Freedom of Movement between EEA (European Economic Area) states and the EU

A helpful summary by Robert Oulds of the restrictions on free movement of people which EEA states outside the EU can apply

Membership of the European Economic Area Agreement outside the EU includes the principle of free movement of labour but does allow EEA states in practice to place restrictions on immigration from EU states.

It is possible to impose restrictions on immigration (from EU and other EEA countries) whilst remaining in the EEA. Liechtenstein, an EEA member with less potential influence than Britain, continues to use clauses in the EEA agreement to restrict the movement of persons. Article 112(1) of the EEA Agreement reads “If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113” The restrictions used by Liechtenstein are further reinforced by Protocol 15 (Article 5-7) of the EEA Agreement. This allows Liechtenstein to keep specific restrictions on the free movement of people. These have been kept in place by what is known as the EEA Council (1) .

There will also be greater latitude to restrict non-British EU citizens’ access to benefits and to deny residency to those who are deemed not to have sufficient resources to support themselves. The current debate in Britain on immigration largely ignores the role of the European Court of Human Rights and the European Convention. Article 3 of the Convention (inhuman or degrading treatment or punishment) and Article 8 (private and family life, his home and his correspondence) would also be relevant to the issue of immigration. These two articles are often taken together , especially in cases of repatriation.

EEA/EFTA states are outside the provisions of Article 6 of the EU’s Treaty on European Union which states: 2. The Union shall accede to to to the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union’s law..

There is already a great deal of flexibility in the EEA agreement. This goes beyond the ability to restrict immigration an opt-out of areas of EEA rules. Iceland even unilaterally imposed capital controls after its financial crash of 2008. This is permitted within the EEA safeguards. Article 112.(2). There is also no enforcement mechanism to prevent this from happening even if such flexibility was not contained within the EEA. Whilst this paper does not advocate such a policy it shows that some restriction on the free movement of people can be implemented.

The EEA rule relating to freedom of movement, Directive 2004/38 has qualifications, conditions and limitation. Persons exercising their right of residence should not however become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore the right of EU citizens and their family members for periods of residence no longer than three months should be the subject of conditions. For periods of residence longer than three months. Member states should have the possibility to require EU citizens to register with the competent authorities in the place of residence, attested by a registration certificate issued to that effect.

The treaty allows restrictions to be placed on the right of free movement and residence on the grounds of public policy, public security or public health. Article 7. 1b(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host member state during their period of residence and have comprehensive sickness insurance cover in the host member state. (3) No right is absolute and neither is freedom of movement within the EEA nations after they have assessed the relevant legislation and applied it according to their own interpretation of what freedom of movement means.


(1) EEA Council Decision No 1/95 . Official Journal of the European Communities, 20 April 1995, pages
L 86/58 and 86/80 .

(2) Official Journal of the European Communities , 3 January 1994, pages L/28, 176-8 and 562

(3) Directive 2004/38/EC of the European Parliament and Council of 29 April 2004.

Cameron is using Norway to make the Leave campaigns look risky

By Jonathan Lindsell of Civitas

During last week’s Prime Minister’s Questions and again at the Northern Future Forum in Reykjavik, David Cameron attacked the Brexit model known as the ‘Norway option’. This involves leaving the EU but joining the European Economic Area, a trade grouping that currently hosts Iceland, Liechtenstein and Norway.

Cameron appears to be positioning himself firmly on the In side of the EU referendum without saying so explicitly. Not only this, but he is using his prominence as head of government to try to outmanoeuvre the main “Leave” players.

He argued that ‘Norway actually pays as much per head to the EU as we do. They actually take twice as many per head migrants as we do in this country but of course they have no seat at the table, no ability to negotiate.’ This is not wholly accurate: in a Norwegian situation Britain would pay about £1bn less each year, and a Civitas paper explores the ways Norway can affect EU legislation without having a formal vote.

Still, the Norwegian situation has its drawbacks, and Cameron declared he ‘would guard very strongly against [promoting it].’ Why has he done this?

The answer lies in the Leave side’s response. Vote Leave‘s campaign director Dominic Cummings said: ‘Vote Leave does not support the ‘Norway option’ for Britain. After we vote leave, we will negotiate a new UK-EU deal based on free trade and friendly cooperation. We will end the supremacy of EU law.’ The rival Leave campaign,, responded similarly, with co-chair Richard Tice remarking ‘Of course we can negotiate our own UK EU trade agreement.’ Ukip’s only MP, Douglas Carswell, wrote in The Express, ‘The PM’s not wrong about Norway’s relationship with the EU: she has got a duff deal from Brussels’.

