Ávarp ráðherra á málþingi í tilefni af 30 ára afmæli EES-samstarfsins

I

Ambassadors, distinguished guests, good morning. 

Allow me to start by thanking the organizers of today´s event – The Icelandic Centre for Research (Rannís); the Delegation of the EU to Iceland; the Ministry of Higher Education, Science, and Innovation; as well as my team in the Ministry for Foreign Affairs, for preparing this seminar and today´s events.  

This is a joyful occasion – 30 years of EEA cooperation.  
In a world where the future of international relations is ever more unstable, uncertain, and unpredictable, it is indeed important to appreciate and safeguard those forms of cooperation that have served us well and are still delivering at full speed.  
The EEA Agreement is a good example.   

For 30 years, the EEA has granted Iceland solid and seamless access to a market of more than 450 million people and 23 million companies in 30 countries.  

Today, Europe is Iceland´s largest export market – and the EEA has contributed significantly to Iceland´s growth and prosperity.  

During this period, the EEA cooperation has been assessed and looked at from different perspectives in Iceland. We have not only assessed the impact of implementing the legal framework in areas covered by the agreement but also the commercial, political and economic aspects of our EEA cooperation. The conclusion of all these assessments is that the EEA Agreement was a game-changer for Icelandic society and that the benefits of joining the agreement are unquestionable.  

Here I’m not only referring to the increase in GDP and households’ disposable income, driven by greatly increased exports. The EEA Agreement has also brought us important reforms in the legal and competitive environment, both for consumers and the industry, as well as numerous opportunities in the field of science, research, development, and education. There are countless examples of rights we enjoy, based on the EEA Agreement, in our our daily lives. 

II  

The EEA cooperation is not only about market access and trade. Various projects funded by the EEA Grants, that we´ll here more about this morning is another important aspects of it. 
Being part of programs such as Horizon, Erasmus+, Creative Europe and many other, has transformed Iceland´s innovation, research, and development, and had positive impact on education, culture, and youth cooperation. 

We make substantial financial contributions to the programs, but we are net gainers in the competition in open bids. The current programme period is no exception where predictions show we are heading for yet another record.   

These great results truly testify to the strength and competitiveness of our entrepreneurial environment, cultural sector and education system, our R&D sector and enterprise.  
Being part of these programs has also greatly strengthened our knowledge and our networks, which has been pivotal to Iceland´s advancement.  

III 

In addition to the benefits which I have briefly described –the broad economic gain of market access and the many advantages of EU program participation – the EEA has also strengthened the individual rights, ranging from health insurance and lower roaming charges while travelling, to the numerous opportunities we enjoy in the EEA area based on the four freedoms.   

But do we perhaps take all of this for granted?  

According to Statistics Iceland, 40% of the population were born after 1994. If we count in those who were children at that time when the EEA Agreement was negotiated, let’s say ten years and younger (which actually includes me…), we can argue that more than half of Icelanders only know Iceland as part of the EEA; as part of the internal market; and as part of an EEA area where Icelanders can travel and study, where they can seek work abroad, settle down and buy a house or start a company.  

My point is that nothing I have mentioned can ever be taken for granted.   

All of it is the result of deliberate policy choices and meticulous implementation.  

IV  

That said, we must of course be thoughtful and critical of how the EU and EEA is developing – even vigilant, if need be.  

For example, debating the changes to the climate legislation and the ETS-system with all its hefty measures to work towards our shared climate goals. While these goals are truly important for our future, we cannot but wonder if the remedies prescribed are realistic, given the current state of technological solutions and the availability of alternative fuels. We will no doubt see rapid advances there, but I do think it’s important to be realistic and sensible. 
We can thus only hope that the legislation creates the right incentives to speed up development and we can facilitate new and necessary renewable power generation. However, if it only levies great costs to our citizens and economies, without meaningful gains for the climate, without being totally realistic, the pendulum could easily swing back. 
And this is a political challenge that I think we have to be very aware of.

V 

Dear guests,  

Anniversaries are also an occasion to look ahead; to gaze into the famous crystal ball and ask: Where are we headed?  

Will the EEA continue to be a solid basis for our trade and cooperation with the EU and its Member States, or will we struggle to maintain the EEA in a rapidly evolving world?   
Is the EEA at thirty perhaps headed for an early mid-life crisis at forty?  

I don´t believe so, and I hope not.  

But today´s EU is not same as the one we signed the EEA Agreement with 30 years ago.  
Since 1994, the number of EU member states has more than doubled, it has grown from 12 to 27, not forgetting that the UK has left the Union.  

New policy areas have emerged, many of which impact the EEA. 

And Russia´s illegal war on Ukraine is not only horrible as such, but also a serious attack on international law and on the rules-based international system.   

The political and economic context has shifted considerably over the last 30 years and will continue to evolve.  

As an example, EU enlargement is likley to continue in the coming years.
In 10 years, we might see a European Union of over 30 countries, including Ukraine as a large new member state.  

This will certainly test the inner mechanics of the EU, and perhaps lead to new formats of multi-speed Europe.  

Furthermore, the EU/EEA Single market can be expected to develop further in the coming years. The recent “Letta Report” makes concrete proposals for the strengthening of the Single market, including in financial services, energy, and electronic communication. The report makes the point that Europe needs to quickly respond to changing geopolitical circumstances and that the Single market is a powerful tool in that regard.  

