McSmörgåsbord: What post-Brexit Scotland can learn from the Nordics

Scotland’s response to Britain’s divided Brexit vote has been positively Nordic – Scots expect diversity and empowerment to be entirely possible – whilst Westminster’s reaction has been decidedly British.

One singer – one song. One deal for everyone – end of.

LESLEY RIDDOCH

Of course, the majority of Nordic nations are EU members. But perhaps the EEA is a closer fit for Scotland? Perhaps, too, a viable halfway house option would boost support for Scottish independence? Especially since Holyrood may not automatically retrieve powers from Europe post Brexit.

PADDY BORT

McSmörgåsbord

What post-Brexit Scotland can learn

from the Nordics

LESLEY RIDDOCH AND PADDY BORT

Luath Press Limited

EDINBURGH

www.luath.co.uk

First published 2017

eISBN: 978-1-910324-91-2

The authors’ right to be identified as author of this work under the Copyright, Designs and Patents Act 1988 has been asserted.

Text © The Contributors 2017

Maps © OpenStreetMap contributors from data available under the Open Database License (openstreetmap.org and opendatacommons.org)

Dedicated to Eberhard Bort

born 1 December 1954

died 17 February 2017

EBERHARD (PADDY) BORT was the backbone of the Edinburgh Traditional Music scene and a lynchpin of Nordic Horizons. Although he came from Germany and spent time in Ireland, I think the Nordic nations perfectly and unselfconsciously acted out the ‘small is beautiful’ mantra at the heart of Paddy’s politics. Paddy was a born-again European – someone who revelled in the fabulous spectacle of cultural difference without worry, disapproval or xenophobia and maybe that’s why he was so determined we should produce this book, exploring the vast array of different relationships between Europe and the Nordic nations – a palette from which Scotland might soon pick its own post Brexit relationship. Paddy breathed life into this wee book from the start and finished all major corrections the day before he died. It is now dedicated to him and to the small peaceful Nordic nations he so admired.

Lesley Riddoch

The demographic and economic statistics used in the country boxes in this book were sourced from the following locations:

gov.scot; Scottish Government

mfa.is; Ministry for Foreign Affairs

nrscotland.gov.uk; National Records Scotland

scb.se; Statistics Sweden

ssb.no; Statistics Norway

stat.gl; Grønlands Statistik (Statistics Greenland)

statbank.dk; Statistics Denmark

statbank.hagstova.fo; Statistics Faroe Islands

statice.is; Statistics Iceland

tilastokeskus.fi, pxnet2.stat.fi; Statistics Finland

cia.gov; CIA World Factbook

data.worldbank.org; World Bank

Eur-lex.Europa.Eu; EUR-Lex Access to European Union Law

Europa.Eu; European Union Official Site

imf.org; International Monetary Fund

and the following publications:

Bache, Ian and Stephen George (2006) Politics in the European Union, Oxford University Press. p.540–542

Havemann, Joel (4 June 1992). ‘EC Leaders at Sea Over Danish Rejection : Europe: Vote against Maastricht Treaty blocks the march to unity. Expansion plans may also be in jeopardy.’ LA Times.

Lang, Arabella (14 January 2013). ‘Norway’s relationship with the Eu’. House Of Commons Library.

Contents

Preface

The Trading Clubs of Europe, their rules and origins

Glossary

Timeline

CHAPTER ONE: Sampling the Smörgåsbord of Nordic Relations with Europe

Lesley Riddoch and Paddy Bort

CHAPTER TWO: Norden – an intertwined history

Mary Hilson

CHAPTER THREE: Lessons from Iceland

Jón Baldvin Hannibalsson

CHAPTER FOUR: A Reverse Greenland?

