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Speech: 25 Years Safeguarding the EEA Agreement

25.6.2019

 ESA President Bente Angell-Hansen's speech at the EFTA Ministerial meeting, 23 - 25 June 2019.

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Your Excellencies, Ladies and Gentlemen,

This year has already seen a number of events marking the 25th anniversary of the functioning of the EEA Agreement and of its institutions. We at ESA have normally been accustomed to take more pride in the work we do behind the scenes than to seek the limelight. But we by all means welcome the attention at the moment, not least because it furthers the wider understanding of what we do, and why, as well as the mutual bonds between the EU and EFTA pillars.

For that reason alone, I would like to thank you, the Ministers, and your Governments, for your unambiguous support of our work. We are grateful that you have been making the case for the many benefits of the EEA Agreement and that you have not shied away from also explaining the more complicated, I dare say the more contentious, aspects of the Agreement.

Your speeches and contributions at events like the celebration on 20th May hosted by the EFTA Secretariat have been warmly received in Brussels. The same goes for the inspiring messages addressed by all three Prime Ministers of the EEA EFTA States to the Spring Conference hosted jointly by the EFTA Court and ESA on 14th June. This was an invigorating and thought-provoking event bringing together the whole of the EEA EFTA family, as well as key stakeholders from the EU, in the biggest ever conference of this kind. Although organised on an invitation-only basis to keep numbers in check, the conference was substantially oversubscribed and on our reckoning saw up to 400 persons pack out the venue at peak times. Stakeholders from all perspectives – civil society, trade unions, business associations, academics and diplomats – were unanimous in their insistence on the need for strong multilateral cooperation.

It is important that these basic messages continue to be repeated also to the wider public at home. The EEA and its institutions have become a symbol, a standard-bearer for multilateralism. The EEA Agreement is often described as one of the most important international agreements which our countries are parties to. It is certainly one of the most visible ones. That unfortunately also makes it an easy target and scapegoat whenever cheap points need to be scored.

We at ESA will continue to do our best to set the record straight when our work is described in a manner that has no basis in facts. We note how difficult it is to correct disinformation that undermines trust in ESA. In the age of social media, all news travels fast and we are doing our outmost to get the correct facts out there. Needless to say, we welcome a debate about our work and about the EEA Agreement.

Multilateralism and the Shared Values underpinning it

On a more global level there are an increasing number of reasons in our times to reinforce multilateralism as such. You have repeatedly recognised the signs of these times. We were going to have Brexit day this year; now it looks like the whole year is turning into a Brexit year, with no end in sight. The European Parliamentary elections returned a more splintered Parliament – fortunately with a strong democratic core. The often lively debates in our countries concerning social and economic cooperation in various fields demonstrate the need for diplomacy, for openness, and for more information about the tangible benefits involved.

Multilateralism is a necessity in a globalised and interdependent world. For multilateralism to function, it needs to be based on shared values. Within Europe, we have been very fortunate in this regard. If there is one basic value underpinning all of the EEA, it is equality. It is a commitment that, in Europe, we do not discriminate. A commitment to a level playing field. To equal treatment. It is also a belief that we all have something to learn from each other and to gain from working together.

This has so far always gone without saying, but is – unfortunately – probably worth emphasising now: equality extends also, and in particular, to equality before the law. The rule of law underpins, alongside fundamental rights and democracy, the EEA as a whole and is a precondition for, and the basis of, all the economic and social rights and freedoms enshrined in the Agreement. This is a point that was eloquently made by the Foreign Ministers at the 20th May event in Brussels.

I am happy to say that ESA is also making use of the tools at its disposal to emphasise the fundamental nature of the rule of law in the context of our work. We have thus been closely following the increasing number of cases pending in front of the Court of Justice of the EU in Luxembourg raising concerns regarding the rule of law in some EU Member States. In a few of these, we are making use of our prerogatives under the EEA Agreement and participating in the proceedings.