At the moment it makes sense them to attack the Norway model, because Cameron is drawing attention to its flaws. But by ruling Norway out as their own preferred Brexit blueprint, these Leave leaders back themselves into a corner. The Norway option is the simplest way to leave the EU, retain access to the single market, gain control over our own trade policy, and evade some (not all) EU law.

The model is probably the safest Brexit option to push for, because it is closest to the current EU situation, and because it already exists, so all the kinks and questions are already worked out. By forcing the Leave campaign to deny they like Norway’s situation, Cameron forces them towards more radical, less tangible Brexit promises. These he can attack as unrealistic fantasies later in the campaign.

The theoretical deals Cummings, Carswell and Tice prefer simply do not exist at the moment. They may be attainable, they may be much better than Norway, but you cannot point to them and prove it. As the referendum approaches, the Remain campaign will be able to say that Brexit supporters are fantasists who have ruled out the only path that preserves the single market. What’s left? A Swiss model that currently includes unrestrained immigration,that has no free movement of services, and that took over a decade to negotiate. Beyond the Swiss model there are yet fuzzier allusions to comprehensive free trade deals . When all 27 remaining EU members will be able to veto a UK exit deal, it will be hard for Out campaigners to convince voters that hypothetical perfect deals could be delivered. After that you’re left with the World Trade Organisation option, with Britain facing tariffs, barriers and quotas on all its EU exports.

There are actually smaller groups that support permutations of the Norway option, including Futurus, the Bruges Group and ‘Flexcit’ supporters. They don’t see the Norwegian situation as a final destination, but argue it would be better to take the exit step to the European Economic Area (EEA) first, then use it as a stepping stone to negotiate a more comprehensive settlement.

The EEA is useful for this because it preserves most EU law and the single market in goods, services, labour and capital. It already works, is already in operation, so would be simple to join. This is very important because after formally telling the EU that Britain had decided to leave, the government would have only two years to negotiate an exit arrangement. Disengagement from the EU would be complicated and would need to be comprehensive – less ambitious deals I’ve studied have taken much longer than two years to finalise. Moving to the EEA would be simpler, its supporters argue, and easier to sell to the public as a sensible option.

Cameron’s tactic may then pay off. At the moment he looks foolish, having attacked an exit proposal that the prominent players do not actually want to defend. But further down the line, assuming Cameron fights for his renegotiated EU membership, he will be able to say that the “leavers” are gamblers, that they jettisoned the low-risk option in favour of big vague promises they cannot explain how they would deliver. And he’s sure to bring up this week’s denials if they try to U-turn.

Used with the author’s permission. For the original article, see or

Photo by liknes

Much ado about Norway

Last week, Norway and its relationship with the EU was the talk of the town. David Cameron spoke out against any idea of an independent UK using Norway as a model for a future relationship with the EU. Specially selected Norwegian ministers were quoted by the BBC and some daily newspapers saying how much they recommended the UK staying in the EU and what a raw deal they had from Brussels. Supporters of UK independence lined up to say that they did not support the so-called “Norway Option” – indeed, a round-robin e-mail from the Aroon Banks-fronted was quite adamant. “We are not Norwegian” proclaimed the banner headline and if you scrolled down, the text body began “NO WAY TO THE NORWAY” just to make sure everyone got the point.

You may think that all this fuss was much ado about nothing. Does anyone actually recommend Norway and its access of the EEA via EFTA as a model for an independent EU?

The answer, confusingly, is both yes and no. Nobody who advocates the Norway Option regards it as anything other than a stepping stone to get us out of the EU and the jurisdiction of the European Court of Justice within the two-year period specified under Article 50 of the Lisbon Treaty. It is not a final destination; rather a halfway house – an off-the-shelf, proven risk-free option that would get us through the exit door while allowing us the same full access to the Single Market which we currently enjoy as EU members. Its supporters, including some CIB Committee members, believe that it is the best way to reassure business, being unconvinced that the other options, like the so-called Swiss or WTO options offer a seamless transition to independence.

