EUI - The functioning of the EEA-agreement, challenges for the EFTA-countries and for the EU, the choice or the compromise...

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On 1 January 1994 The European Economic Area Agreement came into force. The fundamental aim was the creation of an economic area, based on common rules and equal conditions of competition comprising all EU and EFTA countries. At the same time it was a req uirement that the autonomy of each party should be respected. The task was a bit like trying to mix oil and vinegar. The EU, being a supranational organisation, adopts legislation with direct effect for companies and members in all member countries. For m ost EFTA countries, however, direct effect was unacceptable because under their constitutions, their national parliaments have an exclusive right to legislate. Thus, the starting point is an EEA Agreement, functionally limited to extending the common mark et into the three EFTA States through the four freedoms and competition rules. At the same time the Agreement is trying to achieve homogeneity with an EU which is moving further and further away from being functionally limited to facilitating a common mar ket. The future functioning of the EEA Agreement must be based on an analysis of the combined effects of all the concessions and individual adjustments in a changing environment.