European Economic Area ( EEA )The European Economic Area ( EEA ) was established on 1 January 1994 following an agreement between Norway, Iceland and Liechtenstein and the European Union (EU). It allows these countries to participate in the EU's single market without joining the EU. In exchange, they are obliged to adopt certain EU internal market legislation.The European Economic Area is based on the same "four freedoms" as the European Community: the free movement of goods, persons, services, and capital among the EEA countries. Thus, the EFTA countries that are part of the EEA enjoy free trade with the European Union. As a counterpart, these countries have to adopt part of the Law of the European Union. These states have little influence on decision-making processes in Brussels. The EFTA countries that are part of the European Economic Area do not bear the financial burdens associated with EU membership, although they contribute financially to the European single market. After the EU/EEA enlargement of 2004 there was a tenfold increase in the financial contribution of the EEA States, in particular Norway, to social and economic cohesion in the Internal Market (€1167 million over five years). EFTA countries do not receive any funding from EU policies and development funds.
LegislationThe non EU members of the European Economic Area (Iceland, Liechtenstein and Norway) have agreed to enact legislation similar to that passed in the EU in the areas of social policy, consumer protection, environment, company law and statistics. These are some of the areas covered by the European Community (the "first pillar" of the European Union).The non EU members of the European Economic Area have no representation in Institutions of the European Union such as the European Parliament or European Commission.
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