Virtually all informed advocates of independence, however, acknowledge that we could do better in the long term. The possibilities of a temporary brake on immigration from the EU allowed under the EEA agreement falls a long way short of the desire of many for an end to free movement of people. Furthermore, Norway, Iceland and Liechtenstein are required to implement EU legislation marked “EEA-relevant” (although see below.) The percentage of the total acquis which comes into this category works out at barely 21%, according to Richard North (who contacted the EFTA Secretariat), far lower than the “approximately three-quarters” quoted in a 2012 Norwegian government report. However, 21% is still too many. Ideally, we do not want any laws forced upon us by a foreign power.

Yet for all its shortcomings, the “Norway Option” will see the UK on the road out of the EU and is still a far better deal than the associate membership status within the EU which David Cameron will seek to offer us at the end of his so-called renegotiations. As he will only ever make it sound a good deal by discounting this halfway house to full separation, he has had to resort to giving full rein to the various myths that have been doing the rounds. We must not fall for these lies. Associate membership status within the EU is a continuation of UK slavery to the EU Commission, the ECJ and its inevitable ever closer political union.

Here are a few home truths about the so-called “Norway Option”:-

1. It is not “government by fax” (a phrase which is rather long in the tooth – who uses faxes now?)

2. Norway and other EEA/EFTA countries take part in a very thorough consultation process on EU regulation at the early stages where it most matters, even if they don’t have a final vote.

3. Most trade regulation now is GLOBAL and since 1992 the EU has been LEGALLY BOUND to accept global standards. Our EU membership actually keeps us off the global regulatory bodies where Norway has a say and we don’t. These are the organisations which tell the EU what to do. Norway chairs the section of Codex Alimentarius which deals with fish and the EU has to do what that body decides.

4. Norway can also decide that a new Directive is unacceptable and simply decline to enforce it. It did so with the Third Postal Directive so Norway kept its publicly run Postal Service whilst our Royal Mail had to be privatised.- a possible selling point with Labour-inclined voters!

5. Norway is not jointly and severally liable for all the EU’s debts. If an EU country or goes bust, many of the debts arising from its membership of the EU fall upon the remaining members, but not Norway. If an EU country defaults, like Greece, Ireland, Portugal, Spain, Italy, then some obligations for these debts will fall upon the UK, despite being outside the Eurozone. Norway will not pay a single Øre.

6. Norway is not subject to the Common Agricultural Policy, the Common Fisheries Policy, the Common Foreign Policy or many other pieces of EU legislation.

7. Norway is outside of the reach of the European Court of Justice, the EU’s supreme court. The ECJ cannot fine it for non-implementation of EU Law.

8. Norway’s annual contribution to help finance the single market and thus access it, amounts to a paltry £1.66 per year per head of population, a far cry from the £115 mistakenly claimed by Britain Stronger in Europe who, whether deliberately or accidentally, included the voluntary payments too. By comparison, we in the UK pay £150 per capita and the amount is rising.

9. The financial advantage Norway has enjoyed by remaining outside the European Union can best be illustrated by measuring the per capita Gross Domestic Product (GDP) – in other words, the total value of goods and services produced by a country divided by the number of inhabitants, which provides a rough guide to average income in a given year. These two countries have much in common – similar climates, low population density, high state spending on welfare and strongly export-driven economies. Norway’s main export is oil, whereas Sweden’s is iron ore. The per capita GDP figures were broadly similar for the period 1980-1994, but from 1995 onwards, when Sweden joined the EU, the Norwegians started to become much richer than the Swedes. Indeed, by 2008, Norway’s per capita GDP, at US$ 94,815, was over 80% higher than Sweden’s at US$ 52,521. It is worth pointing out Norway was already a substantial exporter of oil in 1990, several years before Sweden joined the EU, and its oil production peaked in 2001, yet the per capita GDP differential with Sweden has continued to widen. It is hard to imagine that Sweden’s decision to join the EU while Norway stayed out has not been a factor.

In summary, the “Norway Option” isn’t a bad arrangement, if far from perfect. The bottom line is that Norway has retained independence outside the EU and flourished. It’s hardly surprising, therefore, that a recent YouGov poll showed that Norway is even more anti-EU than we are in the UK. Whereas this poll showed the UK evenly divided between staying and leaving, only 17% of Norwegians wished to join the EU, with a whopping 68% opposed (the remaining 15% were either unsure or said they would not vote if a referendum was to be offered)

So why do some vociferous Norwegian politicians tell us what a bad deal they have? The answer is simple. They personally want their country to join the EU – a pretty forlorn hope judging by that poll. They know only too well that Brexit would finally kill their ambitions. When the UK leaves, convinced that life is better on the outside, EU membership would disappear permanently from the agenda for Norway. If we could swallow Cameron’s “associate membership” fudge, maybe, so they think, Norway might be sneaked into the EU via this back door.