The arguments we put forward are hardly surprising but they are nevertheless important to articulate. This is an area where we feel that it is above all necessary to stand up and be counted alongside the European Commission and EU Member States in affirming the centrality of fundamental values. To make the point that they are at the foundation not only of the EU, but of the whole of the EEA. And not least to inject the relevant case law and thinking of the EFTA Court into these proceedings in front of the EU courts.

Cooperation is the institutional life-blood of the EEA Agreement

Equality is a basic feature also of the institutional setup of the EEA. The EEA Agreement was conceived as an agreement between equals, and it is important that it be lived as such. The Constitutional traditions of the EEA EFTA States contain important principles and caveats regarding the demarcation of powers within the EEA Agreement which we at ESA are very mindful of. The mechanisms in play are often highly technical due to the need to achieve a careful balance of interests, and they may thus often be difficult to explain. We very much welcome in this context the recent publication by the EFTA Secretariat of the so-called “Two-Pillar Note”.

The intricate nature of the institutional arrangements necessitated by the structure of the EEA Agreement makes a good and open cooperation with the European Commission all the more important. This day-to-day cooperation is crucial in ensuring that the objective of a level playing field of the Agreement is met, which requires ESA not only to ensure compliance with the Agreement within the EFTA pillar, but also to monitor its application in the EU pillar. Cooperation with the Commission helps shape how the Agreement operates in practice to the needs of the people and businesses in our countries.

A great deal of shaping work is done by your Governments through the civil servants and officials in the competent Ministries and the EFTA Secretariat, shaping the broad policy goals and the content of the concrete rules set in the EU's legislative process, as well as in incorporating them – where appropriate with adaptation texts – into the EEA Agreement.

But once those policy goals and rules have been agreed, that is in many ways not the end, but the beginning of the story. That is when the work starts to give life to the policy objectives and to see how the rules can be made to work in practice as intended. The proof of the pudding is in the eating.

Having the required expertise and capacities is not only a challenge for ESA in new areas of competence, but increasingly so in established fields where the complexity and sophistication of issues has steadily increased. This is often unnoticed by the outside and clearly underreported in our annual reports. Pure infringement statistics do not reflect such challenges. ESA's focus on early engagement and constructive dialogue with the EFTA States, on which we spend a lot of time and resources, are not reflected in these statistics either, just because they often dispense with the need to resort to formal infringement proceedings. This is ultimately good for all parties involved, but comes at a cost.

Increased importance of so-called “Management Tasks” for ESA

This has traditionally been the core of ESA's work, as you all know. What you may not be aware of is that, increasingly, ESA's day-to-day work is concerned with what we internally refer to as – and I am not very happy about the term as it does not fully capture its scope – “management tasks”. This means in fact executing certain duties under the EEA Agreement. Many of these are part of the more recent structural changes in the Agreement, for example in the field of Financial Supervision and the role of EU Agencies more broadly. They are increasingly often triggered by exception or exemption requests made by the EFTA States. Recent work intensive examples include additional guarantees for Iceland for poultry imports or exemption from procurement rules for bus services in Norway.

This work, in contrast to traditional complaints handling and the still highly important enforcement duties, may not always be visible to the outside. It may come as a surprise to you, but ESA nowadays, in many fields, spends close to half its resources on this type of work.

That is in part of course testimony to the happy fact that cooperation within the EFTA pillar is strong: things are going well and compliance with the EEA Agreement is only rarely something we as ESA have to fight for by taking formal infringement action – a process only used as a measure of last resort.

Part of the reason is also that, with regard to the implementation of legislation, we invest a lot of resources in preventing breaches – with regular reminders and updates where there has been a lack of incorporation. Moreover, in the same context, we have invested significant time and efforts in moving towards a more automated handling of late incorporation and late implementation cases. These efficiency savings have allowed us to re-allocate our limited resources into other areas. It must also be noted that the incorporation of legislation at the national level has been improved, which is reflected in the periodic scoreboards. We have furthermore put considerable efforts in developing a deep and constructive dialogue with the administrations in the EEA EFTA States to anticipate and address issues before they become problems.