Ulrik Pram Gad

CHAPTER FIVE: The Faroe Islands – All about Fish

Bjørt Samuelsen

CHAPTER SIX: Fishing, Forestry and Agriculture: Sustainability and the ‘Norwegian Model’

Duncan Halley

CHAPTER SEVEN: No Signs of Swexit – Sweden and the European Union

Eberhard Bort

CHAPTER EIGHT: Finland – Totally in and helping to write the EU rulebook

Tuomas Iso-Markku

CHAPTER NINE: Options for Scotland

Lesley Riddoch

Appendix: Nordic Country Profiles

Preface

IN STARK CONTRAST to the UK Government’s insistence on a ‘one singer, one song’ approach to Brexit, Nordic experience with the European Union varies dramatically – even within individual Nordic states. The palette ranges from full membership in the case of Finland (in Euro and Schengen) to Sweden (in the EU but outside the Euro), to Denmark (in the EU but outside the Euro, and with the autonomous Faroes and Greenland outside the EU), to Norway (outside the EU but inside the Single Market, and in Schengen) and to Iceland (outside the EU, having dallied with the idea of joining after the banking crash) – and all the Nordic nations square these very varied relationships with Europe with a similar and unchanging membership of the Nordic Council.

This book emerged from an event on 29 October 2016 in Edinburgh, organised by the policy group Nordic Horizons, together with Edinburgh University’s Academy of Government, financed by a Scottish Government grant which covered the speakers’ travel and accommodation costs. Contributors from the Nordic countries explored their ‘Smörgåsbord’ of relationships with the EU – and whether Scotland post-Brexit might learn any lessons from their experience. Three hundred people attended, including the Cabinet Secretary for Cultural and External Relations, Fiona Hyslop. It rapidly became clear that Britain is not the only North Atlantic State with mixed views about the EU.

It was good to see Scottish Government ministers meeting the Nordic Horizons speakers – a real Nordic meeting of minds. These small nations have experienced almost every conceivable situation that might befall Scotland – except of course being dragged out of the EU against their will.

We are grateful to Lily Greenan for transcribing the speakers’ presen­tations and to the speakers themselves for their participation and contribu­tion, and thank them for their easy cooperation on this book. We would also like to thank Cabinet Secretary Fiona Hyslop for opening the conference, and the Academy of Government for making it happen at Edinburgh University. Without the grant from the Scottish Government, neither the event nor the book would have been possible. Last, but certainly not least, thanks to Gavin MacDougall and his team at Luath Press.

Nordic Horizons, founded by Nordic policy enthusiast Dan Wynn and journalist, broadcaster and author Lesley Riddoch in 2009, is an informal group of Scottish professionals who want to raise the standard of knowledge and debate about life and policy in the Nordic nations. The Scottish Government has funded Nordic Horizons to bring Nordic experts to Scotland to engage with government officials and other policymakers and influencers. This has led to the development of a Nordic Policy Network within the Scottish Government, where civil servants share information and experiences in order to inform policy.

Lesley Riddoch and Paddy Bort

31 January 2017

The Trading Clubs of Europe,

their rules and origins

DEFINITIONS ARE a dull way to start a book. But unless the differences between the EU, EFTA, and EEA are clear from the outset, readers may fail to properly savour the subtle differences in Nordic relations with Europe described in this book. Basically, the EEA is the mechanism that extends the Internal Market of the EU to the three participating states of the European Free Trade Association. EFTA is an alternative trading bloc to the EU created in 1960 with no ambitions for further political integration. Iceland, Liechtenstein and Norway are EFTA members who are also in the EEA (and thus have access to the EU’s 500 million consumers.) EFTA’s fourth member Switzerland has opted not to join the EEA.

So currently the EEA comprises the 28 EU Member States and the three EEA EFTA States. Simple.

Here’s how EFTA deals with Frequently Asked Questions:¹

WHY WAS EFTA CREATED AND HOW IS IT DIFFERENT FROM THE EU?

The European Free Trade Association is an intergovernmental organisation, established in 1960 by the EFTA Convention for the promotion of free trade and economic integration between its member states (today Iceland, Liechtenstein, Norway and Switzerland). EFTA doesn’t envisage political integration, it doesn’t issue legislation, nor does it establish a customs union.

EFTA’s first objective was to liberalise trade between its member states. In 1972, each EFTA State negotiated bilateral free trade agreements (FTAs) with the EEC. Currently, the EFTA States have 26 FTAs in force or awaiting ratification covering 36 partner countries worldwide.

EFTA States are not obliged by the EFTA Convention to conclude preferential trade agreements as a group. They maintain the full right to enter into bilateral third-country arrangements.

WHAT IS THE EuROPEAN ECONOMIC AREA?

