Norway Seeks to Piggyback on ‘Brexit’ Deal to Escape EU's Grip

Erste Group CEO Says ‘Brexit’ Is a Completely Crazy Idea
  • U.K. deal to cut benefits for EU workers eyed in Norway
  • Nordic nation contributes $948 million to bloc with little say

As the U.K. agonizes over whether to stay or leave, Norway is eyeing its own way of distancing itself from the European Union. 

QuickTake Will Britain Leave the EU?

The thing is, the Nordic nation isn’t part of the club to begin with.

The case illustrates how hard it will be for the U.K. to escape the bloc’s influence even if it decides to head for the exit. While voters have twice rejected joining the EU, Norway has still adopted 75 percent of its laws to access the lucrative single market.

Some lawmakers in Europe’s second-richest nation per capita now want a deal similar to the one U.K. Prime Minister David Cameron struck with the EU on curbing welfare benefits for workers from other member states.

“Thanks to Britain’s agreement with the EU, we could solve some of our own issues,” said Arve Kambe, a lawmaker of the ruling Conservatives who is chairman of parliament’s labor and social affairs committee. “We want to have the same options that Britain has with work-related benefits.”

With an economy backstopped by an $810 billion wealth fund, Norway has a lot to offerforeign workers. The nation provides its 5.2 million residents with publicly funded health care, parental benefits and practically free education.

Cost-Benefit Analysis

As a result, it now spends about 223 million kroner ($25.8 million) a year on family and work-related benefits for migrants, according to Kambe. The problem, for Kambe, it that much of the cash is being sent back to Poland, Bulgaria or other countries where the cost of living is lower. These payments should be adjusted depending on the country, he said.

Norway also has far larger costs in accessing EU’s internal market as a member of the European Economic Area. Western Europe’s biggest crude producer contributes roughly 860 million euros ($948 million) annually to help implement EU policy and for programs designed to reduce economic disparities within the bloc, according to the Norwegian Foreign Ministry.

The payoff for this membership is evident. Nearly 60 percent of its foreign trade is with Europe these days. It’s also the U.K.’s largest supplier of natural gas.

“Through more than 20 years the agreement has broadened and deepened the
cooperation between the EU and Norway,” EEA and EU Minister Elisabeth Aspaker, said in an e-mail.  “It has been mutually beneficial and has functioned well.”

And while it has no say in EU legislation, being outside the bloc means it can continue to protect its fish industry and subsidize its agricultural sector.

Kambe is joined by part of the opposition in wanting to loosen ties to the EU. According to Liv Signe Navarsete, a lawmaker for the anti-EU Center Party, Norway has too often allowed itself to be steam-rolled by decisions made in Brussels.

Leading political parties have “accepted everything from Brussels, even though they don’t have to, using the EEA agreement to make us as close to members as possible,” said Navarsete, a former minister in the prior government.

Norway’s citizens said no to full membership in referendums in 1972 and 1994 and that’s not about to change. A Sentio poll in December showed that 72 percent of Norwegians want to remain outside the EU.

Because of its oil wealth, Norway can largely afford to go it alone, even as the oil slump is now pressuring the economy. In the aftermath of the global financial crisis, unemployment peaked at 3.7 percent, far below the euro area’s.

A British exit from the EU would make it even less likely that the Nordic nation will ever join the bloc, said Jan Erik Grindheim, the head of pro-EU group

“It’s a question of legitimacy -- we’re a member of the union without any political influence,” said Grindheim, an author and lecturer. “And If Britain leaves, then Norway will never join.”

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