But the main reason for the increase in time and resources spent on “management tasks” is the need for ESA to engage with an ever greater number of counterparts on the EU side. Most of the time these counterparts are new agencies, which did not even exist when the EEA Agreement became operational 25 years ago. In particular, recent years have seen an acceleration in this trend. I need only to refer to the three European supervisory authorities in financial matters (EBA, ESMA and EIOPA), the new Data Protection regime with its EDPB, and the third Energy Package and ACER (pending parliamentary approval in Iceland) to give you a flavour of the very diverse and important nature of the tasks involved.

In almost all of these bodies, ‘Board Member' status – usually without the right to vote, but otherwise with full rights of participation – has been conferred on ESA. We take these tasks seriously and are lucky to have highly qualified experts who are on top of these very diverse topics. The importance of being at the table and participating in these discussions is obvious. Moreover, a wider cooperation with these agencies on all levels has turned out to be crucial for ESA to be able to discharge its duties.

This is not just about box-ticking and showing a presence. It is about demonstrating that we are playing our part, and with something to contribute, alongside the key players in the EU and the EFTA States.

And that proper participation in these processes presupposes not just having subject-matter experts to hand, but also giving them the time to prepare and generate valuable input, consulting widely where necessary. When you, the States, give us a task, we proceed on the basis of the premise that “If it is worth doing, it is worth doing well.”

Examples

Let me give you some examples of how this works in practice. How cooperation between ESA and the Commission really represents the life-blood of the EEA Agreement. How it ensures a level playing field and equal conditions in enforcement.

Competition

A particularly potent example of close cooperation is provided for by the field of Competition. The European Commission is in fact in many cases enforcing the EEA competition rules in the EFTA States with ESA's help. When the Commission imposes record fines in the billions of Euros on the likes of Google for anticompetitive conduct, it routinely does so in application of Articles 53 and/or 54 of the EEA Agreement, and those fines also cover the conduct in the EEA EFTA States.

The advantages of buying into the European Commission's enforcement machinery in this regard are as such quite obvious. With its about 1 000 dedicated professionals in the responsible Directorate General, the Commission can bring expertise to bear on these complex data-heavy cases, which would be unfeasible – and also quite undesirable – to replicate. The Commission as a competition enforcer for 31 States also enjoys much greater weight and leverage in terms of deterrence vis à vis large multinational corporations.

At the same time, it goes without saying that ESA must be – and is – closely involved at all of the relevant stages of the decision-making process in these cooperation cases. To the extent that the Commission is also defending the interests of EEA EFTA consumers and market participants, the two-pillar system requires considerable commitment on the part of ESA to follow these cases. ESA is systematically involved in channelling case information from the Commission to the competition authorities in the EFTA States, attending important case meetings and in contributing views on these decisions. That applies not only to anticompetitive conduct cases, but also to the many merger cases with an EEA EFTA element. As you can imagine, accompanying this highly technical work competently takes time and effort.

Food Safety

Another quite different good example of close cooperation consists in ESA's work in Food Safety. Here again we rely on long-standing good cooperation with the European Commission to ensure that the relevant standards are the same high ones from farm to fork throughout the EEA.

This is a relationship of trust and continuous information exchange that we consider crucial for the credibility and effectiveness of the system as a whole. Like all good relationships, it is a relationship that needs to be continuously kept up with and relies on frequent interaction. ESA's Directorate of Internal Market Affairs has in fact just agreed comprehensive administrative arrangements with their counterparts at the Commission to put the good cooperation on a more stable institutional footing.