Therefore, whatever the pros and cons of the Norway Option as a viable exit strategy, Brexit is not only essential for our own country; it would also benefit Norway by removing an irritating distraction for them.

Nothing is rosy in the “Remain in the EU” camp

Talks of a split in the “Leave” camp following the launch of two competing pro-withdrawal organisations, and vote.leave, in recent weeks is not exactly the sort of news those of us supporting independence from Brussels want to see splashed all over the media. Of course, there is a long way to go and many alliances will be made before the official “Leave” campaign receives its imprimatur from the Electoral Commission.

On Monday 12th, however, it was the turn of the “Remain” campaign in the spotlight and it wasn’t a particularly impressive show. The main speaker at the launch of Britain Stronger in Europe was Sir Stuart Rose, the former Chairman of Marks & Spencer. Being a businessman, he talked much about trade – the world’s largest free trade area, the significant volume of exports to the EU and so on. We were told that “a range of experts” linked three million jobs to our trade with the EU. Hang on, haven’t we heard this canard before?

This is a defence not of EU membership but of the Single Market which, of course, we would still have access to if we replaced our EU membership with membership of the single market. Flexcit proposes that through EEA and EFTA, the European Free Trade Association, we would still have access to the Single Market but would not be subject to the European Court of Justice or to the EU anti-competitive tariff walls. We could negotiate our own trade arrangements and would not be compelled to put every piece of EU legislation onto our statute books – a real win/win situation. For the umpteenth time, there would be no job losses. Jobs would increase as  our exports outside the EU accelerated beyond the current 63% of our total exports.

A pre-released version of the speech contained several references to supporters of withdrawal as “Quitters”, but for some reason, Mr Rose did not actually use the term in the speech. He also stated that Britain’s EU membership was worth “around £480 million a year” to each British household. A few hours earlier, he had said £450 per year. Confusion worse confounded! The real cash direct cost paid by the UK will be £13.5 billion+ (Over £400 per second.)

Furthermore, what’s wrong with quitting something in favour of something better? Did anyone deride AFC Bournemouth, Norwich City and Watford as “quitters” when they gained promotion from the Championship to the Premier League? Let’s face it, even by Rose’s admission, the EU is not the Premier League. He said lots of good things about our country and there were Union Jacks all over the pace at the official launch, but by contrast, he admitted that the EU was deficient – in need of reform. That has, however, been steadfastly been refused for over years. Indeed, the EU just grabs more and more power away from the member states. Lisbon was the last straw.

What is particularly sinister about Mr Rose’s decision to spearhead the campaign is that, until recently, he appeared to be somewhat less enthusiastic about the EU. A few months ago, he said it was nonsense to suggest businesses would quit Britain if it was not in the EU. Today, however, he played the fear card, talking of withdrawal as a “leap into the unknown”. What is unknown about functioning as a sovereign independent state once again? We did very well until 1973 and the USA, Canada, Australia, New Zealand and Japan are still working very well without being part of a supra-national empire. Did Singapore take “a leap into the unknown” when it was expelled from the Malaysian Federation in 1965? Perhaps, but it has never looked back – its citizens enjoy greater prosperity and freedom than their Malaysian counterparts.

The European project, an attempt to weld a group of very diverse nations into a single political entity, is is the leap into the unknown – and one which has already caused immense suffering in countries like Greece Spain, Italy, Portugal and Ireland.

The other speakers weren’t particularly impressive either. Baroness Brady, a Tory peer and successful businesswoman said that, “we cannot cope on our own in a very tough market.” What an unpatriotic, negative loser! We are the sixth largest economy in the world. The idea that we need those kindly Brussels bureaucrats to hold our hand in this big, frightening world because we are so incapable on our own is, frankly, risible.

Of course, for big businessmen like Sir Stuart Rose, who have benefitted from the pool of cheap EU labour, the EU has been a good thing. The army of lobbyists in Brussels have done much to oil the wheels of the EU machinery in favour of the big multi-nationals, but it hasn’t done much for the rest of us. And herein lies the weakness of the “remain” message. Rose speaks nonsense. A patriot is someone who feels positive about their country, not a negative loser.

