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A Norway-style deal is a Euro-sceptic fool’s paradise

Many trenchant eurosceptics cite Norway as the best model for those who question what it would be like for the UK outside of the European Union (EU). With the recent upsurge in support for UKIP it is a good time to debunk many of the myths associated with this key eurosceptic assertion, writes chief political correspondent Tim McNamara.

The country is seen as an economic nirvana that has prospered outside of the EU. With a population of 5.1 million (similar to Scotland), it is also portrayed as a flexible, highly educated, economically successful, modern, tolerant nation because of its decision not to join the EU.  Sceptics argue that Norway is able to trade freely with the EU without any of the bothersome bureaucracy supposedly ‘imposed from Brussels’.

Yet the opposite is true, Norway has to abide by all of the many EU regulations that go to make up the core of the European Union, the single market as well as other EU legislation on subjects such as environment and consumer protection. Not only does it have to follow all such legislation, it has no vote when the legislation is drawn up.

Eurosceptics labour under the misconception that leaving the EU and following the Norway model is a cost-free option. Yet Norway pays in approximately 400 million euros per annum into the EU budget as a contribution to the EU’s  social programmes. Extrapolating from Norway’s contribution based on GDP, the UK would be expected to contribute at least 2.2 billion euros per annum.

Yet like a messy matrimonial divorce. The UK would almost certainly have to pay a far higher figure  than Norway does proportionately if it wanted free access to the EU’s single market.

The country has to follow all decisions of the EU’s European Court of Justice in relation to most EU laws. Norway is also a contented member of the European Convention on Human Rights. Unlike most UKIP and Tory parliamentarians, Norway does not see the European Court of Human Rights (ECHR) as some form of alien legislative organ.

There is no support in Norway to withdraw from the convention and by extension participation in the court. Just like the UK, Norway nominates judges to form part of the judiciary in the ECHR.

The Norwegians play very little part in formulating the EU’s regulations and directives, no Norwegian staff work in the European Commission, there is no Norwegian Commissioner, there are no Norwegian Members of the European Parliament (MEPs),  Norway has no votes in the in the various Council formations, the Norwegian Prime Minister is not invited to the high level meetings of the EU’s political leaders. The country even has to pay the translation costs for the appropriate legislation to be transposed into domestic law

Norway is a prosperous country, but much of this is due to the vast oil and gas reserves that contribute massively to its national gross domestic product. It also benefits greatly from the wise decision to set up a national sovereign wealth fund where many of the royalties from oil and gas where, and still are, invested for the long-term benefit of the population.

Unlike in the UK, where Thatcher’s administration frittered away huge sums of oil royalties on a supposed economic revolution that went towards huge welfare payments to the large numbers of unemployed. It is argued  on the left that Thatcherism was happy to subsidise, in the short to medium term, the huge costs of welfare benefits as a way of disciplining the forces of labour as part of its long term plan to reassert capital’s pre-eminent position in the economy.

Eurosceptics always portray the EU budget as huge. It is in fact about just one per cent of the EU’s gross domestic product. The three biggest parts of the EU budget are regional aid, funding of research & development (R&D) and agricultural subsidies.

As the price of having the benefits flowing from membership of the EU’s single market, Norway has to pay its fair share into the EU budget for the funds to pay for regional aid to the poorest parts of the EU and pay towards the budget for R&D.

As regards agricultural subsidies, the UK would have to construct and administer a subsidy regime to replace the EU’s common agricultural policy (CAP). There may be small sums saved from leaving the CAP, as the policy is (understandably) tilted in favour of its six founding constructors (France, Germany, Italy and the Benelux).

But make no mistake, the National Farmers Union and many Tory supporting rich landowners would ensure that Farmers’ incomes would not suffer and that the disbursement of a UK Treasury largesse would be acceptable as a replacement for the sums given to them under the CAP.

Even the costs of the EU staff (less than 5% of the EU budget) would not be wholly saved as the UK would have to set up civil service departments to replace administration currently carried out at the EU level, e.g. international trade policy,  anti-trust investigations etc. etc.

One other claim by the little Englanders of UKIP and their ilk in the conservative party is that if the UK was like Norway it would be able to control its own borders and (to use their term) be able to stem immigration. Yet this is blatantly not true. As a member of the European Economic Area (EEA), any national of a member country has the right of free movement to any other member country of the EEA.

The EEA is made up of the EU member states plus Norway, Iceland and Liechtenstein. So Poles have as much right to work in Norway as they do in the UK and UK citizens have as much right to live in Norway as they currently do in Spain. In fact immigrants from Poland. Lithuania and Sweden make up 3 out of 4 of the largest immigrant communities in Norway.

Norway is also a member of the EU’s Schengen Agreement, meaning there are no border controls whatsoever for 22 of the EU’s member States and Norway, Liechtenstein and Iceland. The UK is not signed up to the Schengen agreement, so retains its own border controls.

The perverse thing about Norway is that its political, and especially social values, are an anathema to most eurosceptics. The egalitarian values of Norwegian society has meant that the wage difference between the lowest paid worker and the CEO of most companies is much less than in comparable western economies.

The state has large ownership positions in the private sector, the government controls about a third of the stock traded on the Oslo Stock Exchange. When non-publicly traded stocks are included, the state has even higher share in ownership. The welfare system is also extremely generous compared to the UK

Fellow Nordic countries such as Sweden, Finland and Denmark are also flexible, highly educated, economically successful, modern, tolerant (in the main) nations who have prospered inside of the EU. They have not benefited from the riches bestowed by huge oil and gas reserves, but they have benefited greatly from the economic advantages of the EU’s single market.

The idea that the UK would benefit if it would follow the example of Norway and become a semi-detached member of the EU through being a member of the European Economic Area is just not plausible.

One can honestly argue the merits and demerits of the UK’s continuing membership of the European Union but citing the example of Norway as a real alternative is foolish in the extreme.

 

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