The European Economic Area is a result of a global agreement that allows member states of the European Free Trade Association to access the European Union’s single market.
In addition, the European Economic Area (EEA) connects Iceland, Liechtenstein, and Norway, three countries that are members of the European Free Trade Association (EFTA), into a common internal market.
The objective of these regulations is to make it possible for people, goods, services, capital, and the freedom to choose where they want to live within the European Single Market.
Additionally, the Treaty on the European Economic Area is a commercial agreement. Its goal is to encourage a steady and balanced strengthening of the region’s economic and trade ties. As a result, the terms “EEA” and “countries” included in it will be defined and discussed in this article.
Where is Europe’s Economic Area ?
The countries that have agreed to the free movement of goods, people, services, and capital with the other countries that are members of the European Economic Area (EEA) make up the European Economic Area (EEA). As a result, the European Free Trade Association (EFTA) and the European Union (EU) are now part of a single European market created by this argument.
Additionally, the European continent is made up of 31 nations. There are three European Free Trade Association members and 28 European member states among the 31 nations. The 1992 Treaty between the member states led to the establishment of the EEA.
Member States of the EEA The territory of Europe is comprised of 31 nations, which include the three other EFTA members and 28 of the EU’s member states. The following 31 nations are members of the European Economic Area:
Austria, Bulgaria, Croatia, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
The purpose of the European Economic Area (EEA)
The agreement that the European Economic Area has with its member states is as follows:
The freedom to move:
capital in the European Single Market, as well as the freedom to choose any country as their home within this area.
Main EEA agreements.
The following are the primary agreements that have been signed by the states that have created this zone:
Participation of ten new States
Participation of two new States
Participation in one new State
#1. EEA agreement
Nineteen states, + plus the EEC and ECSC, originally signed it on May 2, 1992. The agreement entered into force on January 1, 1994, as adjusted by the 1993 Protocol.
#2. The adjusting protocol
It was initially signed on March 17, 1993, by 18 states in addition to the EEC and the ECSC. The protocol went into effect on January 1, 1994, without Switzerland’s signature.
#3. the inclusion of ten brand-new nations.
On October 14, 2003, an agreement regarding the inclusion of ten new states in the EEA was signed by the 28 states and the EC. Following the European Union’s 2004 expansion, the agreement went into effect on December 6, 2005.
#4. the inclusion of two brand-new nations.
On July 25, 2007, two new states’ inclusion in the EEA was agreed upon by the 30 states and the European Union. Following the European Union’s 2007 expansion, the agreement went into effect on November 9, 2011.
#5. involvement in a brand-new state.
Following the European Union’s 2013 expansion, 31 states and the EU agreed on April 11, 2014, to include one additional state in the EEA. Nevertheless, the agreement has not yet entered into force.
The distinctions between the EEA and the EU.
The EEA and the EU are not the same thing, despite their close relationship. While some EEA members are EU members, all EU members are automatically required to be EEA members. While the EU is both an economic and political union, the EEA agreement is related to the single market and its laws. Several EFTA members, including Austria, Finland, and Sweden, have joined the EU over time.
Furthermore, while the European Economic Area is solely concerned with economic matters, the European Union is political and economic. Three of the EEA nations are not members of the European Union, but all 27 EU states are also members of the EEA. With the rest of the EEA, these three nations can trade and move freely, but they may not elect representatives to the European Parliament and may not be bound by some EU political decisions.
The European Economic Area (EEA) includes three additional nations, which makes up the difference in terms of membership:
All EU legislation pertaining to the Single Market must be implemented by member states of the European Economic Area (EEA). However, despite the fact that the European Economic Area’s (EEA) goal is to bring the EU’s internal market to countries in the European Free Trade Area (EFTA), EEA members are not obligated to implement EU policies on:
- Customs union,
- common trade policy,
- common foreign and security policy,
- common agriculture and fisheries policies (despite the fact that the EEA Agreement includes provisions regarding trade in agricultural and fish products),
- direct and indirect taxation,
- economic and monetary union.