The “leave” camp has mnany excellent arguments for leaving. The CIB and other like-minded groups are the true, positive patriots, with an exciting vision for our country’s future.

Photo by NHS Confederation

Reflections on my spell in the lions’ den

Over the years, I have undertaken quite a few speaking engagements, including addressing several political meetings. Last Thursday, however, was the first time I had spoken in a debate about the European Union. CIB was invited to send a speaker to represent the “leave” side by the Southampton University Debating Society and I ended up being the person thrown into the lion’s den.

Why do I say this? Because I knew right from the start I would be addressing a meeting where the vast majority of the audience would disagree with me about withdrawal. The student generation in general is predominantly pro-EU and the members of Southampton University Debating Society are overwhelmingly so – even more than I had anticipated. The usual straw poll taken at the start of the debate indicated that only a tiny minority of those in attendance supported withdrawal. Still, at least this meant that I was aware from the outset what I was up against.

The debate followed the usual format of two speakers for and two speakers against the motion. One speaker from either side was a student. I had Jonathan, a law student, as my fellow-supporter of independence and he acquitted himself well. The guest speaker for the opposition was Peter Wilding of British Influence. All four of us were given seven minutes to put across our respective points of view – quite a challenge. It seemed like barely had I begun to build up a head of steam before the chairman’s gavel warned me that I only had one minute left!

The initial presentations were followed by a lively question and answer session after which all four speakers were given three minutes to sum up. The outcome? I’d love to say that the “leave” side carried the day so convincingly that we had to restrain the newly-awakened audience from lynching the speakers who supported EU membership, but unfortunately, that is the stuff of pipe dreams. The pro-EU cause still carried the day overwhelmingly, but Jonathan and I had managed to shift opinion slightly in our favour, so I left with at least some crumbs of comfort.

I also left with plenty to mull over and I hope that my reflections on the evening’s events may be of help to anyone else finding themselves in a similar position. Countless debates and discussions are likely to be held on this subject over the next two years and if any of us find ourselves asked to take part, it is advisable to be as prepared as possible.

My first thought concerns the speakers put forward by the opposition. Pro-EU groups are well-funded and thus able to field experienced speakers used to the cut and thrust of debate. These people will look to exploit any mistakes made by our side, to seek to control the terms of the debate and even if they cannot refute some of the more damaging accusations made about the EU, they are very good at creating suitable “mood music” – playing to the emotions of the audience.

My most glaring mistake was to claim that Winston Churchill never back-tracked from his famous comment that “Each time Britain must choose between Europe and the open sea, we shall always choose the open sea.” Apparently, in 1961 Churchill wrote a letter to his Constituency Chairman stating that “I think that the Government are right to apply to join the European Economic Community.” (and this claim is supported by at least one article  on the internet.) Oh well, we live and learn. At least Churchill was sufficiently cautious about the project to ensure we stayed out in those formative years, but I’ll be a lot more careful if I mention his name again. Still, I did have one chance to get my own back. Mr Wilding mentioned that the Norwegian Foreign Minister had strongly urged us not to go for the same relationship as his country enjoyed with the EU. Although he didn’t mention the famous “fax diplomacy” phrase, it was sufficient for me to be able to explain that the Norwegian government still wants to join the EU, even if most Norwegian voters don’t. I was able to say that other Norwegian politicians like Anne Tvinnereim paint a very different picture and that the reason Norwegian government ministers do not want to let us know how good their relationship is with Brussels is because if we take this on board and vote to leave, it will scupper their hopes of membership for ever. Touché!

In future, I will also do my best to avoid using the word “back” – for instance as in “we can go back to being a sovereign, independent country.” Mr Wilding was pretty merciless when I used this phrase. “He’s looking to the past, not the future” – or words to that effect. Thankfully, again in my closing summary, I was able to qualify my statement along the lines of “If you know you are heading down a blind alley, you have to go back first before you can truly move forward,” but I wouldn’t recommend using “back”, “revert”, “return” or similar. The opposition is well-trained to latch onto anything which will enable them to score points. It’s not good to let them put us on the defensive.