As you will know, we have teams of auditors within ESA who carry out audit missions in the EEA EFTA States. Perhaps less conspicuously, our mission teams are often accompanied by observers from the Commission to ensure consistency of approach and share best practices. Conversely, ESA auditors assist Commission counterparts on a regular basis in audits in EU Member States, and on occasion in 3rd countries.

Food Safety and the veterinary field is also a good example of an area where ESA has some very extensive expertise to contribute to the joint effort with our EU partners. This is particularly true as for example regards aquaculture, which is of course an important activity in two of your countries.

Paris Climate Agreement Effort Sharing

Let me add an example of an area where the precise contours of ESA's involvement have yet to be defined, namely in relation to the monitoring of emission targets which form part of efforts to prevent dangerous climate change and to drive Europe towards a low-carbon economy. As you know, in this field, it is the States who are responsible for national policies and measures to limit emissions from the sectors covered by Effort Sharing.

It is obvious that this is an area where multilateralism once again comes into its own and where everyone must play their part, working together for the common good. To the extent that ESA has a role to play in these efforts, I want to clearly underline what has been said many times before in different contexts, namely that, where new tasks are envisaged for ESA, it is vital that we be involved, as appropriate, at as early a stage as possible This is to ensure that a coherent and workable legal framework is put in place to allow us to carry out our tasks. My basic message to you is clear: ESA stands ready to do whatever it takes to meet these challenges but we must ensure that we have the necessary powers and resources to play our part.

Priorities, Opportunities and Resources

I hardly need to reiterate the many concrete benefits of the EEA Agreement. The EEA Agreement benefits the people in Iceland, Liechtenstein and Norway irrespective of whether they ever set a foot outside their own country. The EEA does facilitate those who want to travel, study or work in another European country. But it is not just about that; arguably, it is not even primarily about that. A recent study of the Bertelsmann Stiftung regarding the welfare benefits associated with the Single Market in fact found that ordinary households in Norway and Iceland have benefited enormously and rank, respectively, fourth and tenth of the 31 countries surveyed. While no separate figures were compiled regarding Liechtenstein, Switzerland in fact came top, which is quite telling in itself.

Through the EEA, our countries are buying into the world's most advanced regulatory systems and participate in setting standards globally, be it in the digital economy, regarding data privacy, food safety, competition, chemicals regulation or energy.

I have already explained the importance of ESA playing a full institutional role in the cooperation, and the importance of not only being at the table, but being well-prepared rather than just physically present. The opportunities of influencing the diverse processes, of making the EEA's arrangements more workable are manifold.

I hope you will forgive me if I end with a more sober note, already foreshadowed in our advanced budgetary input sent to you earlier this year.

We have highly competent and motivated staff at ESA, and we have worked hard to streamline internal processes and set priorities. Resource pressures have, however, been building over the longer term and have made ESA less able to take time for the many, and increasingly many, important management tasks, which I have described. Over time this is leading to a less tailored and less sensitive application of our surveillance and enforcement efforts. That is a risk that I do not in good conscience want to run because it would risk undermining the trust on which the EEA Agreement is built.

In addition, we still have problems recruiting in particular Norwegian and Liechtenstein nationals. This again hampers us in our ability to present the specific perspectives of these countries in our interactions with the EU side, and makes us less able to tailor our own surveillance efforts. We have been piloting a teleworking scheme since last September to explore whether EEA EFTA nationals can be enticed more easily to Brussels given the possibility of a “long commute”. We have some hopes in this regard, but it is too early to tell at this stage.

It all boils down to the fact that, come the next budget round for 2020, I am afraid ESA will need to ask for additional resources if we are going to continue living up to expectations and delivering on the EEA Agreement. A letter to that effect was forwarded to the EEA EFTA States earlier this year so that our need for additional staffing could be reflected in their preparations for the 2020 budget. This seemed appropriate since our budget process is not synchronized with that of the States.

Bente Angell-Hansen, President at EFTA Surveillance Authority (ESA)




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