Differences between the EEA and EFTA
The European Free Trade Association (EFTA) is made up of four nations. These are the members:
Three of the four EFTA members participate in the European Economic Area: Iceland, Liechtenstein, Norway, and Switzerland. Neither the EEA nor the EU include Switzerland.
The fact that EFTA membership is required prior to EEA membership is the primary distinction between the two. However, a nation can join the EFTA without being a member of the EEA.
Additionally, due to its lack of a trade relationship with the EU, EFTA does not have access to the Single Market. Switzerland has bilateral agreements outside of the EFTA framework primarily because of this.
Differences Between the EEA and the Schengen Area While the EEA is about the free movement of people, capital, goods, and services, the Schengen Area is about traveling without being stopped at the border and using the same visa system across the entire region. Consequently, the majority of EEA nations are members of the Schengen Area.
The following nations are not members of the Schengen Area but are members of the EEA:
On the other hand, Switzerland is a member of the Schengen Area but not of the European Economic Area. However, it is able to participate in internal markets as a result of special agreements.
Differences Between the European Economic Area and the Eurozone
The Eurozone is an EU subgroup of member states that use the Euro as their currency. The following nations are involved:
None of the countries that are members of EFTA use the Euro as their currency; however, 19 of the countries that are members of the EU or the EEA do. Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Benefits of Being a Member of the European Economic Area (EEA)
The main benefit of being a member of the EEA is that UK businesses will still have access to the single market passports. These passports let businesses like banks, insurers, dealers, asset managers, and others do business across EEA borders without having to get local licenses or set up a local subsidiary.
In addition, the EEA provides numerous advantages to individuals, businesses, and the economies of its member nations. These are some:
- The ease with which prices can be compared between countries boosts competition between businesses, thereby benefiting consumers
- Price stability
- The Euro makes it easier, cheaper, and safer for businesses to buy and sell within the euro area and to trade with the rest of the world.
- Improved economic stability and growth
- better integrated and, therefore, more efficient financial markets.
- More significant influence on the global economy
- a tangible sign of a European identity.
Questions and Answers:
What is a European Economic Area?
The Economic Union of Europe (EEA) Iceland, Norway, and Liechtenstein are all members of the European Economic Area (EEA). They can participate in the EU’s single market thanks to it. Switzerland is a member of the single market, but it is not a member of the EU or EEA.
Is the UK a member of the E.E.A.?
The official website of the EU contains additional information. On January 31, 2020, the United Kingdom left the European Economic Area (EEA). Norway, Iceland, and Liechtenstein are members of the European Economic Area (EEA), but they are not EU members. Switzerland is not a member of the EEA or the European Union.
What number of nations are members of the European Economic Area?
By 2020, there will be 30 states with members: 27 nations that are members of the European Union and three of the four nations that make up the European Free Trade Area (EFTA), including Norway, Iceland, and Liechtenstein.
What distinguishes the European Union from the European Economic Area?
The European Economic Area is solely concerned with economic matters, while the European Union is political and economic. Three of the EEA nations are not members of the European Union, but all 27 EU states are also members of the EEA.
What is a nation that does not belong to the EEA?
Non-EEA Countries AFGHANISTAN ALBANIA ALGERIA AMERICAN SAMOA ANDORRA ANGOLA ANGUILLA ANTARCTICA ANTIGUA AND BARBUDA ARGENTINA
The European Free Trade Area (EFTA) countries were included in the creation of the European Economic Area (EEA) in 1994 to benefit from the EU’s internal market regulations. The EEA has Norway, Iceland, and Liechtenstein as parties. Despite being a member of EFTA, Switzerland does not participate in the EEA.
You now know a lot about the European Economic Area and the other countries that are a part of it. Please get in touch with us at workstudyvisa.com for additional details.
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