Another observation is that trade, jobs and exit routes hardly featured in the question and answer session. I had anticipated this and had not said much about them in my opening presentation except to mention that there was an escape strategy which would preserve our trade with the EU and our jobs too. I had also come prepared to talk about the refugee issue, which I had expected to feature prominently, but it hardly got a mention. I did try to frame the debate in terms of building a new kind of politics – of my sympathy for people who voted for Jeremy Corbyn because they were fed up with managerial, top-down politicians, pointing out that the EU project was designed by – and is still run by – exactly these sort of people who are so contemptuous of the electorate and democracy in general. I also made sure that issues like associate membership and the location of the real top tables were given a mention. I reckon that with a more level playing field – in other words, if the audience had consisted of 100 assorted people from my village or the nearest town rather than 100 students – I would have given Mr Wilding a good run for his money and could have won the debate. Nonetheless, even though I know I would be most unlikely to carry the floor, I would be quite happy to debate the issue with students again.

The fact that the audience swayed slightly away from supporting the EU is very interesting and encouraging. This is how an unstoppable momentum for withdrawal will be achieved – little by little, a few at a time. External events may work in our favour, but for example, one must not place much, if any, importance on media reports that the migration crisis is shifting public opinion towards withdrawal. We must hope, both for the sake of these unfortunate people themselves as well as for the countries of Europe, that this will be a non-issue well before the referendum takes place. Rather, we must present a well-argued, balanced argument for the political advantages of independence and make clear our enthusiasm for it. After all, would we be working so hard to secure a “leave” vote if we didn’t believe life will be a lot better as a sovereign state?

One further thought which crossed my mind is that to speak to a lecture room full of students who are engaged with political issues is only to reach a tiny number of people. Debates enable us to reach some individuals but only a small minority. The “little by little” approach is a battle that must be fought on several fronts – debates, leaflets, the internet, social media, letters to newspapers and indeed, casual conversations with friends and acquaintances. Winning people over also requires repeated exposure to our arguments. I would love to know how many people who voted to stay in at the start at the meeting and voted the same way at the end were perhaps just a little less convinced of their position at the end of the debate, having heard what was (I hope) a passionate and well-argued case for independence for perhaps the first time. You can’t expect to change many strongly-held opinions in the space of just one brief exposure to an alternative position. To prove the point, eighteen months or so ago, I was distinctly unconvinced by arguments that the EEA/EFTA route was the only viable escape strategy from the EU. I am very grateful to Robert Oulds of the Bruges Group for clarifying my thinking here, but it took extensive perusal of both his writings and those of Dr. Richard North over a period of several months to change my mind on this subject. “Soft” supporters of EU membership and the undecided can likewise be won over to support withdrawal, but it won’t happen overnight. It will require persistence on our part.

My final word to anyone else contemplating the cut and thrust of debating our EU membership is simply this:- enjoy it! We may be dealing with the most important political decision our country will face in our lifetime and we all feel passionately about the subject, but let’s make the most of the experience. Mr. Wilding thanked me at the end for a lively debate and in spite of our profound differences on this key issue, yes, we would both agree that it was a good, fascinating, well-fought battle. I did enjoy it, even though I didn’t carry many of the audience with me and, somewhat wiser from my trip to the lions’ den, I’m looking forward to the next time.

Photo by David Paul Ohmer

The UK will save £6.5bn by leaving the EU and joining EFTA

The UK could be saving over £6.5bn a year by switching from EU/Single Market membership to EFTA/Single Market membership. Also other northern European countries could save £billions by also switching to EFTA (European Free Trade Association). A ‘No Thank You’ vote in the upcoming referendum will help the UK join EFTA and upgrade the treaty with EU countries to something like a free trade agreement, with a much smaller tariff ‘EU contribution’. Yes, as well as  EFTA/EEA/Single market countries running their own fisheries, agriculture, home affairs i.e. asylum, justice i.e. no EAW (European Arrest Warrant), veto of EEA regulations (the EEA is actually the Free Trade element of the EU), ability to negotiate Free Trade Agreements around the world, control immigration like Liechtenstein, they also save money with lower EU contribution/tariffs to the EU.

It is worth also mentioning the side effects of giving aid and also the large amount of evidence that there is little net benefit of giving aid to countries, as can be seen around the world, and that countries trading to prosperity have had much more success in raising living standards of many of their people.

If people in other EU countries vote for politicians who have bad policies, and are corrupt and incompetent, why should other countries voters pay for others mistakes? If bad habits are rewarded, why would people change? Evidence shows they don’t. Aid can lead to people and governments deluding themselves that their policies are working.

Also aid gives an unfair electoral advantage to the existing government, since EU money spent helps their popularity, and also means they can use their own funds, which would have gone on an EU project, to buy votes, by spending elsewhere. So aid interferes with democracy in other EU countries.