It will be interesting to see if, and how, the EU member states will work with these proposals, and how this will impact on us. We will make sure our voice continues to be heard in that debate, looking out for our interests. 

NATO is obviously the backbone of European security, but current circumstances demand that Europe does more.  

The war in Ukraine has generated allied strength, crucial and must continue until victory and just peace, but it has also revealed several weaknesses. European allies need to continue to strengthen their own defence capabilities and work closer together to address hybrid security risks. 

Economic security is an important part of this. The Covid-pandemic and Russia´s war clearly demonstrated that Europe needs to reduce vulnerabilities and secure its value chains. If not careful, trade dependencies can turn into leverage, to our disadvantage. 

That we do not want to see and we really need to be creative, competetive with a very clear, strategic focus - all of us. 

VI  

Yes, the world is rapidly changing. Pundits have even argued that the peaceful period after the Cold War has come to an end.  

The fall of the Berlin Wall 35 years ago opened avenues for greater cooperation based on human rights, democracy, and the principles of a free market economy.  

This, we believed, would spread prosperity and peace around the world.  

And it did – for a while.  

Today, we are witnessing a war in Europe and elevated migration flows. We see autocracies attempting to undermine the liberal world order and international law. The growing need for economic security seems to outweigh the gains of global trade. This is again worrying and for Iceland with quality of life base don our export good and open economy. 

As I said in the beginning of my speech; we live in a world where dark clouds are amassing.  
In such times, it is essential to have a strong foothold.  

In security and defense, Iceland has such a foothold in our NATO membership and through the bilateral defense agreement with the US, as well as increasingly through Nordic defense and security cooperation.  

In trade and economy, the EEA agreement remains key, securing access to our most important markets, as well as security of supply. Our numerous EFTA free trade agreements, and bilaterally with as different countries as India and the Faroe Islands, continue to be a solid base for our external trade.    

Many of my foreign minister colleagues in other countries would argue that this is an enviable position for a small state, which they would eagerly accept. 

VII 

I sometimes wonder if those who criticize the EEA the loudest, may have lost sight of this bigger picture.  

Some complain about the “avalanche” of EU legal acts adopted in Brussels.  

Well, as a politician I know firsthand that bureaucracies can be quite overwhelming, to put it mildly. I would be the first to support policies that reduce unnecessary restrictions and increase individual freedom. This is a work that we´ve undertaken domesticly but the EU really, really has to do better here as well. This is something that the EU has admitted itself and needs to act on it. 

But at the same time, I am certain that if we had 29 different trade rules and regulations, with all their complications and complexities, the situation would be worse. That‘s the big picture. 
This would also affect trust towards doing business in Iceland as we would no longer be able to say that we have the same trade framework as our partners in the EEA. 
I have yet to meet a businessman or a businesswoman that prefers 29 bilateral trade agreements to one.  

And I have a hard time believing that such a complicated puzzle beats the simplicity of a single market. But again – the single market can‘t be made to bureauocratic. 
Then there are those who seem to want to abandon the EEA cooperation altogether, when legislative acts emerge that may not entirely fit Icelandic circumstances and sometimes not at all.   

Respectfully, I beg to differ. 

Of course there are always issues that need to be monitored, examined, and resolved. But there is no reason for panic.  

If one radiator in this hotel turns cold in the middle of winter, you don´t tear down the whole building; you fix the oven.  

And sometimes I actually compare this to our road system that is being developed, probably too slowly. It‘s not a long time since we had gravel roads all around. For me, the EEA agreement is like a higway compared to the older times when we had gravel roads. 
When you are driving on the highway sometimes you get stones, sometimes they are tiny, sometimes there are many tiny ones and it gets frustrating and you want to push them out and sometimes you get a big one and then you need to take action to actually get it out of the way. 

But you never want to crack down the highway and get the gravel road instead and say: „well now we don´t have any rules and regulations from the EU, we have our own and we have our own gravel road.“ That can never be the right decision for Iceland. To choose to have a clear access to a market of less than 400 thousand compared to having access to a market of 450 million people. 

Fact is that the EEA Agreement is Iceland´s most important trade agreement with our most important markets.  

For 30 years, it has facilitated external trade and strengthened our competitiveness. 
It is also a fact that in recent years we have reinforced our work both in Brussels and in Reykjavik. We are now closely monitoring the EU legislative process to identify issues and proposals that may require active involvement on our behalf.  

Obviously, the EEA cooperation is not beyond criticism; and the EU is far from perfect. And neither are we, for that matter.  

But if we continuously magnify the challenges and downplay the benefits - if we ignore the bigger picture – we risk finding ourselves in a situation where the alleged solution is far worse than the alleged problem. 

My conclusion is therefore: Now is not the time for foreign policy adventurism. 

VIII 

Dear guests,  

It has been said the best way to predict the future is to create it. I think there is considerable truth to that. 

We therefore need to safeguard – and develop – the EEA-Agreement. Our task is to follow closely what is happening on the EU side and within the internal market, with our EEA interests in mind.   

We should continue to consolidate the successes already made and build on them for the future. The access to the internal market remains key to our long-term economic security and continued growth.  

And we should always aim to be active and responsible partners. We have repeatedly shown that we are competitive in European cooperation, both in the market and in the programs.  

This is how we best secure Iceland´s interest. 

Happy 30th birthday – may the cooperation life long and strong. 
I thank you for your attention and wish all of us a useful seminar.