe. Iceland shares the overall objective of the new European Neighbourhood Policy to project stability, prosperity and sustainable development to the whole of Europe.

The EEA/EFTA states are not only full participants in the Internal Market but also integrated partners in the field of Research and Development and close allies in the field of CFSP and ESDP. It is therefore clear that many of the proposed fields of enhanced cooperation with the new neighbours may affect us directly.

The EU has decided to build the European Neighbourhood Policy upon already existing relations with the countries in question. This is in our view a sensible approach.

Allow me however to share with you some thoughts, arising from Iceland’s experience as a long time next door neighbour to the European Union.

First of all it is of utmost importance not to raise hopes in these countries too high unless the EU, and the rest of us, has indeed solid commitments and developed aims underpinned with actions. All of us are acutely aware of the aspirations of many of the new neighbourhood countries and therefore a way must be found that satisfies the wish and need of these countries to feel a part of the European integration process, but at the same time acknowledges and respects their special circumstances. A learning process is necessary and for that a model for the way ahead is needed. May I offer an idea of a model that might serve this purpose, the EFTA model. I am here referring to the EFTA in its early days, laying the foundation of the EFTA countries’ integration into European structures, either through membership of the European Union or the EEA agreement. Do not misunderstand me. I am not suggesting EFTA be a forum for these countries now. For that today’s EFTA is not suited, for this purpose the integration of the EFTA states has gone too far. I am referring to it simply is a useful model or tool.

In looking ahead for our new neighbours we need to remind ourselvers of our first steps, both that of the now European Union, the Coal and Steel Community, and the initial steps of EFTA, that however modest they seem today were difficult for countries, such as Iceland, that was reluctantly adapting to a changing international environment and coming to terms with modernisation. The EFTA served us well in educating us and providing us with the necessary tools to implement and understand the idea of free trade and the need for harmonisation. It took us more than twenty years to realise and implement the necessary reforms needed for the huge leap into the Internal Market in 1994. From experience we know that the necessary long term reforms are difficult, often claiming sacrifices not fully understood or accepted by all at the time. If such a model as EFTA be applied the initiative must of course come from the countries in question but in my view there could be added value in more cooperation between the new neighbours in all aspects of furthering economic integration with the European Union.

Clear is, that Iceland, as other EFTA states, has an interest in EU’s policy towards its neighbours. One of the main building blocks of the European Neighbourhood Policy is the set of existing agreements with the countries in question on trade facilitation. We have always followed these developments closely since they do affect us directly. An example of this are the free trade agreements the EU and subsequently EFTA made with countries of Central and Eastern Europe, the then neighbours - the soon to become members. Through these activities the EFTA states have been able to complement similar efforts by the EU and thereby participate in the economic reshaping of Europe.

The EFTA ministers decided already in 1995 that these efforts could be extended beyond the immediate confines of Europe. At that time the incentive was the Barcelona process and we do already have in place Free Trade Agreements with some of the Mediterranean states and are in the process of negotiating others. On the eastern front we have already signed a declaration on cooperation with Ukraine. EFTA is also running a technical assistance programme focusing on joint EFTA-EU programmes and trade-policy projects, as well as on the EFTA scholarship programme. I foresee that we will continue all of these efforts and thereby continue to be an active, albeit small, partner of the EU in providing support and incentives for economic development in the whole of the Wider Europe area.

Furthermore, through Iceland’s and Norway’s work with the other Nordic countries in the Nordic Council, in close cooperation with prospective members, the Baltic States, we have been directly involved and participated in projects in the new neighbourhood of the EU. The same is true for the work and projects undertaken under the auspices of the Council of the Baltic Sea States, the Barents-Euro-Arctic Council and the Arctic Council, which we now chair. The work in these fora add value, I hope, to the work underway through the channels of the European Union, and it underlines the fact that we all have a role to play as well as vested interest in furthering positive progress in these areas.

Political, humanitarian and security matters are important issues as well. Our focus on these matters has mainly been through the international organisations active in the area. We can fully agree with the EU that there is interdependency between progress in these matters and economic progression. The EU can and should be a major actor in the area. I would however urge the Union to avoid duplicating efforts already underway. We already have various well-established tools to monitor progress in particular fields, both under the auspices of the Council of Europe and of the OSCE. I underline the need that the EU make use of these existing structures rather than inventing and implementing new ones.

Action plans for the individual countries Neighbourhood Policy are currently being worked on by the Commission and the countries in question. Much will depend on the formulation of these action plans and the way they will be received. The action plans and the strategy paper of the Commission that is expected in May will determine the immediate future of the Policy and we look forward to seeing those.

Distinguished Parliamentarians,

The importance of facilitating economic, political and humanitarian development in the countries falling within the scope of the new European Neighbourhood Policy can hardly be overstated. Those of us Europeans who have been blessed with progress and stability in the past decades have obligations and responsibilities towards our neighbours. History has taught us that one of the best ways to safeguard our own democracy, prosperity and stability is to try to project these fragile privileges to the greatest extent possible to our immediate neighbours.