Maybe it is better for EFTA to be a northern European grouping of countries, who have more similar business cultures and don’t look for handouts from other countries. As well as  current EFTA members Norway, Iceland, Liechtenstein, Switzerland, also UK, Denmark, Sweden, Finland, Austria and the Netherlands.

So why have savings for switching to EFTA membership increased from around £3bn to £6.5bn?

A number of reasons. When, over 4 years ago, the savings were calculated, the UK was contributing net £6bn a year and EFTA membership would save around £3bn. Since then, the net contribution had risen to £8bn and then to £11.3bn, when the new Gross National Income calculation was used, and also a slightly bigger EU rebate then reducing the total. Then the newly negotiated EEA grants and Norway grants have increased from €350 million per year to €400 million, so reducing savings slightly – still giving a larger overall saving than before.

Using 2013 figures and double checking with these the GDP per capita is calculated as shown here.

2013 figures, gross paid, received and net contribution in Euros

Gross EU contribution Money  received incl. Rebate Net EU contribution
Country € millions € millions € millions
UK 17068 6308 10760
Denmark 2899 1434 1465
Sweden 4211 1661 2550
Finland 2159 1497 662
Austria 3191 1862 1329
Netherlands 6552 2264 4288


The new EFTA/EEA grants, mainly funded by Norway, add up to €400.3 million a year. With a Norway population of 5.1 million, this is €78.5 a year per person. With UK population of 64.1 million and the current 2015 exchange rate of the Euro buying £0.70, this could mean the UK paying £3.52bn a year. However since the EU uses GNI, then taking into account the UK’s lower GDP per capita compared to Norway of 0.61, this would show a contribution as an EFTA member of £2.15bn  a year. Since the most recent figures for EU contributions, receipts and rebates, is 2013, the calculations below are based on 2013, and using the 2013 £ vs Euro exchange rate. (See this too)


Country Norway Country Norway ratio Country Country New EU Current Savings
  EU GDP GDP of EU, new population contribution EU as
  contribution per per Norway contribution   as EFTA contribution EFTA
  per capita capita capita GDP per capita   member   member
    $ $     million € millions € milions € millions
a b c d=b/c e=a*d f g = e*f h i = h-g
UK 78.5 41000 67000 0.61 48.0 64.1 3079 10760 7681
Denmark 78.5 47000 67000 0.70 55.1 5.6 308 1465 1157
Sweden 78.5 46000 67000 0.69 53.9 9.5 512 2550 2038
Finland 78.5 38800 67000 0.58 45.5 5.4 245 662 417
Austria 78.5 41000 67000 0.61 48.0 8.5 408 1329 921
Netherlands 78.5 43000 67000 0.64 50.4 16.7 841 4288 3447

Translating the savings into each countries local currency, using the pound vs Euro in 2013 of €1.18:

Country New EU contribution as EFTA member  Current contribution EFTA  Savings as member Local currency in local exchange rate  savings currency
  € millions € millions € millions to Euro millions
g = e*f h i = h-g j k=1*j
UK 3079 10760 7681 0.85 6529
Denmark 308 1465 1157 7.46 8628
Sweden 512 2550 2038 9.46 19279
Finland 245 662 417 1 417
Austria 408 1329 921 1 921
Netherlands 841 4288 3447 1 3447

The newly negotiated EFTA/EEA Grants (EEA = Single Market) and Norway Grants show how the UK, in EFTA and a similar agreement, would save £6.5bn a year net, on current EU/EEA membership.

The EU accounts haven’t been signed off by auditors for over 15 years. EFTA accounts are signed off by auditors every year.

EU Referendum: No Thanks, Upgrade to EFTA/Single Market, save £6.5bn a year.

In summary, the large savings of £6.5bn a year, would be more usefully spent in the UK, instead of rewarding bad habits in other parts of Europe. The lower EU aid funds, would also be able to be spent directly on projects, instead going through the EU machines so ensuring checks and value for money and outcomes. With less aid, countries would need to follow better policies, more competently and honestly. The UK could use the savings for fixing the problems from EU membership, for example the centralisation that has been happening in the UK and also white elephant projects, like big computer projects that fail to deliver. Lower EU contributions are a win-win for the UK and other European countries and an opportunity for EFTA to be a northern European grouping and leading global trade grouping.

(This article first appeared in UKIP Daily and is reproduced by permission of the author)

Photo by NHD-INFO