The European Economic Area (EEA) was established by the EEA Agreement in 1994. Its objective is to extend the Internal Market of the EU to the three participating EFTA States, creating a homogeneous European Economic Area. Currently, the EEA comprises the 28 EU Member States and the three EEA EFTA States – Iceland, Liechtenstein and Norway.

Under the present wording of the EEA Agreement, it’s impossible to be a party to the EEA Agreement without being a member of either the EU or EFTA.

The EEA Council takes political decisions leading to the amendment of the EEA Agreement, including possible enlargement. Decisions by the EEA Council are taken by consensus between the EU on the one hand and the three EEA EFTA States – Iceland, Liechtenstein and Norway – on the other.

WHAT IS COVERED BY THE EEA AGREEMENT?

All relevant Internal Market legislation is integrated into the EEA Agreement so that it applies throughout the whole of the EEA. The core of these rules relate to the free movement of goods, capital, services and persons. In addition, the EEA Agreement covers areas such as social policy, consumer protection, environment, company law and statistics. In order to ensure equal conditions of competition throughout the EEA, the EEA Agreement mirrors the competition and state aid rules of the EU Treaties. It also provides for participation in EU programmes such as those for research and education.

WHAT IS NOT COVERED BY THE EEA AGREEMENT?

The EEA Agreement does not cover EU common agriculture and fisheries policies, although it contains provisions on farming and fishing trade. The EEA does not have a customs union, common trade policy, common foreign and security policy, justice and home affairs, harmonised taxation or economic and monetary union.

Schengen is not a part of the EEA Agreement. However, all of the four EFTA States participate in Schengen and Dublin through bilateral agreements and they all apply the provisions of the relevant Acquis.

HOW DO THE EEA EFTA STATES CONTRIBUTE FINANCIALLY TO THE EU?

First, the EEA EFTA States contribute towards reducing economic and social disparities in the EEA through the EEA Grants. Currently the beneficiary states include Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. In addition to the EEA Grants, Norway has funded a parallel scheme since 2004 – the Norway Grants. The funding period covering 2014–2021 has a total financial envelope of approximately €400 million per year. These contributions are not managed by the EU, but by the EFTA Financial Mechanism Office in collaboration with the beneficiary countries.

Second, the EEA EFTA States contribute towards the EU programmes and agencies that they participate in through the EEA Agreement. These contributions are added to the EU budget, increasing the total financial envelopes of the programmes and agencies in question. For the current 2014–2020 EU multiannual budget period, the total EEA EFTA contribution to EU programmes and agencies is approximately €460 million per year.

¹ http://www.EFTA.int/faq

Glossary

EEC: European Economic Community, created by the Treaty of Rome, 1957. After the Maastricht Treaty which came into force in 1993, it became the

EC: European Community – one of the three communities (alongside the

ECSC: European Coal and Steel Community of 1951 and

EURATOM: the European Atomic Energy Community of 1957) which were subsumed into the

EU: European Union through the Maastricht Treaty in 1993.

EFTA: European Free Trade Association, an intergovernmental organisation established in 1960 by seven European countries to promote free trade and economic integration to the benefit of its Member States. All original signatories except Norway and Switzerland withdrew from EFTA upon joining what is now the European Union, as did Finland which had become an associate member in 1961 and full member in 1986. As Iceland joined in 1970 and Liechtenstein in 1991 EFTA currently has four Member States: Iceland, Norway, Liechtenstein and Switzerland.

EEA: European Economic Area consists of the 28 Member States of the European Union and three EFTA countries: Iceland, Liechtenstein and Norway, but not Switzerland. The Agreement on the EEA entered into force on 1 January 1994. It seeks to strengthen trade and economic relations between the contracting parties and is principally concerned with the four fundamental pillars of the internal market, namely: the free movement of goods, people, services and capital.

CUSTOMS UNION: A type of trade bloc in which a group of member countries share a single external trade policy and tariff, though sometimes different import quotas are used. The purpose of a Customs Union is usually to foster increased economic efficiency and closer cultural and political ties between member states. The European Union Customs Union, for example, consists of all EU member countries, as well as Monaco and some UK territories which are not EU members.

SCHENGEN: A group of twenty-six European countries, named for the Schengen Agreement of 1985, which have abolished any type of border or passport