Cicero Policy Briefer

Issue 19, December 2007

European Country Profiles: Norway

By Chris Jackson

It can seem to some that Norway holds an enviable position when it comes to the European Union (EU): it accrues the economic benefits of membership through its European Economic Area (EEA) status, but without the drain of national sovereignty that EU membership brings.

Norwegian public opinion has swelled and ebbed since the country last voted against EU membership in 1994. Following the rejection of the EU constitution in France and the Netherlands in 2005, public support for EU membership sank lower. The belief in the country at that time rested on the fact that Norway was growing rapidly and had valuable oil resources, meaning that it didn’t wish to be pulled under by the economically tumbling EU. Even the European Commission’s ambassador to Norway in 2004, Gerhard Sabathil, admitted that “there are no economic arguments for Norway to join the EU.”

Things have changed, however, and ironically it is Norway’s economic strength that has caused a recent re-evaluation of its future position in Europe. After a lengthy period of low unemployment combined with labour shortages, wage demands have soared. Inflationary pressures have ensued and with that, interest rates have ascended to combat this problem (interest rates have increased from 1.5 per cent in mid-2005 to a predicted 5 per cent by the end of 2007). The effect of this has seen the Norwegian krone appreciate against the euro at a high level, with a public debate emerging about the merits of Norway adopting the euro regardless of EU membership.

To compound this, exasperation is growing with the ‘fax democracy’ that Norway is subjected to, whereby the European Commission faxes through the latest directives with which the country must comply—without Norway having had the opportunity to give its formal input. Norway must abide by the obligations of EU membership, without having an equivalent participation to its more privileged full-time partners.

Lastly, the perception that the EU was purely a capitalist club is diminishing in Norwegian society and there is a greater appreciation of the EU’s ability to reign in the negative aspects of globalisation and harness its strengths. The growing role of the EU in foreign affairs and its potential role as a counterweight to US foreign policy initiatives makes the option of membership much more enticing than in the past.

So where does this leave Norway and membership of the EU? If it chooses to join the EU, the process would be relatively straightforward as large proportions of the acquis communautaire have already been absorbed as part of its EEA agreement. The difficulty exists in domestic politics, as the Conservatives are the only pro-EU party, with the rest of the political parties not wishing to nail their colours to the mast yet. Furthermore, there is a fear that if the public were to reject EU membership for the third time, the issue will be sunk and the pro-EU membership elements of society left shipwrecked for years to come. Thus, as with UK membership of the euro, it looks like Norway will only apply for full membership when the pro-EU elite can guarantee that the answer will be a ‘yes’. As to when this might be, however, is a rather fishy issue and off the radar for now.

Chris Jackson can be contacted on +44 (0)20 7665 9530 or click here to email.